Monday, January 25, 2021

BRETT STEENBARGER'S TRADING PSYCHOLOGY RESOURCE CENTER


Contact For Trading Firms and Media:  steenbab at aol dot com

My Twitter Feed:  @steenbab

RADICAL RENEWAL - Free blog book on trading, psychology, spirituality, and leading a fulfilling life

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The Three Minute Trading Coach Videos

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Forbes Articles:


My coaching work applies evidence-based psychological techniques (see my background and my book on the topic) to the improvement of productivity, quality of life, teamwork, leadership, hiring best practices, and creativity/idea generation.  Trading firms, teams, and portfolio managers interested in performance coaching and help with hiring processes can email me at steenbab at aol dot com.  Please note that my work is limited to trading and investment firms, so I cannot provide online advice or coaching services to individual, independent traders


FURTHER RESOURCES




I wish you the best of luck in your development as a trader and in your personal evolution.  In the end, those are one and the same:  paths to becoming who we already are when we are at our best.

Brett
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Saturday, January 23, 2021

Self-Esteem: Our Relationships Shape Our Relationship With Ourselves

  
Self-esteem is our relationship with ourselves:  how we view ourselves, how we treat ourselves, how we talk with ourselves, what we expect from ourselves, what we desire for ourselves, what we most respect, what we most admire.  Self-esteem is destiny: it determines what we seek, and that determines what we achieve.

Every relationship we have is a mirror, reflecting ourselves, providing an experience of ourselves.  Over time, we absorb what is mirrored to us: we internalize what we experience in relationships.  In positive relationships, we experience ourselves as worthy, capable, and special.  Through positive relationships, we internalize positive experiences of ourselves.

Our relationships are our psychological food.  Emotionally, they are what we absorb.  Just as the right foods nourish our bodies, the right relationships nourish our selves.  The love of parents for a child is internalized as that child's sense of self.  Abuse or neglect in a relationship is internalized as feeling unloved--and unlovable.

There are two simple ways to gauge a relationship.  The first is to share something painful you're going through, some great challenge that you're facing.  If the other person simply wants you for what you can provide them, they will not respond.  They are interested in taking, not giving.  If the other person actually cares about you, they will drop everything and reach out.  A good relationship is a secure shelter in the storm.

The second way to gauge a relationship is just the opposite.  Share something very positive that is happening in your life:  some joy, some success, some source of excitement and enthusiasm.  If the other person shares and cherishes your happiness, you know you have a potential soulmate.  If the other person is threatened by the best within you and does not respond to your joys and achievements, you know there is no true relationship. 

If I am by myself, I can either feel all-one or I can feel alone.  Self-esteem shapes how we experience our own company.  If being on your own feels like being alone, you know you've absorbed the wrong relationship experiences.  

Life is too short to settle and compromise.  When we accept those who resent us and secretly long to hear negative things about us, when we accept those who simply want to use us and cannot reach out to us, we lose pieces of ourselves.  You are living your life story, and you're the hero or heroine of that exciting drama.  Find the right people to share that story with and you'll have the life you truly deserve.

Further Resources:




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Saturday, January 16, 2021

Can Intensive Practice Produce Trading Expertise?

 
One practice I have noted among successful discretionary traders is their review of price action in markets.  Some have used replay functions on their charting platforms to see patterns unfold in the market, making them more sensitive to the occurrence of these patterns in real time.  Especially among daytraders, I've noticed that their trading is largely based upon visual and numerical information on screens.  What they are looking at amounts to patterns in market behavior, just as physicians look for patterns among symptoms and test results to make diagnoses.  For instance, a trader might observe that prices are breaking out of a narrow range with increased volume and increased lifting of offers on a depth of market screen.  That might be an indication that the market is establishing a new, higher level of value.

Pattern recognition, however, is a trap as well as a gift.  We can identify patterns where nothing meaningful is actually occurring.  Many chart patterns that traders look for have no causal relationship to price movement and ultimately lead to frustrated and unprofitable trading.  Promising patterns in markets are ones that capture an understanding of what is going on between buyers and sellers.

