Complacency & Exhaustion in trading

Complacency

When I think of complacency two major things come to mind:
Often a traders biggest loss comes after a string of winners.  This is well documented and suggests to me that complacency is present.  The ‘every swing I take is a home run feeling’ or the ‘I can do no wrong feeling’.  Sure enough when in this state the market is all too willing to smash you back down hard as a reminder of your mortality.
The other thing I think of are traders who have taken their foot off the gas.  Who have decided that their approach is the only thing that works and will never need changing.  You have to stay on your toes.  The chances of the same approach working over and over ad infinite are slim.  It may not need a complete overhaul and rather only subtle changes but it is complacent to believe something is a sure thing.

 Exhaustion

Most traders are imminently aware of their

Continue Reading