In the world of trading, we often face what I call 'unlimited choices' - decisions imposed on us in moments of confusion, where we feel the need to take action, usually driven by an emotional response to the market.
We have all been through this experience: after making a hasty decision, we find ourselves wondering, 'What was I thinking?' or 'Why did I do that?' In those moments, we may have made a decision that lacks logic.
Sometimes, in the real world, life forces us to make unlimited choices - in those situations, we can reasonably blame external factors beyond our control for the decisions we were forced to make. In trading, however, the responsibility rests almost solely on us. When we lack a clear goal behind our trading, or our operations are poorly founded, or we fail to focus on our goal and process, we expose ourselves to 'unlimited choices,' increasingly relying on luck instead of strategy.
Having a clear trading process with defined rules is crucial. When we have a solid framework, we significantly reduce the likelihood of making random decisions. The more we stray from this process, or lack clarity about our goal, the more prone we become to reactive trading instead of proactive or responsible trading.
Successful trading is about making conscious and informed choices, or when we are forced to interact with unexpected circumstances, having an appropriate course of action available to guide us on what to do in a given situation.