Don't get hung up on what could've been or what should've been.
How many times do you find yourself looking back on a trade, whether it be on a stock or an index or even a theme, and think about how you missed it?
Just this morning, I was looking at Chesapeake Energy (CHK) and thinking how easy it would have been to short that one Wednesday. Truth be told, it wasn't easy. The news seemed obvious, but I'm not sure I could have gotten and held a borrow if I had wanted it.
Or Facebook (FB) . That had to be an obvious winner, right? Everyone stuck at home with nothing to do but browse social media all day. I mean, when they aren't wrangling their kids or trying to work from home.
The most obvious one of all: buying the huge March dip. That was easy money. Am I right? I remember talking to people on those days and there was nothing easy about buying. There was nothing easy for those that actually did buy a little early then watch their holding immediately drop 5% to 50% in a few days, sometimes hours, just to hit a double-digit loss.
Hindsight is easy. That's all. Sure, we can learn from what transpired, but don't get lost thinking about what should've been or that you missed the greatest opportunity of your lifetime.
Successful trading is rarely built on nailing that once-in-a-lifetime opportunity. It's built on knowing there will be consistent small opportunities almost on a daily basis and repeatedly hitting those opportunities.
We love to hear the stories about the trader who turned a nickel ($5) option into a fortune. From $5 to $500 per contract or catching a stock at $2 and riding it to $15 overnight on some big piece of news. But that's not how most great traders succeed. It's the folks in the shadows nailing small and medium-sized winners on a consistent basis while limiting their losses.
Unfortunately, for every one of those $5 contracts that became $500, there are 99 others that expired worthless. Heck, it's probably more than 99, but the point is those dream trades come with a lot of nightmare returns or sleepless nights. High risk, high reward isn't the way to make it long-term, and opportunities, I promise you, they will be there on a daily basis. Maybe you won't see every single one, every day, but you don't have to see them all.
Find a rhythm that works for you. Focus on learning from missed opportunities rather than dwelling on them. If you get stuck looking in the rearview mirror, you might miss the bull or bear opportunity standing in the road in front of you.
Tim Collins provides options trade ideas each day on Real Money Pro, our sister site for active traders. Click here to learn more and get great columns, commentary and trade ideas from Tim Collins, Mark Sebastian, Paul Price, Doug Kass, and others.