1) Do the problems that affect your trading also impact other areas of your life? – Let’s say that you find yourself overtrading and taking too much risk relative to your planned exposure. You realize that these lapses of discipline are costing you money and creating significant frustration. The key question to ask is whether these lapses also occur in other spheres of life: in managing personal finances, in failing to follow through on personal responsibilities, or in impulsive decision-making regarding career, relationships, and the future. If so, then you know that this is a general problem that is spilling over into trading. Working with a psychologist or other licensed therapist or counselor could be the best way to go, as this is not uniquely a trading problem. Alternatively, if the problem truly is unique to trading, then it is probably triggered by situational factors related to how you are trading. Relying on a trading coach to review your trading practices and address these factors can be promising.
2) Do the problems primarily result from poor trading, or are the problems a primary cause of poor trading? – This can be tricky to sort out, because the direction of causality often goes both ways. Many times, poor trading practices–such as trading excessive risk–lead to emotional fallout, such as frustration, anxiety, or even depression. Working on changing emotions might be helpful, but the root cause–the faulty money management–needs to be addressed. Conversely, there are times when emotional problems, such as performance anxiety, get in the way of trading plans and trading results. It is very helpful to examine trading problems in a step-by-step fashion, to see where emotions are affecting trading and to see where trading is creating emotional pressures. (more…)
Archives of “interference” tag
rssSimple Formula For Performance.
Potential is what everyone has inside them, it is the education, learning, development, support and time put in that enables one to continually develop their capabilities. This can increase, at least until either physical or mental limitations constrain further growth.
Interference is what detracts from potential to reduce performance. This can be down to any number of reasons, perhaps environmental or external factors, physical or mental hurdles or limitations, poor execution of process, inadequate self-management. Many of these can be deatlt with in some way; however, the greatest threat in most cases is from attitude and mindset. Perhaps it could be something as simple as seeing yourself failing and recalling the look of an angry parent, a doubting physical education teacher or a school bully from your younger years who always told you that you did not have what it takes. – This creates that painful memory which instils that moment of hesitation or self-doubt just when you least need it. – Who hasn’t at some time during their trading had that pang of self-doubt, or lacked the self-belief or confidence just at a crucial moment, and then looked back with regret and heartache, in some cases leading to a whole cycle of self-doubt and poor decisions, execution and position sizing.
cfor Traders
1) Cut Risk – It’s that “above all else, do no harm” principle. If you don’t have a feel for the market, trade small while you regain your feel. Preserve as much of your capital as possible to lay the foundation for your recovery;
2) Focus on Your Strengths – It’s not unusual for frustrated traders to try to make all kinds of changes in their trading in a frantic effort to gain some traction. These efforts can compound difficulties by getting traders further and further from their strengths. During rebuilding periods, you want to focus on the markets and strategies that you know most about, that represent your strengths.
3) Reach Out – It’s especially helpful to reach out to traders who trade markets and strategies similar to yours. Are they also struggling? If so, this suggests that market changes, indeed, may be at the root of the problem. If the traders you contact are succeeding, try to find out what they’re doing differently from you. It may well be that a simple tweaking of execution, holding times, and risk management could turn your performance around.
4) Stay Constructive – You may well be in a rebuilding period. This happens to the best athletes and sports franchises. It doesn’t mean you’ve lost all talent and skill. Identifying the kinds of trades that are working for you is a start toward rebuilding: you want to find the common denominators behind your successful trades so that you can emphasize these going forward.
5) Work on Your Self-Talk – Hard as it is, it’s important to stay positive during a rebuilding period. The last thing you want to do is create additional interference by beating up on yourself and dampening your motivation. This is one of the areas where coaching can be helpful. Setting attainable goals and creating plans for learning new patterns and trading strategies can fuel optimism, determination, and focus.
6) Control the Budget – It very much helps to have a cash cushion to weather these rainy day periods. Living within one’s means also helps greatly. I’ve generally found that traders can adapt to shifting markets if they have enough time to make the transition. It’s when the pressures of bringing in money month to month add to the performance pressures of a drawdown period that turnarounds become difficult to sustain.
Perhaps the best advice, however, is preventive. Identify slumps early and control losses before they get out of hand. Perform regular inventories of your winning and losing trades, so that you’re always on top of what’s working for you and minimizing what’s hurting performance. During your best times, remember that markets always change and keep powder dry to weather the inevitable lean times. Ironically, the best way to master declines in trading performance is to embrace them early and turn them into prods for learning and development.
Trading Success, Fear, and Endurance
“What makes a great endurance athlete is the ability to absorb potential embarrassment, and to suffer without complaint. I was discovering that if it was a matter of gritting my teeth, not caring how it looked, and outlasting everyone else, I won. It didn’t seem to matter what the sport was–in a straight-ahead, long-distance race, I could beat anybody.
If it was a suffer-fest, I was good at it.”
Lance Armstrong
It’s Not About the Bike
p. 23
It’s Not About the Bike
p. 23
“You can lash out at people, you can get mad at yourself–you can even end up hating yourself without ever realizing that fear is the interference, the block in the road of progress. Fear only causes me to react. Fear only causes me to wait. Fear moves me away from effective action. When you find yourself acting like a jerk, stop for a second and just ask yourself, What am I afraid of here?”
Richard Machowicz
Unleash the Warrior Within
p. 61
Unleash the Warrior Within
p. 61
What do you fear most as a trader?
Embarrassment of loss?
Being wrong?
Losing a dream?
How does your fear manifest itself?
What negative trading behaviors do you engage in to mask your fears? Getting mad? Walking away?
There’s much to be said for trading as an endurance sport. One of the things successful traders learn to endure–and overcome–is fear. And that starts with a simple question: What am I afraid of here?
Trading Advice
1) Cut Risk – It’s that “above all else, do no harm” principle. If you don’t have a feel for the market, trade small while you regain your feel. Preserve as much of your capital as possible to lay the foundation for your recovery;
2) Focus on Your Strengths – It’s not unusual for frustrated traders to try to make all kinds of changes in their trading in a frantic effort to gain some traction. These efforts can compound difficulties by getting traders further and further from their strengths. During rebuilding periods, you want to focus on the markets and strategies that you know most about, that represent your strengths.
3) Reach Out – It’s especially helpful to reach out to traders who trade markets and strategies similar to yours. Are they also struggling? If so, this suggests that market changes, indeed, may be at the root of the problem. If the traders you contact are succeeding, try to find out what they’re doing differently from you. It may well be that a simple tweaking of execution, holding times, and risk management could turn your performance around. (more…)
Will Rao and FM take a long march into future?
Will Rao join the FM in the walk-back hand-in-hand with each other?
Subbarao, the former RBI governor fired some salvos as a parting gift to the current FM last Thursday. That it took him 5 years to take a broadside at the FM on the last working day of his career, shows how little spine the Central Banker had been left with.
More importantly, it brings to the open certain disturbing signs that were spoken off in hushed tones but are now visible in the open. The lobby of students who have read Economics at school and who now run what else-but the national media and newspapers lapped up Rao’s speech.
But who’s responsibility was Rao alluding to when he raved and ranted over the North Block interference and pressures. The fact that he highlighted that RBI was manned by the over 50s tribe, which had no knowledge of financial markets and he himself came from the IAS with a bare-bone graduate degree and past designation as Finance Secretary shows how poorly the educated in this country are treated. There is a segment of jobless PhDs who seek pastures overseas and there is the graduate lobby that has to it’s credit the achievement of having passed the IAS entrance exam but except for a 2-3 month training in Simla have not even the smithers of a professional knowledge. These are the people who run the nation’s finances. (more…)