I talk about “control” a lot in these letters – our want for it, and the harsh reality of the situations we face as traders.
To succeed long-term, I need to be ready for anything and accept whatever happens.
This is good advice for almost anything (but not everything) in life. And it is absolutely great advice for all my trading!
With proper planning, strategizing, execution, and risk management, I can put myself in a position to win, get lucky, or not lose too badly. These are the things I can control.
I cannot control what the markets actually do. Therefore, assuming I took care of everything above, I need to be accepting of whatever comes.
Accept it. It is what it is. My wanting it to be something else won’t change it – whatever it is.
Once I start personalizing everything, making it a referendum on my amazing intellect or my incredible stupidity, then I’ve lost all objectivity and any hope of rational decision-making goes out the window. When that is lost, it’s only a matter of time before the loss of capital follows.
If I put enough effort into controlling what I can control and putting myself in positions to get lucky once in a while (creating my own luck!), then I live a much happier trading existence.
That’s when trading is fun. And when trading is fun, I’m doing it right.