Physicians learn the pattern recognition of diagnosis through repeated experience.  A radiologist may need to look at many, many images in order to detect malignant growths or hairline fractures.  A psychiatrist may need considerable experience to identify when a mood swing is part of a depressive disorder, anxiety disorder, or bipolar disorder.  Case studies and years of training provide the repeated exposure that allow for accurate pattern recognition.

What if a major reason for the failure of developing traders is not a lack of discipline or disruptive emotions, but rather the lack of repeated exposure to meaningful patterns?  Traders review their trading and look over charts, but is this really the same as training oneself to identify patterns in real time?  Would reading books or reviewing medical charts substitute for observing actual patients for doctors building expertise in diagnosis?

I recently had a worthwhile conversation with Al and Kunal, the principals of TradingSim, a platform that allows traders to replay stocks and markets from any recent period of time in order to practice trading skills. Joining us was Andrew, the leader of the BearBulls online trading community.  One of the intriguing topics we explored was the use of a feature-rich trading simulator as a way that independent traders could drill their trading skills.  This strikes me as having tremendous potential, as it potentially provides a level of intensive practice not typically available to individual traders.

I recently suggested that a major component of trading success is the capacity for sustained focus.  What if the right kinds of trading drills become ways of cultivating the capacity for focus, so that we become better pattern recognizers over time?  In that scenario, trading psychology follows from superior training.  Intensive practice may lead to trading expertise, and it also may build the brain states most likely to result in sound trading.

Further Resources:



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Sunday, January 10, 2021

Why Your Trading Psychology Exercises Don't Work

 
In the most recent Forbes article, I make the case for mastering our trading psychology by literally engaging in brain training. When I refer to brain training, I am not talking about online exercises or apps that walk you through visualizations, breathing exercises, etc.  Rather, I am talking about directly measuring our body's functioning and training ourselves to control those measures through real time biofeedback.

Over the past two weeks, I have conducted focused experiments with heart rate and heart rate variability, electrodermal activity, and brain wave patterns, using the Fitbit Sense and Muse S units that I referenced in the earlier article.

Here are a few observations that were unexpected:

1)  Taking a Break Doesn't Necessarily Break Our Stress - When I feel stressed and take a break, calming myself and deepening my breathing, I succeed in taking my attention from what is troubling me and I feel more settled, but my body has often not recovered. My heart rate remains elevated, my electrodermal activity and heart rate variability still record stress, and my brain waves are not calm.  Simply taking a break and saying nice things to oneself feels good when we've been frustrated, but may not significantly aid performance.

2)  Less Stress Does Not Equal Greater Focus - This has been dramatic in my experiments thus far.  I can remain still, breathe deeply, and engage in calm imagery and that will reduce my heart rate over time.  (It takes longer than most of us allot to trading breaks.)  When I measure my brain waves, however, they do not show that I'm more focused.  Indeed, to achieve high focus readings with the brain waves, what I need to do is concentrate, not relax.  Interestingly, when I do a meditation routine and do it well, it helps my stress measures (i.e., I'm more relaxed), but my brain waves don't register as being in the zone.  A few minutes of a meditative exercise is very different from mastering the discipline of meditation.

3)  A Few Minutes of High Focus Changes Our Psychology - Most of us are familiar with the feeling of being calm and unstressed. That relaxed state can be helpful in winding down from a period of trading.  A highly focused state feels quite different.  When I'm unusually focused (and the brain wave feedback registers such focus), I feel a slight tension in my forehead and I feel distanced from the world around me.  It doesn't feel relaxed, as one might feel after an alcoholic beverage.  It feels quiet and I feel separated from the world, more like an observer than a participant in what is going on.  Perception is different in this mode, clearer and not at all distracted.  I'll have more to say about this in the next Three Minute Trading Coach video, but my sense is that I see markets much better when I'm highly focused than when I am simply stress free.

