Most businesses are chasing.

They’re chasing their competitors. Chasing their industries. Chasing their perceptions of their future as well as chasing their past.

Many people within companies are chasing too. Their chasing the approval of their leadership team. Chasing the approval of their managers and of their peers. Some are even chasing recognition from their industry.

But..chasing is dangerous.   Chasing destroys focus,  burns resources and forces a never-ending chase for ‘next ‘.

Chasing and Trading

I’ve mentioned in previous posts that I’ve been working on improving my investing  / trading skills (see Are you ready to accept failure?,  How project management made me a better trader/investor and Revisiting Process – what is the ‘right’ process? for a few examples).

Over the months that I’ve been trading, I’ve learned a lot and  made some money…lost some money too.  Last night I spent some time reviewing my trading journal for the last year. During this review, I noticed  my most profitable trades have been those that have come via my trading system research and from one of my trading mentors.  More importantly, the least profitable trades and/or those that lost money outright were those that I took while chasing something or someone.

My best / most profitable trades have come from a mixture of various trend following trading systems and  methods that I’ve been learning (Check out Michael Covel’s Trend Following books and the Darvas Trading method for examples). With my trend following approaches, I’m able to spend a few minutes a day reviewing trading setups and managing them if needed. These methods have clear entry and exit rules…so it makes it very easy to determine what to trade, when to enter the trade and when to exit the trade.

Additionally, I’ve had great success following the advice of Ron Roll (aka Goat – @gtotoy on twitter) who runs DayTraderBootCamp.com. The one thing Ron always talks about is not ‘chasing’ a trade….don’t throw your money into a stock just because everyone else does. Ron takes his time and teaches everyone else to do the same…focus on those stocks that are setup for your trading style / approach and when its right, pull the trigger on the trade.   There are others out on the web and twitter that I’ve learned from over the last year but Ron has been the biggest help to me in understanding how to “Plan your trade, trade your plan”.  So..a special “thank you” to Ron for the lessons I’ve learned.

As I mentioned, my worst trades have come while chasing. I’ll see someone post something on twitter about a stock ‘moving’ or being ‘on fire’ and think ‘yes…I need to catch that!’.  The majority of the time, this approach ends up with me losing money – because i chased someone else into a trade.   In addition, the time that I spend reading tweets and trying to ‘chase’ these recommendations is time away from focusing on what my next step should be in my trading plan.

For me and my trading style and abilities, chasing kills my profitability and my focus.  Looking through my trading journal, I couldn’t find a single ‘chasing’ trade that made me money.

Chasing is Dangerous

Looking over my trading journal it was very apparent that my best trades were those that were planned out. They were  thought through with entry and exit criteria and I know exactly what i’m getting into. I managed my risk and set everything up to ensure that I gave the trade the best chance for success.

This happens in business too…we plan out projects, manage the risk within those projects and we try to give that project the best chance for success.

Or do we?   We should…but a lot of times, we don’t.

We spend our days chasing status reports.  Chasing resources and money.  We spend our days chasing projects and people. We chase strategies and tactics that are supposed to help us improve.

Stop chasing.

Stop chasing your competitors and your industry. Stop chasing your friends and colleagues. Stop chasing the latest / greatest technology, methods and best practices.

Find out what you and/or your business needs to succeed and make it happen.  Focus on your strategy, your people and your approach. Focus on what it will take to make yourself and/or your business better.

Stop chasing. Start focusing.

Image Credit: chase By rahuldeebee on flickr