Thought Plus Action Equals Success

“Action without thought is mindlessness,
and thought without action is hypocritical.” Ayn Rand

I’ve often said that I could divide my trading clients into two groups of traders: the thinkers and the doers. The thinkers love to analyze and research, but when it comes to taking advantage of all that work, they hesitate. They typically have problems putting on trades in a timely fashion, and even more difficulty staying with a winning trade. They have a tendency towards perfectionism, and we all know that trading (or life) is simply not a game of perfect.

The doers, on the other hand, have no problems pulling the trigger on trades. Often they’ll simply get into the market to see what happens. They’ll make impulsive, seat of the pants trades, jump the gun on a signal, overtrade in size and frequency, and begin trading a system with insufficient verification that it works. Sometimes they are unaware of the fundamentals underlying a position, sector, or general market.

Consistently successful traders (and people) balance thought with action, and action with thought. The balanced trader researches methods and fundamentals thoroughly, and then acts in a disciplined and timely manner.

Most traders, however, have an inclination either towards thinking or acting. Their comfort zone lies more naturally in one area or the other. They like to research endlessly, or they like to actually trade. Research without trading is a waste of time in my opinion, a mere hobby, a way to while away the time. Trading with insufficient research or verification of methods, on the other hand, is a dangerous activity.

As traders we need to set our intentions to operate thoroughly in both areas, including our area of reluctance. We need to develop the skills to succeed on both sides of the equation. We need to practice in both areas until we develop habits of effectiveness as balanced and consistently profitable traders.

Discipline is doing effectively whatever it takes to get you to your goals—whether or not you feel like it. Set your intention to pay attention to both preparation and execution, and know which you are doing when you are doing it. Thinking AND action are your partners in success. They go hand in hand in trading.