So what does all this mean?  Perhaps we're managing our trading psychology the wrong way.  Perhaps we're trying to de-stress when we need to be intensely focusing.  Perhaps we are setting up our trading days and processes in ways that increase distraction and actually prevent us from achieving the focus needed to quickly process evolving market patterns.  Our efforts at improving our trading psychology might not work because we're focusing on our feelings rather than strengthening our brains.

Further Resources:



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Sunday, January 03, 2021

What You Trade Is As Important As How You Trade

 

Happy 2021 to colleagues and readers!

In this new year, I'll be doing something different with my blog posts and making efforts to link to the work of trading educators and mentors whose work I enjoy and respect.  The goal is to highlight valuable lessons for traders and also to introduce ideas and contributors readers might not be familiar with.

This week's lesson is "what you trade is as important as how you trade".

Here's a straightforward example from my recent coaching experience:

A trader focused day to day on "catalyst" events that would provide directional opportunity.  For instance, he might trade breaking news from a central bank meeting, a data release, or a news headline.  He worked diligently on refining his entries and exits in these trades, hoping to generate quick profits that supplemented his longer-term, thematic macro trades.  Indeed, this focus on how he traded catalysts improved the Sharpe ratio of those trades over time.

During one of our meetings, he briefly noted some frustration that some of the catalyst trades went on to become great trending moves, but only after he had exited his positions.  So, we investigated his recent successful trades and examined which ones went on to become larger opportunities.  What we found was that it wasn't just the move in a single trading instrument in response to the catalyst that made a difference; it was the move across multiple, related instruments.  

A simple example would be a stock that moves higher on an earnings beat.  If the move is idiosyncratic--limited to that stock--it tended to make for a good short-term trading opportunity.  If the relevant sector moved higher on the earnings beat, this was a sign that the news signaled a broader opportunity for an entire industry and would be more likely to be picked up by equity investors.  On those occasions, it made sense to keep a portion of the position on, as long/short investors and trend followers were likely to join the bandwagon.

Another example would be an economic release that leads to a move lower in the U.S. dollar.  If the dollar moves lower across multiple crosses, this might have very different implications than a dollar move that occurs mostly against a single currency.  If the dollar move is accompanied by correlated moves across the interest rate curve, this, too, might suggest that the macro world is interpreting the news in a way that could lead to trending behavior.

The trader I met with thus focused his energy on *what* he traded, not just on the mechanics of entries and exits.  Prioritizing opportunities that displayed a breadth of response to a catalyst, he became more selective and achieved a higher quality of returns that included both short-term opportunistic profits and the profits from the holding of longer positions.

In 2020, if you were trading stocks, the sectors that you focused on made all the difference in your returns.  The growth stocks and IPOs emphasized by Kathy Donnelly, Eve Boboch, and colleagues, for example, have performed phenomenally versus more value-oriented shares.  Once focused on the area of opportunity--the *what* to trade--it then makes sense to refine the *how* to trade.  Indeed, that was the focus of Kathy's recent podcast with Richard Moglen:  how to decide upon exits in these large opportunities.  But as Kathy relates to Richard, the initial focus of their efforts was Eve's focus on finding the next Google--figuring out *what* to be trading.

A different example of focusing on what to trade came in my own trading, as I reviewed the work of Brian Shannon at Alphatrends.  He has pioneered the application of "anchored VWAP" in trading, including the use of multiple volume-weighted average price lines anchored by key market events.  What I found, based on Brian's work, is that when anchored VWAPs at different time frames converge--and when that convergence is occurring across multiple stocks in a sector--that often provided potential breakout opportunities that had real investment implications.  Those breakouts were ones that investors would be more likely to hop on, providing the longer-term potential.  Here the *what* to trade was defined by the intersection of technical criteria and the breadth of the market opportunity.

