It's not about what we have or don't have that drives our trading decisions—it's what we're afraid of losing.

This fear of loss has often led me down the false path of perfectionism. Yet true mastery and profitability in trading, like in art, comes from embracing the craft's imperfections. ✉️

At the recent Mumbai traders' meetup, Chirag spoke a line that has resonated with me all week—

वो आदमी सफल होने से कोई रोक नहीं सकता जो अपनी कश्ती जला कर आया हो!

It made me reflect on my trading journey and how my risk-taking appetite has evolved over the years. I'm inherently risk-conservative as an individual, though my career decisions and trajectory paint a completely opposite picture. I've never gone bust or even had a significant drawdown in my trading life—initially because I was too cautious, and now because my skills have improved.

When I look back at my interactions with other traders and analyse my own performance graph, I am  noticing a pattern: traders who started recklessly or faced major drawdowns—but persistently improved their execution—often developed better and faster learning curves than those who began cautiously with small positions.

Even Quallamaggie (Q) and Zanger (Z) demonstrated similar patterns—their initial failures didn't reduce their risk appetite or aggression. Rather, they increased their risk appetite as their accounts grew larger. When ordinary traders dismiss Q and Z as exceptions in the trading world, they're likely rationalizing their own fears—fear of bouncing back from setbacks beyond their risk comfort zone, and fear of not having enough skin in the game.

After all, as Taleb says, courage is the only virtue you cannot fake.

I wonder if I would have been a better trader today had I started more aggressively—even borderline recklessly—and then learned to control that aggression, rather than the other way around. Has my obsession with perfection (or trying to get close to it) actually slowed down my learning curve as a trader?

Perfectionism and Self-Abuse

In every trade—even with flawless setups and meticulously calculated risks—there are countless ways to feel wrong, whether you make money or not:

You buy and it goes down

You don't buy and it goes up

You buy, it falls, you sell—then it goes up

It goes up, you sell, and it keeps going up

It goes up, you buy, it goes up further—then drops

You buy with half size and it moves up; you pyramid with full size and it goes down

You buy with double size and it drops; you buy with half size and it doesn't go up as much

. . . and the list can go on

But there is only one way you'll feel right:

When you buy and it immediately goes up, and when you sell and it immediately goes down.

And this is a very very rare instance.

But the pursuit of perfect trade—trying to capture both the first and last eighth of every trade—is where much self-belief and confidence is needlessly lost. The search for the perfect chart, perfect market conditions, and perfect mindset was probably the most paralyzing form of self-abuse in trading I had done. It led me to the comfort of inaction rather than risk the ego to scrape the imperfect rewards on offer.

Lets take up an example that was discussed in the last Mumbai meetup -

PDMJE Paper - Trade Objective

An Episodic Pivot setup, gapping out of a big base, to be held as a longer positional play.

Entry  (Orange lines)

29th October 2024 Entry 113.95, Stop Loss 2% - 111.7 (~Day low)

Risk on Trade

0.75% of portfolio, Size - 35%

Sells (Blue Lines)

50% Sell at 6R - 128.6 - This was not a planned sell, but I observed weak market depth with sporadic volumes over the next 3-4 days. As a precaution, I reduced size in this illiquid counter. = 3R

50% sell at ~12R - 143 - The swing move had become overextended, moving far from the 10/21 EMA. The position was sold when price broke below the opening range lows in weakness. = 6R

Impact of portfolio - 6.75%

Analyzing this trade

up to this point, I executed it well with little room for improvement—almost perfect.  This was also a very obvious EP trade, and many others had executed it similarly.

In the group discussion of this trade, even though everyone had profited, regret about the price movements after exit overshadowed the satisfaction from actual gains.

If you had missed the pullback entries near the 21 EMA on November 13th (which wasn't actually setup-ready) or the breakout entry that triggered on November 29th (when markets were strong and many stocks were breaking out), you would have likely missed the 80% move that happened in less than a month, which I did. The traders in the group spent much of their emotional energy obsessing over this missed opportunity, ultimately accumulating emotional debt from the markets.

The paradox of trading is that while realized losses may dent our account, missing potential gains often dent our confidence. Each time we let the fear of missed opportunities overshadow our actual successes, we unconsciously train ourselves to trade smaller, not bigger - precisely when our proven profitability should be empowering us to scale up.

It took me years to understand that successful trading doesn't require feeling happy. I can make sound decisions and evaluate my performance objectively, even when I feel frustrated about missed opportunities. The only true nobility in this business is making money, not chasing dopamine highs.

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