Monday, June 23, 2008
10:13 am - A Good Article by Joe Ross !
: Are you a frustrated trader?
By Joe Ross
I hate setbacks. I hate to admit that, for most traders, setbacks are the rule rather than the exception. Finding reliable trading strategies is really a challenge, and often, after a whole lot of work, a promising strategy produces a loss. Losses and other setbacks tick me off.
YOUR ABILITY TO TOLERATE FRUSTRATION IS ESSENTIAL
Yet I know that winning traders cannot allow themselves to be fazed by these setbacks. Winning traders welcome challenges rather than hide from them -- at least that's what all the books say. To a certain extent it's true; your ability to tolerate frustration is essential. Because setbacks are real, it is important to have a specific and active plan for coping with them; otherwise they can build up psychologically and produce problems of chronic stress. I've been there, as have many of you.
The reality is that your mind and body have limited resources, and unless you cope with frustration and anxiety effectively, you'll eventually become exhausted. You'll lose your ability to focus and process information objectively.
However, all is not lost; don't despair. By taking a few specific preventive measures, you can build up your ability to handle frustration to the point where you can handle a series of trading setbacks.
ACCEPT SETBACKS AS A NATURAL PART OF LIFE
Do not make the mistake that people with low frustration tolerance tend to make. They believe that they should experience absolutely no setbacks. But setbacks are a natural part of life.
I've read that instead of thinking of setbacks as dreaded events, challenges and setbacks can be viewed as part of the excitement and stimulation of living. Man! Where do these guys get that kind of stuff? That's like someone telling you to learn to love losses. In all my years of trading, I've never learned to love losses. How can I love something that kicks me in the face? I have learned to tolerate losses, but love them? No way. And it's the same with setbacks. I will never learn to look at them as as an opportunity to learn and develop my trading skills rather than as a discouraging impediment. I have setbacks. I tolerate setbacks. But to me they are never something to get excited about.
The Pollyanna shrinks who tell you setbacks are an opportunity can say that only because they've never really traded. They say that merely changing your viewpoint regarding potentially frustrating events can change your ability to tolerate them. But it's hard to change your viewpoint. About all you can do with setbacks is to expect them and accept them as natural, and not as a disaster. If you can get that far, you'll feel less frustrated. And rather than passively feeling paralyzed by them, you'll try to creatively think of ways you can use the setbacks as a new starting point than can lead to a higher level of trading ability.
Setbacks are ways for you to gain more experiences with the markets and sharpen your trading skills, but don't fall in love with them. They hurt. Ouch!
PREVENTIVE MEASURES
There are things you can do to take preventive measures to build up your tolerance to frustration. The most important steps concern building up physiological defenses. It is difficult to cope with frustration when we are tired and worn out. By getting plenty of rest, and especially sleep, we can cope with frustration more easily. Regular exercise and proper nutrition can help your body create a natural defense against frustration.
MAKE A SPECIFIC PLAN TO GAIN PRACTICE AND EXPERIENCE
Once you are properly rested and nourished, you can also make a specific plan for coping with setbacks when they occur. In addition to accepting uncertainty and setbacks as part of your life, you should think in terms of the big picture. "Rome wasn't built in a day," and you shouldn't expect to become an expert trader overnight. You need extensive practice and experience. That can take time and money.
AVOID UNREALISTIC EXPECTATIONS FOR YOURSELF
Traders are frustrated when they set unrealistic expectations for themselves, and then fail to meet them. By realizing that it will take time to trade profitably, you'll feel more relieved, and you will anticipate setbacks. You won't be caught off guard, and you will be ready to deal with them. It may be discouraging at times to continually face setbacks. To cope with them, you may want to make a list of successful trades and recall them when you are feeling especially beaten. The key to frustration tolerance is to realize that, although external circumstances can interfere with your plans, you have the freedom to decide whether they will impact your mood. You can choose to feel beaten, angry, and frustrated, or you can anticipate setbacks, view them as growing experiences, and as ways to build your trading skills. The more you acknowledge that setbacks are a necessary part of trading, the more easily you'll cope with them.
