We can learn many things from salespeople. I am not talking here about the typical stereotype of a used car salesman.
Today, I will share with you two lessons that you can learn from a successful salesperson.
Lesson 1: Don’t Take Rejections Personally!
A successful salesperson understands that when he or she goes out to offer a product to clients, not all of them will say yes. Most of the time, the response is no.
Imagine someone says no to a salesperson’s offer and that she then decides to change the business or close down the entire company. It sounds ridiculous, doesn’t it?
Instead, she has to go out again and approach more clients, make new offers, and look for new opportunities. In fact, some statistics show that 20% to 30% is a good closing ratio, which is the number of deals you close versus the number of offers you’ve made.
This means that if the salesperson makes an offer to 10 people and only two or three of them say yes — which means around seven to eight people said no — she is doing a good job!
Of course, sometimes, you have to go back to review your sales process. You have to make sure the product is good and that you are targeting the right audience, but you never take a rejection personally.
The same concept applies to trading: Never take the losses personally.
Your trades are just your ideas (products). When you go to the market and submit the offer (trades), sometimes you will be on the right side of the market (yes; winning trade), and other times you will be on the wrong side (no; losing trade), and you have to get out and find other opportunities.
It’s crucial to make sure that your trading plan is suitable for market conditions.
Lesson 2: Understand Your Numbers!
Any successful salesperson always keeps basic data, such as how many offers have been submitted and how many clients accepted/rejected the offer.
By understanding this and having a good database, he or she will be able to manage his or her emotions when falling into a sales slump (period with no sales).
That’s the law of normal distribution. Sometimes you will have bad days, sometimes you will have perfect days, but most of the time you will be somewhere in between.
So in trading, you need to make sure that you are familiar with some basic math and formulas—for example, your winning rate, drawdowns, etc. Most importantly, you must know how to deal with consecutive losses and consecutive winning trades.
For example, when you have a losing streak, you should start reducing your exposure until the low of mean reversion kicks in and the situation changes.
Most trading platforms offer this data without you doing the math. However, you need to be aware of those numbers and act accordingly. I highly recommend that you do it yourself so that you can familiarize yourself with the process although it’s not necessary.
By doing this, you will be able to handle your emotions appropriately and understand that it’s a normal thing, and you can achieve consistency.
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