Finally, I have noted in the past that the unusual success of many traders at SMB Capital can be attributed to a focus on what they trade and not simply on their work on how to trade the opportunities.  An important tool in this regard is "relative volume".  When a stock displays unusually high volume relative to its past, that's an indication it is "in play" and drawing unusual trader and investor interest.  Because volume correlates highly with volatility, such stocks are more likely to display meaningful moves for short-term traders.  Interestingly, many of the best opportunities are found among smaller cap stocks that don't have a large institutional or algorithmic following.  It is easier to read the tape with those stocks, allowing for better identification of when buyers or sellers dominate.  The same trading techniques applied to widely traded vehicles, such as stock index ETFs, would be far less profitable.

Focusing on what to trade means becoming more selective in our trade selection, prioritizing the quality rather than quantity of opportunities.  As for any successful entrepreneur or oil driller, where to seek opportunity makes all the difference.  You can have the greatest drilling equipment in the world, but if you're looking in the wrong spots, all you'll get are dry holes.

Further Resources:

The Three Minute Trading Coach - 30+ short videos to help traders coach themselves

Forbes Articles - A large archive of articles on methods for improving performance

Trading Psychology 2.0 - Book outlining how we can find our best practices and turn those into repeatable processes   
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Sunday, December 27, 2020

What Distinguishes Professionals From Amateurs

 
I see some traders tackle markets for years and never achieve even basic competence.  Then I work with others that achieve unusual success in their first years.  What makes the difference?  Yes, work ethic and skill/talent sets matter quite a bit, but what increasingly hits me between the eyes is the difference in the learning process between amateurs and developing pros.  Here are two of those differences that make a difference:

1)  Professionals keep score - Can you imagine a weightlifter who doesn't track how much they're lifting, how many reps they're doing, which muscle groups they're working, how much body mass they're adding?  Conversely, consider the golfer who uses sensors and apps to track their golf swings, identifying details of what they're doing right and wrong on various courses and holes.  Pro basketball teams review game film in agonizing detail; amateurs leave the game behind once they leave the court.  In trading, we can easily keep score, with performance stats ranging from how much heat we take on a trade to how much we make and lose for various types of trades.  What amazes me is that, when traders keep score, they learn about strengths and weaknesses in ways that they do not when they just review their weekly or monthly P/L.  As I recently shared in my article on building your personal process, I have been using the Fitbit Sense and MuseS units to track my sleep, exercise, stress levels, focus, and much more.  To my surprise, I might think that I'm calm and focused, but all the data sometimes tell me otherwise!  By constructing daily exercises and keeping score, I'm getting better and better at my own trading psychology.  If a psychologist needs to keep score to improve mindset, the odds are pretty good that most of us could benefit.  :)

A couple of tools for tracking performance and keeping score are TraderVue and Edgewonk.  What I find with the successful developing SMB traders is that how they use such tools makes all the difference.  When the score keeping leads to small, steady, consistent improvements in trading, the result is an amazing improvement in trading consistency.  Once that consistency is achieved, sizing can be increased without undue downside exposure.  The traders that simply track P/L and state global goals ("I need to eliminate my overtrading") simply do not make the detailed improvements that lead to consistency.

2)  Professionals emphasize logistics - An amateur plans a surprise attack on the enemy; a pro works out the details of how troop movements will be hidden, how to deliver timely air support, where to achieve quickest exit from the battle area, etc.  Similarly, amateurs talk about "setups".  Professionals identify precise ways to gauge real time price movement shiftsorder flow and sentiment to achieve superior reward relative to risk.  Professionals have different ways to trade different kinds of markets; amateurs approach the market with a one-size-fits-all mentality.  Tools such as Market Profile (volume traded at each price level and the distribution over time); Delta (volume traded at market offer and bid prices through the day); and anchored Volume-Weighted Average Price enable traders to take good ideas and turn them into great trades.  Brian Shannon's work on tracking opportunity across multiple time frames is an excellent example of how logistics make the difference between a successful tactic and an unsuccessful one.  Mike Bellafiore's work on "playbooks" also illustrates how work on trading logistics can become part of a robust trading process.