By Joe Ross
I hate setbacks. I hate to admit that, for most traders, setbacks are the rule rather than the exception. Finding reliable trading strategies is really a challenge, and often, after a whole lot of work, a promising strategy produces a loss. Losses and other setbacks tick me off.
YOUR ABILITY TO TOLERATE FRUSTRATION IS ESSENTIAL
Yet I know that winning traders cannot allow themselves to be fazed by these setbacks. Winning traders welcome challenges rather than hide from them -- at least that's what all the books say. To a certain extent it's true; your ability to tolerate frustration is essential. Because setbacks are real, it is important to have a specific and active plan for coping with them; otherwise they can build up psychologically and produce problems of chronic stress. I've been there, as have many of you.
The reality is that your mind and body have limited resources, and unless you cope with frustration and anxiety effectively, you'll eventually become exhausted. You'll lose your ability to focus and process information objectively.
However, all is not lost; don't despair. By taking a few specific preventive measures, you can build up your ability to handle frustration to the point where you can handle a series of trading setbacks.
ACCEPT SETBACKS AS A NATURAL PART OF LIFE
Do not make the mistake that people with low frustration tolerance tend to make. They believe that they should experience absolutely no setbacks. But setbacks are a natural part of life.
I've read that instead of thinking of setbacks as dreaded events, challenges and setbacks can be viewed as part of the excitement and stimulation of living. Man! Where do these guys get that kind of stuff? That's like someone telling you to learn to love losses. In all my years of trading, I've never learned to love losses. How can I love something that kicks me in the face? I have learned to tolerate losses, but love them? No way. And it's the same with setbacks. I will never learn to look at them as as an opportunity to learn and develop my trading skills rather than as a discouraging impediment. I have setbacks. I tolerate setbacks. But to me they are never something to get excited about.
The Pollyanna shrinks who tell you setbacks are an opportunity can say that only because they've never really traded. They say that merely changing your viewpoint regarding potentially frustrating events can change your ability to tolerate them. But it's hard to change your viewpoint. About all you can do with setbacks is to expect them and accept them as natural, and not as a disaster. If you can get that far, you'll feel less frustrated. And rather than passively feeling paralyzed by them, you'll try to creatively think of ways you can use the setbacks as a new starting point than can lead to a higher level of trading ability.
Setbacks are ways for you to gain more experiences with the markets and sharpen your trading skills, but don't fall in love with them. They hurt. Ouch!
PREVENTIVE MEASURES
There are things you can do to take preventive measures to build up your tolerance to frustration. The most important steps concern building up physiological defenses. It is difficult to cope with frustration when we are tired and worn out. By getting plenty of rest, and especially sleep, we can cope with frustration more easily. Regular exercise and proper nutrition can help your body create a natural defense against frustration.
MAKE A SPECIFIC PLAN TO GAIN PRACTICE AND EXPERIENCE
Once you are properly rested and nourished, you can also make a specific plan for coping with setbacks when they occur. In addition to accepting uncertainty and setbacks as part of your life, you should think in terms of the big picture. "Rome wasn't built in a day," and you shouldn't expect to become an expert trader overnight. You need extensive practice and experience. That can take time and money.
AVOID UNREALISTIC EXPECTATIONS FOR YOURSELF
Traders are frustrated when they set unrealistic expectations for themselves, and then fail to meet them. By realizing that it will take time to trade profitably, you'll feel more relieved, and you will anticipate setbacks. You won't be caught off guard, and you will be ready to deal with them. It may be discouraging at times to continually face setbacks. To cope with them, you may want to make a list of successful trades and recall them when you are feeling especially beaten. The key to frustration tolerance is to realize that, although external circumstances can interfere with your plans, you have the freedom to decide whether they will impact your mood. You can choose to feel beaten, angry, and frustrated, or you can anticipate setbacks, view them as growing experiences, and as ways to build your trading skills. The more you acknowledge that setbacks are a necessary part of trading, the more easily you'll cope with them.
9:29 am - DJIA is certainly very bearish - "Hidden buying potential"
We may have a reversal bar tonite. Look at the ultra high volume from DJIA. I have not seen this for a long time.
9:09 am - FKLI gap down due to -200 DJIA overnite losses !
The FKLI is likely to move sideway or down for today !
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