Thursday, January 29, 2009
12:13 noon - How Do You Feel About Your Trading?
How Do You Feel About Your Trading?
by R.J. Hixson
The other day a friend told me she was having trouble signing a contract because she didn’t feel good about it. Her comments reminded me of how I felt about my trade entries that morning for one of my systems. I was still pulling the trigger but wasn’t feeling totally good about it. The system was performing well, but I’ve started to wonder if these unfamiliar market conditions might affect that system, and I’ve recognized some feelings of slight doubt at the entries.
Van stresses the critical importance of feelings, emotions, and mental states for traders. Those aren’t topics to which I paid much attention previously, especially relating to making money in the markets. By deepening my understanding of this area and following a simple process, my trading has seen a dramatic improvement.
How Do You Feel?
How do you feel right now? Moreover, how adept are you at identifying and describing how you feel? Good, fine, or OK? Those were the core of my emotional vocabulary before doing the Peak
Performance Home Study Course and other psychological courses since. Because we define reality through language, limited vocabulary can effectively limit options, a less than desirable condition when you have the ability to choose.
Quick test: write down as many descriptive emotional words as you can in one minute. How many emotions could you list? I thought I did pretty well coming up with 13 emotions by the one minute point—about the same time I was running out of words. Then, I turned the page in the book where I found this exercise to see over 300 words listed, and these were just positive emotions! I felt quite humbled (which, by the way, wasn’t one of my 13 words). Admittedly, I wasn’t highly conscious of my feelings or able to describe them very well.
To help traders with the common condition of being unconsciousness of their feelings, Van uses a bag of marbles to create a trading simulation game. It’s partly an emotional laboratory in his workshops. As the marbles get pulled, the teams respond and the drama ensues. He’s constantly prodding the players to “Notice your feelings.” It’s been enlightening to record how emotionally I can react in a simple game involving small amounts of money. Also watching my teammate’s wild-eyed excitement, frustrated aggravation, or occasional blank-faced despondence has been educational. Funny, I’ve felt each of those too the way I used to trade.
That’s the whole point of the game though—to generate emotions, to push your buttons in a controlled environment where you can notice what’s going on inside. In playing the game multiple times, I’ve experienced a wide range of emotions. It reminds me of the way I felt when I was trading several years ago.
The marble game is a powerful experience; ask anyone who’s played. From it, I’ve learned that clear objectives and preparing a thorough plan can make the game plain fun. On teams where we have taken these steps, I’ve felt calm, attentive and joyful.
An Emotionally Driven Process
My emotions used to be driven by what the market was doing. Volatility was good and smooth periods were bad (it meant waiting patiently or impatiently). By trying to call market turning points, I would be elated when I caught them or upset when I missed them. On top of that, my position sizing strategies (or lack thereof) provided another whole level of emotional reactions that compounded my responses to catching or missing the market turns. Gains engendered larger positions while losses produced seemingly more turning points to trade in my effort to make up some of the losses. For quite awhile, I actually thought this was working; I was only losing “some” money overall. When I was about halfway through the Peak Performance course, I started to recognize what was going on. I had been very lucky not to have blown up my entire account.
Process Driven Emotions
I was doing nearly nothing like what Van laid out in the Top Tasks of Trading, which were a host of new concepts. More important for me were some simple fundamentals for successful trading that I could follow:
1. Having a clear process.
2. Defining an effective emotional state for each part of the process.
3. Being able to get into those mental states to trade.
Wow, this was the most non-technical and radical trading advice I had read since I had decided to “get serious” about trading a few years back.
The Top Tasks of Trading provided a simple and effective structure to deal with a range of trading issues, including the emotional results of my trading. Rather than my variable trading results causing variable emotions, the Tasks could help me generate certain emotions in order to create stable trading results. Furthermore, the Tasks are simple steps that make it easy to identify and address individual trading issues that come up—like my entries last week.
Ken Long explains that he likes to feel professional when he trades. That’s an appealing idea for me, and I’ve adopted that as a mental state when I play the marble game as well as when I trade. The whole idea of picking how I would like to feel when trading was a new idea for me.
Prescription
To help improve my feelings about my recent entries, last weekend I checked a few things. Systems results—positive. Big picture—unchanged. The Top Tasks—a very fruitful review. Several tasks will play a supporting role with my entries this week including a review of my trading system, my ongoing self-analysis, and knowing I have an upcoming periodic review. One particular task, however, is where getting into a particular mental state will help me a great deal. It’s the action step where all of the “work” for a trade has been done already and the task is just to enter the position. I now remember to feel good when I have a valid setup and to enter the trade without thinking. The mental state for this step is to be totally committed to the entry. Remembering that little bit will help a lot this week.
Beyond Trading
Need I mention that if it’s possible to pick a particular mental state to get in to for trading, that it just might be a useful skill for life in general? It’s funny that working on a “trading skill” also has made my life better. I like to feel great. “Feel great” is simply a mental state that I can create now pretty easily instead of waiting for certain things to happen. Now, do I do that all the time? Well, no, but that’s called self-sabotage and a whole enchilada for another day.
How do you want to feel in your trading? How about a broader question: how do you want to feel in your life? Wayne Dyer said the plain statement “I want to feel good” can have a profound impact on your thinking.
