Comparing Your Trading Abilities to Others Is a Terrible Idea; Why Should You Stop?
Despite the majority of traders being quite aggressive, it is not wise to judge your market interpretation in relation to that of other traders you barely know.
Comparisons are almost impossible to dodge while operating in the forex industry. After all, investors and traders often evaluate their progress based on how stable investment vehicles perform.
As a trader, you’ve undoubtedly compared how prosperous you are by comparing yourself to other rookie or seasoned traders, which are heavily present online.
Eventually, you’re bound to get envious of some of those trading guys online who always claim to have the calibre to trade against the market and cash out big.
You may have even wondered whether or not it’s worth it to keep putting in the effort in the hopes of one day being famous. Take it from me; I was among the guys.
I’ve operated in the Forex industry for a decade; as a forex trader, I have observed that it is counterproductive to evaluate one’s performance to that of other traders.
I can understand the presence of distractions and influences everything in life and this is no exception.
Humans are naturally curious about how they stack up against others; are they making more progress than me? Is their income higher than mine? What, in your opinion, do they have that I don’t?
What makes us so concerned with how we measure up to others when their actions and decisions should have no bearing on our own? How am I doing? Should be your first concern.
Human psychology compels us to draw comparisons but we would benefit from attempting to recall the bigger picture and accentuate our efforts.
Some of us strive to imitate other people’s behavior we fancy—this is not always a terrible facet, as being inspired by others may fuel one’s drive to improve one’s performance.
But you need to ask yourself the tipping point beyond which this behavior will become problematic, or does it always remain a mild obsession?
If someone’s trading prowess has inspired you, it’s natural to want to replicate their approach. However, if you try to imitate the trades of those who have years of expertise and a much more lavish bank balance than you hold, you will perform poorly or eventually fail.
Furthermore, you will not get any insight into the rationale behind the traders’ decisions. What then, if they stopped?
If you stopped learning and growing as you went along, you’d end up in the same place everyone else did, with no understanding of how to proceed.
Seeing other traders thriving financially beyond their wildest dreams may be inspiring or demotivating, depending on your character, and to certain extent envy and discouragement are inevitable repercussions.
Observing another person’s victory might make you question why you cannot attain the same level of accomplishment, eventually causing you to lose hope and give up or make hasty and perhaps destructive trading decisions.
What you need to do is prioritize knowledge and skill while trading. Sharing a trading desk with someone pro does not imply that you are on the same intellectual footing as them.
If you are coached identically and adhere to the same system, this does not guarantee that your performance will be on par with that of your peers.
The act of comparing one’s circumstances to those of others, as the proverb says, “steals pleasure.”
It’s easy to become discouraged when you compare yourself to others who seem to be “performing wonderfully,” even if you’re truly making steady progress.
It goes without saying that avoiding comparability is far simpler in theory than in practice. Just a friendly reminder to give yourself some space, gather your thoughts and assess your performance by evaluating your adherence to your trading rules and conducting risk management appropriately.
Compare how you did that day to how you performed on other days you’ve traded.
Don’t forget that you’re the one who has to work on improving their proficiency in foreign exchange.
The things that work well for others won’t necessarily work well enough for you.
As long as you are focused on developing your strategies and skills, your results will have no link to the outcomes others accomplish.