My Thai Tutor was by the other day. He is a Yoga Teacher and has been out of a job for quite a few months. He needed some money "for a friend" so I made a deal for him to tutor me in Thai. He speaks Thai fluently and being a Farang (Foreigner) like me it helps to have someone that speaks fluent English.
Just last week the topic of him needing work came up and I had asked why he didn't open a studio. I suppose my previous life as a business coach got the better of me and I started running some numbers on what it would take for him to open a place and started quizzing him on what is required and gave him some suggestions on what is needed to run a business.
Wouldn't you know it he is now looking to raise money to pursue his dream. As we got talking his sales instinct kicked in, and he started to try and sell me on investing with him. I made it quite clear that what he needed was a business partner and the risk of investing was too great for me. The funny thing is he doesn't see it that way (of course). He only sees the upside. Why wouldn't he. He is looking for me to finance the studio 100% and put money in his pocket so he can afford to pay rent and put food on the table for him and his wife. All the while adamant that he carries the risk. I told him to give his head a shake but I suppose his stubbornness just doesn't see the forest for all the trees are blocking his view.
A couple days ago he came by again trying to sell me. At this point I had already given him more business advice than he was able to retain. So we touched on the partnership agreement again and I made it quite clear that there was no chance of me financing 100% of the venture to get only 49% ownership. In other words he would have complete control of my money and the company. His reasoning was that if he wasn't the majority shareholder he would be still an employee. Which of course isn't the case. The conversation shifted somehow to the potential of the company and reeling him back into reality I said look, "A chick in hand is better than two in the bush". A phrase that implies that a guaranteed profit is better than two potential leads. At this stage I'm not sure if he was just stubborn, or wanted to prove out of the box thinking, or simply didn't get it but he wanted to argue that the possibility of catching 2 chickens is better than having one in the hand.
In any event he clearly still has the mind set of an employee. Employees want no risk and just the rewards, they want a steady paycheck, a 9 to 5 gig, and the ability to just shut off when they feel like it. If you have owned a business you know that as a business owner you work harder than all your employees, carry all the risk, and you are not guaranteed a pay check. You also know that a chick in hand is better than two in the bush. Better an egg today than a hen tomorrow.
As a day trader you have to know your risk, your reward, and not let go of good trades because you are chasing more trades. As a trader you don't have a steady paycheck. Just like a business owner you have to be careful not to chase rainbows. You need to be very well grounded and take baby steps in your trading. Risk. Reward. How many pips are you willing to risk to make your take profit? When you've made a good trade and you're in the plus, don't get tempted to look for more trades. You have a chick in hand. Hang on to it and don't trade it for two in the bush.
You have probably been there where you are just itching to make a trade. Waiting for conditions to be just right. Maybe you missed a good trade and now you are kicking yourself and dying to make up for it. Or your ego is getting the better of you as you're reviewing your account history and you say to yourself a couple more trades and I'm done for the day. When you should be focusing on the one and only thing that matters. The chick in hand. Don't chase dreams.
Ground yourself and be realistic. You should have a trading plan and some rules about when you will and will not trade. When you will and will not cash out. You need to look yourself in the mirror and tell yourself that you cannot trade every day. You might have to wait a week or two to make a trade. So be it.
