[this is expanded from a piece I originally penned in 2016. My efforts to aggregate pieces like this to my Substack page led me to expand upon the original piece; I then felt it had enough additions to merit "re-mirroring" it again here.]
The market’s solution to every problem you have is "take all your money."
If that doesn’t scare you a little, you haven’t been trading long enough.
Most traders think they blow up because they lack a great system. In reality, they blow up because they lack psychological armor. They make one bad trade. Then they chase another. Then they spiral.
The problem isn’t your system — the problem is how you react when things don’t go your way.
But one of the biggest enemies of traders (and maybe humanity in general) is not commonly recognized as such.
Most trading books or articles focus on either analytical/predictive systems or "trading rules in general" (while often emphasizing “lack of discipline” as the primary enemy).
But I’d offer that maybe the biggest enemy of traders often goes quietly unrecognized, as it slowly undermines our efforts: Boredom.
What’s the True Cause of Boredom?
Most people assume boredom happens when there’s nothing fun to do. But contrary to popular belief (especially among teens!), boredom has nothing to do with a lack of “fun” things to do.
Boredom comes about from a lack of productive things to do.
In my opinion, boredom is simply one of several symptoms that can develop from a feeling of general emptiness. And while that emptiness can be glossed over and temporarily hidden with frenzied "fun," it cannot be truly filled by vacuous activity.
That’s why we quickly grow bored again as soon as the fun stops: it doesn’t nourish us in any lasting manner, and certainly not in the way that truly productive accomplishments do.
Conversely, after a meaningful accomplishment, we can sit and rest for a while, feeling satisfied with a job well done. We can be doing “nothing,” but we are not bored — because the emptiness has been filled (at least partially) as our self-esteem has grown, our character has been enhanced, or some necessary task has been accomplished — or all of the above.
This is why "fun" works as a reward for productivity (after we're in the fulfilled mindset that accomplishment brings), but it fails when chased endlessly for its own sake. When fun is treated as an end in itself, the emptiness may retreat into the background momentarily, but it never truly disappears.
How Boredom Leads to Overtrading
The old expression “idle hands are the devil’s playground” almost captures the essence of the problem, but not quite. Because the problem isn’t “activity or lack thereof (i.e.- idleness)” — the core problem is that sometimes we can’t stand boredom, so we engage in activity purely for its own sake.
And sometimes “destructive activity” actually feels better than no activity at all (this is also a lesson politicians could stand to learn).
Many traders understand this dynamic, at least instinctively (whether or not they’ve ever put it into words). The problem isn’t that they’re too lazy to take action — the problem is that they can become addicted to trying to accomplish something productive.
And that leads to overtrading. It leads to forcing trades. It leads to bad decisions and, sometimes, to acts of outright desperation.
Is There a Solution?
Well, the solution may be to redefine our individual views of “productive” action.
But what do I mean by that?
Let’s start here: I’ve often preached that non-action can be just as important as action. If a trader has clear rules that prohibit action in certain situations, then they can derive a sense of accomplishment from merely showing the discipline to stick to their rules.
In other words, they can (seemingly paradoxically) obtain a feeling of accomplishment by doing “nothing” — because they have redefined “doing nothing” into SOMETHING. (In this case, not accepting entries that violate their rules becomes the “something” they’re doing.)
Yet this is easier said than done, because the market is always moving. So when one resists, say, a buy entry because it violates their rules… and then that (as Robert Frost might say) “Trade Not Taken” goes on to develop into what would have been a 1000% gain, it can and probably will feel like you did the wrong thing.
And that’s why this next section is key.
The Psychological Importance of Trading Rules
Everyone talks about how you need rules to maintain discipline, and that’s true — but you also need rules to defend yourself psychologically against the one (potential) enemy who knows your every hidden weakness: Yourself.
That may, in fact, be the most important aspect of trading rules.
Why?
Because without clear rules, you have no armor — nothing to protect you from the storm of hindsight.
