Perfectionism and Avoidance

Perfectionists are often motivated by avoidance: the need to avoid unpleasant emotional experiences. Traders who seek the perfect system are also likely to be motivated by the need to avoid unpleasant experiences.

Imagine taking part in a game where participants are divided into two groups, blindfolded and asked to stick out their right hand.

[I]The first group is given ten dollars each time they extend their hand. They soon learn how to play the game and, no doubt, enjoy playing at every opportunity.

The second group is also given ten dollars, randomly, about 80% of the time. The remaining 20% of the time, instead of being given a dollar, their hand is jabbed with a pin. Most participants in this group are likely to quit fairly quickly – they focus on the pain and ignore the reward.[/I]

With trading losses, the only pain that you will suffer is the emotional reaction to a loss – often far worse than being jabbed with a pin. If you concentrate on avoiding losses rather than on maximizing your overall gain, you are unlikely to succeed at trading.


because it’s true :slight_smile: