How Aiming For Perfection In Trading Destroys Your Performance

Perfectionism can weaken your trading edge and damage your confidence. It makes you overthink; become overly anxious and hesitant.

Let’s closely look at how this mindset plays out, and slowly impedes your success:

Why do traders fall into this psychological trap?

The root of this problem usually stems from a positive desire to attain trading excellence that quietly metamorphoses into unrealistic expectations. What begins as a healthy drive for improvement is seen eventually turning into an obsession with flawless execution and results.

Traders in this situation fail to embrace the idea that trading is a game of probability, and not certainties. That no matter how skilled you are, the market will always be unpredictable.

How perfectionism manifests in your trading activities

Endless adjustment of trading strategy

A perfectionist tends to view one or two trading losses as evidence that their strategy is broken. He doesn’t believe that occasional losses are a natural part of the trading process.

Consequently, he obsessively changes indicators, adjusts his targets, rules, switches timeframes, etc. He constantly hops and tweaks for “something better”.

This prevents him from collecting enough data to verify if his methodology actually works over the long run.

Information overload

This mindset tricks you into believing that more information equals better decisions. It makes you consume too many trading opinions. Read too much news, follow too many analysts and influencers online.

You tend to seek for some “external/social confirmation” before you take action. But instead of it helping, it completely paralyses you. You get stuck, and fall into analysis paralysis.

Obsession with flawless trading (fueled by social media)

Do you find yourself constantly comparing your trades to the polished wins shared by some self-proclaimed trading “gurus” on the internet?

Social media can give you a false impression of the market. It creates a fake reality and sets an impossible bar for you. To be like them, you begin to chase the “illusions” and ignore your “practical” guidelines and plans. The result is often failure, intense frustration and self-doubt.

The negative impacts of the perfectionist approach in trading

Hesitation to enter trades

You want absolute guarantee first before you take action. You want everything to align perfectly the way you anticipated; the candles must look perfect, the trend must be crystal clear, the indicators must match 100%. And by the time you’re ready, the opportunity is gone.

Overcomplicating simple decisions

Secondly, every decision becomes a battle in your mind. You tend to second-guess ideas more than you should. You negatively question your already backtested plan. You become mentally stressed as a result of micromanaging (micro-examining) every detail.

You take losses very personally

To you, a loss is a reflection of incompetence, not a statistical outcome of a probability-based technique. You believe every loss is proof your skill is failing.

Loss of confidence in your trading technique

Since you frequently tweak and modify, it becomes very difficult to build real trust in your system. You under-trade, trade out of fear or anger. You are always starting over. This lack of consistency cripples your growth.

Solutions for the perfectionist trap

Note that trading does not reward perfection.
It rewards consistency. Do this:

• Understand that you cannot control every market output. So, determine & separate the things you can control and the ones you cannot.
• Plan every trade and trade your plan.
• Expect to lose even before you enter a trade. It is part of the process.
• Define your success or failure by your overall consistency.