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“Option Paralysis” a.k.a. Decision Fatigue

High-performing historical figures like Albert Einstein and Steve Jobs overcame a phenomenon called “Option Paralysis.” In our everyday lives, we are flooded with information and need to make countless decisions. Having more options means having to make more decisions. This increases our tendency to freezewith uncertainty and get nowhere. Once we realize that many daily decisions are of little consequence to furthering overall goals, we can let go of the frivolous. This explains why Einstein and Jobs wore the same outfit every day. They simplified routine tasks to the point of near-automation. We are more effective and efficient when we save analysis for only the most meaningful decisions.

Trader Genius coaches commonly refer to the “option paralysis” principle as decision fatigue. Assessing too many charts, numbers, and indicators to assess at once tires us out – opening the door for emotional hijacking. The key to a consistent, replicable trading strategy is simplicity. Too many rules or criteria to simultaneously focus on will invoke decision fatigue, yielding undesirable results.

However, a trading strategy must not be discarded solely because it is too complex. Only if it cannot be simplified to the point that decision fatigue is a non-factor should it be abandoned. As members of Trader Genius, we have the benefit of testing and refining our trading rules in the zero-risk Replay simulator.Not every trader is so lucky, as the software they employ is insufficient for the task. We can establish trading systems around short price action bursts, longer trends, indices, stocks, or even overnight gaps. The possibilities are only limited by our creativity and discipline to keep it simple!

So get organized and actively seize the opportunity in front of you. Don’t summon option paralysis by overthinking it, just grin and do it! Write down your tentative rules, test them in hundreds of random market conditions, refine, and simplify! The results will be worth the effort you put in if you persist objectively, but taking the necessary steps is your responsibility. by Coach Rob

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