But with clear rules, you have an emotional fallback when that trade you never took goes on to become the greatest winner in history. You can chalk it up to luck, or blind chance, or whatever (because it probably was), and say to yourself:
“Hey, good for the people that took that trade. I didn’t take that trade because MY system didn’t give me any reason to.”
And then you can get on with your life. And your next trade.
The Psychological Minefield Without Rules
Without clear rules, you will beat yourself up endlessly for not taking that big-winner trade — because without rules, you don’t really know why you didn’t take the trade.
Without clear rules, you only have one way of assessing your performance, and that is: Your actual performance!
So every single missed opportunity will seem to confirm only one thing about you: You are underperforming.
Obviously! You’ll think. Why else didn’t [I] take that (random) winning trade, if not some personal failing?
And how can you defend yourself against this thinking if you don’t know why you didn’t take the trade, you just know it was a huge winner?
Just like in life, without clear guiding principles, your entire position is psychologically untenable over the long haul.
Without a well-defined trading system, you walk an endless edge where you are always one trade away from total destruction. Even if you never take that trade.
“One trade” may sound like hyperbole. It’s not; here’s why:
Most people can easily envision “one trade” destruction via cases of overleverage, bad risk management, etc. (where someone bets too heavily the wrong way and loses all their money).
But let me explain why one single trade can destroy you — even if you never took that trade!
The key understanding is that while the trade you never took may not impact your account directly, it impacts something more fundamental that does impact your account directly: You.
Without clear rules and knowledge of “why you didn’t take that huge winning trade,” one bad MISSED trade can put you on tilt (to borrow a poker term) — because the repercussions of one “incredible missed trade” will put you in the absolute wrong mindset to make your subsequent trades successful.
You’ll be operating under a psychological gun of regret, and in a “not gonna miss the next one!” mentality — and you’ll be tempted to jump into every long-shot, high-risk trade you can lay your hands on.
And (unless you get really lucky and hit a big winner), as the money dwindles, your mindset will rapidly spiral out of control.
If you don’t fix this problem now, the market will fix it for you (and you won’t like the market’s solution, because, again, the market’s solution to every problem you have is “take all your money”!). You might survive one mistake, even two. But unchecked, this pattern doesn’t just hurt your account — it rewires you in a way that guarantees failure.
The Solution: Define Your Rules & Honor Them
So do yourself a favor, if you haven’t already:
Before you take another trade, sit down and clearly define your rules. Make them so clear that even you can’t misinterpret them later (meaning, you can’t rationalize your way around them later). Because if you are like most people, you are damn good at playing “attorney” with yourself and advocating for a bunch of loopholes that you probably wouldn’t accept from someone else.
Then — and here’s the next key — agree to support yourself emotionally for honoring those rules. Period.
Honoring your rules is your “win” — that is your productive activity… no matter what happens to the trade (or non-trade!) afterwards. Your rules are your armor not only against boredom, but against the human tendency to view hindsight with 20/20 vision (aka: “hindsight bias”).
The Final Piece of the Puzzle
But there’s still at least one more thing to know here, because if you don’t know when to refine your rules and when to trust them, you’re walking a minefield.
Some traders adjust everything too often, reacting to every bad trade. Others never adjust anything, which makes them too rigid to evolve with the market.
So how do you know the difference?
As you go along, periodically review and adjust your rules if you see areas that need improvement. Your rules don’t have to be perfect on your first go-round — just come up with a “working draft” that you can refine later — but not on the fly while trading (because your emotions will trick you into changing everything at the worst possible time).
If you adjust your rules, do this only in hindsight upon rational analysis.
Then stick to your rules and never beat yourself up for maintaining discipline. No matter how it ends up.
Winning Isn’t About Catching Every Big Trade
This is your new definition of winning: Following your system, no matter what.
No more regretting missed trades. No more forcing bad setups. No more psychological self-sabotage.
Because in the long run, it’s not the individual trades (or missed trades) that make or break you — it’s the consistency of disciplined application of your rules that makes or breaks you.
The market will always be there.
Your job is to make sure you are too.
Trade safe.
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