Happiness and Quality of Life

1) Inner Abundance – This relates to self-care and maximizing one’s energy and internal resources;
2) Quality Time – Time spent by oneself, for oneself;
3) Finding Meaning – Having goals that give purpose and significance to life.
The key idea here is that happiness is not just something that happens to people. It is the result of one’s relationship to oneself. 
I encounter many traders who lack a sense of abundance–they are forever fearing that they will miss market moves and opportunity. I find many traders that lack quality time: they are slaves to the screen and experience more frustration than joy in their efforts. I also see many traders who derive little sense of meaning and purpose in their work. If they’re not making money, they are not happy. Continue reading »

3 Questions For Traders

1)  What, specifically, are the talents, skills, and strengths that will fuel your success? – A very successful business needs a distinctive competitive advantage.  What is yours?  What do you have that others don’t that will make you succeed where others fail?  What are you superlatively good at, and how is that concretely and consistently expressed in your trading?  In your life?
2)  Where in your life, specifically and consistently, are you making super efforts?  – We don’t grow by staying in our comfort zones.  Growth, whether in the gym or in life, requires a conscious, directed push outside our comfort zones so that we exercise fresh competencies.  What are the super efforts we’re making here and now to be more tomorrow than we are today?
3)  Who brings out the best in you? – It is human nature to adapt to our environment.  If we’re in an enriched social environment, we rise to the occasion; we absorb positive role modeling.  A challenging and stimulating work environment inspires us to rise to ever higher levels.
If we want a successful life, a meaningful life, a happy life, our days must be populated with experiences that yield success, meaning, and joy.  We can live comfortably and we can live well.  Or we can make super efforts and live to our fullest.  Each day, the choices we make shape our future and who we will be.

1+11 Reasons Why Traders Fail

  1. They have inadequate capitalization.
  2. They are using someone else’s system.
  3. They lack knowledge of the system’s performance.
  4. They are unable to sit through flat periods or drawdowns.
  5. They are unable to handle stress.
  6. They lack commitment.
  7. They experience drawdowns that are greater than their hypothetical testing.
  8. They override the system’s signals.
  9. Their ego prevails.
  10. Their system is overoptimized; they make additional rules to take out losing trades.
  11. They lack parameters for spike performance in markets.
  12. They lack diversification between systems and/or markets.

5 Qualities-Successful Traders are having

1) Capacity for Prudent Risk-Taking – Successful young traders are neither impulsive nor risk-averse. They are not afraid to go after markets aggressively when they perceive opportunity;
2) Capacity for Rule Governance – Successful young traders have the self-control needed to follow rules in the heat of battle, including rules of position sizing and risk management;
3) Capacity for Sustained Effort – Successful young traders can be identified by the productive time they spend on trading–research, preparation, work on themselves–outside of market hours;
4) Capacity for Emotional Resilience – All young traders will lose money early in their development and experience multiple frustrations. The successful ones will not be quick to lose self-confidence and motivation in the face of loss and frustration;
5) Capacity for Sound Reasoning – Successful young traders exhibit an ability to make sense of markets by synthesizing data and generating market and trading views. They display patience in collecting information and do not jump to conclusions based on superficial reasoning or limited data.

TRADING COMMANDMENTS

Have you written down your trading rules? Do you have rules for entry and for exit with a profit and with a loss? Do you have a rule telling you whether a market is trending and what the trend is? Do you have rules stating when the market is in a trading range and what that range is? Do you have rules saying what markets you will trade and what has to happen to trade them?

Or do you simply shoot from the hip and call it artistry or intuition? Does this work for you?

Do you follow your rules rigidly without flexibility or discretion? Does this serve you over time?

Do you abandon your rules in the heat of trading, only to regret it? Do you stubbornly go against your rules thinking this time you know better? What would happen if you didn’t do this?

Some people don’t like rules. They don’t want to be told what to do even if it’s themselves telling themselves what to do. They even more don’t like following rules that came with a system for which they paid good (any or excessive) money. They have a polarity response to direction even after it becomes apparent that they’d be more profitable simply following the rules.

Others like to be told what to do, but somehow their rules are conflicting, obscure, or so bound up with discretion as to be meaningless. These traders may not even be aware that in essence they have no rules.

Whatever your situation turns out to be, it may be helpful to think in terms of commandments or suggestions. You may think in terms of absolute rules or simple guidelines.

Do you like clear directions as to what to do? In this case you can think in terms of commandments. For example, when The Ten Commandments says, “Thou shalt not kill,” it doesn’t leave much discretion. Reword your rules as commandments that are precise and clear and easy to follow.

Do you resist being dictated to and bossed around by outside forces? In this case, reformulate your rules as guidelines or suggestions. Give yourself some leeway in certain situations. Reword it so that when you read it, it sounds like a good idea and not a demand.

However, be certain in advance that whether you choose a suggestion or command, the results will be profitable if followed consistently or even most of the time. There’s nothing worse than a bad idea or a rule that doesn’t work. Remember the basics: Find out what works. Verify that it works. And do it.