When To Stick And When To Quit
"Think of those who, not by fault of inconsistency but by lack of effort, are too unstable to live as they wish, but only live as they have begun."
— Seneca, On Tranquility of Mind
Today's meditation is another good one, when we compare it to trading.
You can base the three types of people you see in line at the supermarket on traders.
Person one gets in one short line and sticks to it no matter how slow it is, or how faster the others seem to be going.
Person one the trader, will stick to the same strategy regardless of their results. Just because you have begun with one strategy, doesn't mean that you are committed to it forever, if it isn't working!
Person two changes lines repeatedly, based on whatever he thinks might save a few seconds.
Person two the trader, will repeatedly change strategies every time they see something new and of course they will never give a strategy enough time to test it properly, to see if it's worth sticking to it!
Person three switches lines only once; when it's clear that their line is delayed and there is a clear alternative.
Person three the trader, will stick to a strategy long enough to determine if it is working or not. If it isn't working, they will decide to do things differently and to make a change.
Being aware that a strategy is not working for whatever reason, can be just as important as being disciplined to stick to a strategy. The difference being that if a strategy is working, you stick to it 100%. No point trying to fix what isn't broken!
In summary, trader three gives you the flexibility to change a strategy, but only if that strategy is failing you long term and not out of temptation that something else looks better! You still have to be disciplined to stick to what is working long term and not change strategies just for the sake of it.