There will always be "gurus" who want to tell you that there are easy ways to make money in markets or that success can be found in chart patterns or mindsets.  The simple truth is that if the majority of traders pursued *any* performance field without keeping score and building logistics, they would fail.  Every professional starts as an amateur.  It's how they work on their craft that makes all the difference.

As we count down the wild year of 2020, I would like to wish all readers a happy, healthy, and successful 2021.  With fewer but more in-depth blog posts and Forbes articles and trading coach videos to support the ideas, my hope is to provide traders with the largest repository of free trading psychology materials in the world.  The great traders don't have a passion for trading; they have a deep and sustained passion for self-improvement.  Markets are simply the canvas upon which they paint their masterpiece.

Further Resources:


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Sunday, December 20, 2020

How To Sustain A Peak Performance Mindset

 
This week's Three Minute Trading Coach video tackles the topic of "personal process" and what it takes to become more consistent at managing ourselves and keeping ourselves in peak performing condition. So what goes into a personal process?  The most recent Forbes article introduces the idea of "holistic development", in which our self-management pursues multiple areas of growth, creating powerful synergies.  Instead of setting different goals each day and never really working on any areas in a deep, ongoing way, we can turn personal development into a true personal process, where we work on key areas of growth day after day.

The idea here is that we can develop a peak performance mindset the same way we develop peak performance in trading.  Working with traders at SMB Capital, I've been impressed by the pace of trading success among developing traders who consistently keep score in their trading, track what's working and what's not, and make small but steady improvements in what and how they trade. These traders consistently review which trading ideas are working and which aren't; which times of day are most and least profitable; which ways of managing positions are working best; and so much more.  It's in collecting all this information through platforms such as Tradervue that traders can develop by making consistent efforts to do more of what works and change what's not working. 

When we make these steady, successful efforts at improvement, we generate a positive mindset based on growth.  In that peak mindset, we are energized and most likely to see and act upon opportunity.  I recently spoke with a trader who perceived opportunity in the late-day trading when TSLA was added to the S&P 500, but did not act on the opportunity because of fatigue and fear of loss.  When we are in peak performance mode, the sense of impossible becomes a mindset of "I'm possible", helping us take advantage of current opportunities and perceive emerging ones.

The same scorekeeping that works for developing traders can also anchor our personal processes.  In the coming year, I will be working intensively with Fitbit and Muse to collect data on my stress levels, focus, fitness, sleep quality, and much more.  That information will help me tailor eating, sleeping, exercise, work routines, and social activity to maximize positive emotional experience, energy, and productivity.  My hypothesis is that the resulting increased well-being will spill over to a variety of life areas, from trading to personal relationships and professional ones.

Many traders want to work on their psychology by reducing negative emotional experience.  There is an entire horizon of development that they miss by not maximizing their mindsets and creating a peak performance lifestyle.  The process that creates trading success is the same one that fuels life success.  We have the tools available to turn excellence into a lifestyle.

Further Resources:





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Sunday, December 13, 2020

What Are Your Goals For 2021?

 
I recently offered a Three Minute Trading Coach video on the topic of setting effective trading goals.  Now that we're wrapping up the challenging 2020 year, it's only natural to think about goals for the year to come.  Here are several pitfalls that I'm observing among the traders I'm speaking with:

1)  Exhaustion - A number of traders understandably just want this year to be over with.  After the pandemic, crazy political gyrations, and shifts in market themes, many traders simply want a break.  Indeed, taking time off at the end of the year and renewing energy and focus is itself a worthwhile goal.  The risk, however, is that we so focus on the needs of here and now that we don't formulate powerful visions and goals for the coming year.  Once we've rejuvenated, it's important to perform a thorough review of the year, identify clearly what you did well and what needs improvement, and then set specific plans for growth in 2021.  Perhaps you want to expand the opportunities that you pursue in markets; perhaps you want to refine your network of colleagues to generate better discussions and ideas; perhaps you want to grow your risk-taking:  defining specific goals that excite and scare you will provide you with energy to tackle the new year.  The right goals and goal-setting *gives* energy.