Trade well and take care.
by R.J. Hixson
The other day a friend told me she was having trouble signing a contract because she didn’t feel good about it. Her comments reminded me of how I felt about my trade entries that morning for one of my systems. I was still pulling the trigger but wasn’t feeling totally good about it. The system was performing well, but I’ve started to wonder if these unfamiliar market conditions might affect that system, and I’ve recognized some feelings of slight doubt at the entries.
Van stresses the critical importance of feelings, emotions, and mental states for traders. Those aren’t topics to which I paid much attention previously, especially relating to making money in the markets. By deepening my understanding of this area and following a simple process, my trading has seen a dramatic improvement.
How Do You Feel?
How do you feel right now? Moreover, how adept are you at identifying and describing how you feel? Good, fine, or OK? Those were the core of my emotional vocabulary before doing the Peak
Performance Home Study Course and other psychological courses since. Because we define reality through language, limited vocabulary can effectively limit options, a less than desirable condition when you have the ability to choose.
Quick test: write down as many descriptive emotional words as you can in one minute. How many emotions could you list? I thought I did pretty well coming up with 13 emotions by the one minute point—about the same time I was running out of words. Then, I turned the page in the book where I found this exercise to see over 300 words listed, and these were just positive emotions! I felt quite humbled (which, by the way, wasn’t one of my 13 words). Admittedly, I wasn’t highly conscious of my feelings or able to describe them very well.
To help traders with the common condition of being unconsciousness of their feelings, Van uses a bag of marbles to create a trading simulation game. It’s partly an emotional laboratory in his workshops. As the marbles get pulled, the teams respond and the drama ensues. He’s constantly prodding the players to “Notice your feelings.” It’s been enlightening to record how emotionally I can react in a simple game involving small amounts of money. Also watching my teammate’s wild-eyed excitement, frustrated aggravation, or occasional blank-faced despondence has been educational. Funny, I’ve felt each of those too the way I used to trade.
That’s the whole point of the game though—to generate emotions, to push your buttons in a controlled environment where you can notice what’s going on inside. In playing the game multiple times, I’ve experienced a wide range of emotions. It reminds me of the way I felt when I was trading several years ago.
The marble game is a powerful experience; ask anyone who’s played. From it, I’ve learned that clear objectives and preparing a thorough plan can make the game plain fun. On teams where we have taken these steps, I’ve felt calm, attentive and joyful.
An Emotionally Driven Process
My emotions used to be driven by what the market was doing. Volatility was good and smooth periods were bad (it meant waiting patiently or impatiently). By trying to call market turning points, I would be elated when I caught them or upset when I missed them. On top of that, my position sizing strategies (or lack thereof) provided another whole level of emotional reactions that compounded my responses to catching or missing the market turns. Gains engendered larger positions while losses produced seemingly more turning points to trade in my effort to make up some of the losses. For quite awhile, I actually thought this was working; I was only losing “some” money overall. When I was about halfway through the Peak Performance course, I started to recognize what was going on. I had been very lucky not to have blown up my entire account.
Process Driven Emotions
I was doing nearly nothing like what Van laid out in the Top Tasks of Trading, which were a host of new concepts. More important for me were some simple fundamentals for successful trading that I could follow:
1. Having a clear process.
2. Defining an effective emotional state for each part of the process.
3. Being able to get into those mental states to trade.
Wow, this was the most non-technical and radical trading advice I had read since I had decided to “get serious” about trading a few years back.
The Top Tasks of Trading provided a simple and effective structure to deal with a range of trading issues, including the emotional results of my trading. Rather than my variable trading results causing variable emotions, the Tasks could help me generate certain emotions in order to create stable trading results. Furthermore, the Tasks are simple steps that make it easy to identify and address individual trading issues that come up—like my entries last week.
Ken Long explains that he likes to feel professional when he trades. That’s an appealing idea for me, and I’ve adopted that as a mental state when I play the marble game as well as when I trade. The whole idea of picking how I would like to feel when trading was a new idea for me.
Prescription
To help improve my feelings about my recent entries, last weekend I checked a few things. Systems results—positive. Big picture—unchanged. The Top Tasks—a very fruitful review. Several tasks will play a supporting role with my entries this week including a review of my trading system, my ongoing self-analysis, and knowing I have an upcoming periodic review. One particular task, however, is where getting into a particular mental state will help me a great deal. It’s the action step where all of the “work” for a trade has been done already and the task is just to enter the position. I now remember to feel good when I have a valid setup and to enter the trade without thinking. The mental state for this step is to be totally committed to the entry. Remembering that little bit will help a lot this week.
Beyond Trading
Need I mention that if it’s possible to pick a particular mental state to get in to for trading, that it just might be a useful skill for life in general? It’s funny that working on a “trading skill” also has made my life better. I like to feel great. “Feel great” is simply a mental state that I can create now pretty easily instead of waiting for certain things to happen. Now, do I do that all the time? Well, no, but that’s called self-sabotage and a whole enchilada for another day.
How do you want to feel in your trading? How about a broader question: how do you want to feel in your life? Wayne Dyer said the plain statement “I want to feel good” can have a profound impact on your thinking.
Trade well and take care.
9:23 am - FKLI gap up slightly. FKLI looks to move sideway to downward !
Regional market is retreating from its opening high this morning !
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