Why You Suck at Trading – Opportunity Cost

When you first start trading & open your new trading platform it should remind of a bit like vegas.  It’s designed like that on purpose.  Not only are there color lights flashing but a plethora of indicators, time frames, and types of bars to try to use.  There are thousands of combinations.

For example, Tradestation has well over 100 indicators but let’s say they only have 100. You would have 161,700 combinations to choose from if you only wanted to pick 3 at at time. That’s a lot of choices!.

In the TED talk below choices create an ideal opportunity cost.  If I had used a MACD instead of a stochastic indicator this trade could have worked!… DARN!  This most likely isn’t true but we can’t help our ancient brains.

All the potential combinations of indicators, time frames, and chart styles create endless choices which create more opportunity cost, implying that you could have done better.

My question to you: Are you changing your strategy because the market is demanding adaptation from you? OR are you changing your strategy haphazardly based on the potential opportunity you perceive you could had?

 

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