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Trade Execution

The difficulty of trade execution is much underestimated in the profession of trading.

The skill set is only the press of a button, but when to press that button is quite a difficult feat.

Even when the conviction is resolved to push the button, when to push it is a topic hard to determine.


First, while a general decision has been made to enter the markets, new data is consistently being impressed upon the trader, nourishing doubt and reconsideration.

Secondly, timing an entry to the desired perfect moment is near impossible and can hinder execution if perfection is expected.

Thirdly, any debate in the trader's mind is compressed toward the moment of truth of actually pressing the button. The resulting stress causes the mind to resort to intuition which in a counterintuitive environment always results in the worst choice for execution.

While a magnitude of reasons can cause faulty execution, the resolve can be summed up to a reasonably straightforward approach:

More rules.

What this means is that anything that provides clarity ahead of time for well-defined criteria for entry or exit helps reduce overwhelming data stress once the point of execution nears.

One of the most successful ways of reducing stress is trading so small in position size that a losing trade is emotionally meaningless to the trader.

Another good way to familiarize oneself with execution properly is by conditioning oneself to trade in sample sizes. This approach reduces stress on a single trade since the acceptance that a single trade is meaningless and random in its outcome minimizes the actual value of a single execution. Very helpful for traders who aim at perfection to realize that perfection, in principle, equals paralysis.

In general, if struggling with execution, like not accepting the risk, procrastination, or an inhibited way of flow state present, it is resolved by asking a quality question about the why of the cause and finding answers and resulting rules for resolve.


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