2)  Setting Narrow P/L Goals - While 2020 was a difficult year for many people personally, it in fact has been a profitable year for many traders, especially shorter-term traders that benefit from expanded volatility and the speculative flows that have entered the stock market.  I'm working with quite a few traders who have had record years in 2020 and phenomenal monthly returns in November, as SMB recently shared.  It is only competitive human nature to want to build upon such performance and define even more lofty performance goals.  This can be a trap, however.  We don't know what the market environment for 2021 will be.  Could we have known in December, 2019 what 2020 would bring?  If we increase our risk-taking in the wrong environment, we could expose ourselves to quite a setback.  This is why setting process goals is more important than setting absolute P/L goals.  (See the upcoming Three Minute Trading Coach video on setting process goals). 

3)  Setting Goals Without Setting Up Plans and Procedures - As the saying goes, a goal without a plan is merely a wish.  I see many traders setting lofty goals--and then providing no detail about how, specifically, they will pursue those goals.  Here's an important principle:  if you are really serious about your goals, you are doing something *every day* to pursue those goals.  If our goals aren't alive daily, then they are nothing more than good intentions.  If your goals are worth pursuing, they should be alive and active every single day.  That is true for your personal goals just as much as your trading goals.  Many traders are great at setting goals and not so great and keeping those alive day to day.  It's the daily work on goals that helps us internalize new attitudes, behaviors, and skills.

One more observation, this also based on my observation of the traders at SMBI'm seeing huge growth in trading skills, experience, and profits when the right traders team up with one another.  When traders with different skills and perspectives but similar trading styles share ideas, everyone makes everyone else better.  Proof of that has been that some of these team efforts have led to joint trading books among the SMB traders, where the positions come from the independent thinking of two or more collaborating traders.  When multiple smart people who do good research come up with the same idea independently, the odds of them all being wrong are pretty small.  Those joint books have been phenomenally consistent and profitable.  In 2021, you might ask the question:  Who can I team up with to make them better and to make me better?  Great things can happen when we approach trading as a team sport!            

Further Resources:





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Sunday, December 06, 2020

How To Overcome Self-Critical Thinking and Tilt Trading

 
For many traders, their greatest enemy is the harsh self-criticism they heap upon themselves after losing money or missing opportunity.  Self-criticism occurs when we channel normal and natural frustration (which any competitive trader is apt to feel from time to time) as anger directed toward ourselves.  When we turn our frustrations against ourselves as anger--telling ourselves that we're no good or not good enough, that we'll never succeed, that others are doing so much better than us--we create emotional distractions and a loss of focus that can only lead to subsequent poor trading.

If you read through the most recent Forbes article, you'll notice an interesting set of findings:  Leadership and management work best when they are expressed through positive people skills.  Being a caring leader or manager is just as important as being a tough and challenging one.  Tapping into the goals and visions of others is just as important as projecting organizational goals.  Caring about people brings out the best in people.  That is true at work, and it's certainly true in our home lives.

So why should it be different in managing ourselves and our trading careers?

We channel frustration as anger when we make losing unacceptable.  If losing is a threat and a failure, then the aggressive, competitive parts of ourselves will turn against us.  It's a great example of how we can take a strength too far and turn it into a vulnerability.  The only way we can balance that aggressive and competitive strength is to balance it with a very different strength:  self compassion.  Just as we would empathize with another trader who goes through a difficult trading period, we want to be able to empathize with our own situation during inevitable periods of drawdown.  

This is why I emphasize the importance of treating losses as potential learning lessons and actually *embracing* them in our reviews.  From the vantage point of deliberate practice, setbacks are the very fuel of growth.  If we are coaching ourselves, we want to be our greatest support systems--especially during difficult times.  It works in the management of organizations, and it works in our self-management.  We can overcome self-critical thinking by replacing it with constructive thinking--and we can turn constructive thinking into a positive habit pattern by developing sound review processes.    

In my upcoming Three Minute Trading Coach video, I will describe a centuries-old technique for cultivating self-compassion and defusing self-directed frustration.  

