Our Regret Monkey is one really worth getting to know because understanding the power it holds can have amazing effects on our trading. Every time we are faced with making a decision, we are faced with an opportunity for regret.
Think about your day today, how many decisions were you faced with? How many of them awakened your Regret Monkey? A normal response I get to this question is usually “not that many”, but I’d like to challenge you to go back to the very moment you woke up and walk through your day in fine detail with a keen eye for every decision point. Did you immediately bounce out of bed or did you hit the sleep button on your alarm? Did you put on the white shirt or the blue shirt? Did you make coffee at home or grab it on the way to where you were headed? Do you see how every day is filled with decision points?
We are faced with an ongoing stream of decisions and most of the time we make them easily and effortlessly with no conscious thought because we are comfortable with the outcome of our decisions. We manage the potential for regret by weighing it quickly, and then accepting full accountability for whatever the outcome brings. If we choose to hit the alarm, we know we may regret that decision later when we are stuck in traffic moments before we need to be at that meeting but for those few moments of extra sleep, we are willing to take that chance.
In our trading we are also faced with a multitude of decisions, and these decisions are especially powerful for awakening the Regret Monkey. These decisions have outcomes that mean we either make money or lose money, we are either right or wrong, we are good or bad. Many of us allow the outcome of these decisions to influence how we feel about ourselves and our abilities and so we may make them to avoid feeling bad instead of following what our plan says.
When we see a trade setup, the Regret Monkey shows up to remind us that if it fails we may regret taking that trade. When we are in a winning trade, the Regret Monkey can show up to remind us that if we take our profits now we might regret it if the trades goes on to run away in our favour. When we are in a losing trade, the Regret Monkey can show up to say, “just hang on a bit more because it might go back in your favour and you don’t want to regret missing that”.
Our Regret Monkey is a constant companion. The reality is that no matter what decision we face or what action we take, the Regret Monkey can find a place and can play a role. We have learned how to live with our Regret Monkey in other areas of our lives and so we have the ability to bring that to our trading. Understanding and accepting that can help us make better decisions in our trading rather than reacting to the prompting from the Regret Monkey. The next time you are faced with a decision that has the potential for future regret, bring awareness to it, take the appropriate action and accept the outcome, whatever it may be … your trading will thank you.
