Judgments Cause Disturbance
"It isn't events themselves that disturb people, but only their judgments about them."
— Epictetus, Enchiridion
Today's meditation really should resonate with us all from a trading point of view, 100%!
We use a "perceiving eye" to look at the stats/data that we have available to us. This means we perceive what is likely to happen during a trade based on the stats/data and that the trade meets the rules/criteria for our strategy too of course.
Once the trade goes in play, we use our "observing eye" which sees what is actually happening; so basically we are now trading what we are observing and not what we were perceiving pre event.
If we allow ourselves to fall into the trap of watching with a perceiving eye once the trade goes in play, we are now expecting the trade to go our way and we are not alert enough to manage the trade should it start to go against us, meaning our loss can become unmanageable far too easily and we will be in the land of hope; hoping the trade will turn back in our favour! This then leads to anger; "why did I do that?" "why didn't I stick to my rules?" "how could I have been so stupid?" The desire to turn back the clock and to do it again correctly, burns inside!
By ensuring we switch to using an observing eye when the trade goes in play, we are now trading what we are seeing and we are ready to cut the trade short in a heartbeat if it is starting to go against us; therefore the loss is controlled and our bank is protected.
Because the stats/data that we use means that we are likely to have many more successful trades than ones that occasionally go against us, this puts us in a profitable position over time. But ONLY if we manage those occasional trades that are going against us by controlling our losses!
So always use your observing eye once a trade is in play because "judgments cause disturbance."