One more thought, however:

Trading on tilt is often not a primary trading problem, but a reaction to a deeper, underlying problem.

We typically go on tilt after a setback in our trading ignites our frustration and our frustration ignites anger and a very negative sense of ourselves.  We go into overtrading/tilt mode to try to make the money back, and we try to make the money back to try to restore our emotional equilibrium and feel better about ourselves.  

In psychodynamic terms, tilt trading is a defense.  It's a way of attempting to ward off damaging self-criticism triggered by losses and missed opportunity.  Of course, such trading on tilt only deepens the losses, leading to serious emotional setbacks.  

If we want to eradicate tilt trading, we need to balance that aggressive drive to win with an equally assertive sense of self compassion.  Once in balance, we can channel frustration in ways that enhance us and further our learning in markets.  It sounds strange, but drawdowns can be gifts, teaching us something about markets, something about ourselves, something about our trading ideas, something about how we trade those ideas.  The goal is not to avoid loss; the goal is to keep learning and get better and better and better.

Further Resources:





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Sunday, November 29, 2020

Tackling Your Problems Will Never Optimize Your Life--Or Your Trading

 
Note from Brett:  While going through my old trading journals, I came across this piece of writing that I had typed out (pre-computer days!) in 1997, seven years before I began working with traders in financial markets.  Reading through it today, I'm struck by how my concerns about traditional psychology are now mirrored by my concerns about traditional trading psychology.  Below is a segment from what I wrote in 1997; see what you think!

Traditional psychology offers relatively little to the average person.  It contents itself with solving problems, unlearning and relearning behaviors, remediating childhood conflicts, and ameliorating disorders.  It has little to say regarding the development of supernormal states of consciousness, creativity, and greatness.

To be sure, there is nothing wrong with developing insight into one's past, getting in touch with disowned experience, or learning coping skills.  These can be quite valuable and enriching.  But the remediation of a deficit will never produce the achievement of an asset.  Reducing unhappiness will not achieve joy, challenging negative self-talk will never generate greatness, and all the coping skills in the world will not yield the sustained focus, drive, and passion that are the hallmarks of extraordinary achievement.

A "psychology for the mentally well" begins with the realization, articulated by writers as diverse as G. I. Gurdjieff, Colin Wilson, William James, and Carlos Casteneda, that change is impossible while we remain in our habitual states of consciousness.  Talking about "issues" or working on changing behavior while remaining in our characteristic states is like trying to improve the reception on a TV by switching channels.  "What can one do in sleep?", Ouspensky asks his students.  "One can only have different dreams--bad dreams, good dreams, but in the same bed.  The dreams may be different, but the bed is the same."

Such is the state of most applied psychology.  It changes the content of our thoughts, but we remain in the same "bed".  An enhanced psychology would be one that wakens us, takes us from our bed.  That is because, when we can access different states of consciousness, we become able to process self-relevant information in qualitatively different, creative, and constructive ways.

Several days ago I found myself running late for a morning meeting.  In a frenzy, I attempted to beat the clock by getting myself dressed, checking on overnight trading in the financial markets, and getting my children to school.  I went to the closet to get my jacket, but it was nowhere to be found.  Twice I scanned the rack and could not find the jacket.  Meanwhile, the clock was ticking and I was growing frustrated with my mounting lateness.  Suddenly, without premeditation, I closed my eyes and evoked a piece of music that I have come to equate with a clear and calm state of mind.  I calmly walked back to the closet and began looking for the jacket between the hanging garments.  Sure enough, it had fallen off its hanger and was caught between to other articles of clothing.
 
What is important in this is that, in my ordinary state of consciousness, I was incapable of seeing between the garments.  The jacket was lost as long as I remained in my normal mode.  Only once I had shifted to another state was I able to see.  How much else lies "between the garments", unseen, while we fuss and fume through the racks of life?

My only addition to the above, now in 2020, is that the most important edges in trading lie "between the garments".

Brett


Further Resources





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