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Conquering your emotions

  
  Education
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When a trader experiences the emotional roller coaster associated with real time trading, he soon learns that, no matter how good his system is, he will need to conquer his emotions if he is going to be able to follow it. But, a master trader is also a master of his emotions. Again, this means that he must be willing to address any issues he has that create emotional states that cause sabotaging behaviors.
Working on conquering emotions can be done on one’s own if the trader is well balanced and does not have moderate to serious emotional issues to address. But, if not, he must find an outside resource to help him resolve his emotional issues.

5 Quotes From Market Wizard Jeff Yass

  
  Education
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“The basic concept that applies to both poker and option trading is that the primary object is not winning the most hands, but rather maximizing your gains.” – Jeff Yass

I’m not sure whether I learned this concept about trading and then applied it to poker or if it happened the other way around. Either way, this is something that has always been at the forefront of my mind with respect to both. My goal in poker is never to win the most hands, but to make sure that the pot is as large as possible when I do win.


I really liked that Yass described situations in poker where you have nothing to gain from betting and the check/raise is the best play. This is a concept that I have always had a strong grasp on. There are many situations in both trading and poker where pushing all of your chips in is not the optimal move in terms of long term survival. I need to keep that in mind.

“I learned more about option trading strategy by playing poker than I did in all my college economics courses combined.” – Jeff Yass

I often joke about all the things I didn’t learn in college. This is an interesting take on that. It makes me question whether there is some aspect of my life that I could apply to trading and improve my performance. I think that it can be broken down to the fact that I simply think different than normal people. This is why things like location independent work, the paleo diet, and trend following are so interesting to me. (more…)

Federer’s Loss is Our Gain

  
  Education
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Always something to learn when Federer is clearly beaten which can be applied to markets, especially in a market like today:
1. He was out of position, or better put, poorly positioned for all of the match.
2. Up early in the opening of the match, he failed to hold and close his early lead when he had clear opportunities.
3. He made errors in pivot points early in the second and third sets – giving away every chance to get back into the match.
4. He was a consummate professional in defeat in the post match – the opponent was better, played better, and deserved to win.
The pundits will like to call this another sign of his decline, etc. I’m not so sure. Particular in that his inability to hoist another championship trophy is now nearly fully priced in.

Quality Time Away From Markets

  
  Education

Day after day, week after week, mornings and evenings:  if you’re trading well, it’s easy to burn out.  If you’re going to leave everything you’ve got on the field by the end of the game, you’re going to need to renew that energy.  Just as important as the quality of your market time is the quality of your time away from markets.  That includes quality time with loved ones, quality time in physical activity, and quality time immersed in meaningful personal pursuits.  Quality time is time spent that gives you energy, that inspires you, that fills you with joy, a sense of meaning, energy, and love.  Without positive emotional experience energizing us, our focus is diminished.  That takes a toll on our pattern recognition and makes it easier for biases and impulses to color our decision making.  It’s not enough to relax after a market day; we need to refresh and renew.
Whether in business or in trading, great outcomes come from great processes.  The sad truth is that the majority of traders don’t succeed because they don’t do the things needed to earn success.  You can have a relaxed, balanced lifestyle or you can challenge yourself, change yourself, and pursue a performance path.  The greats don’t push themselves to succeed; they are pulled by goals larger than themselves.

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