Wednesday, December 23, 2009

Sustaining Self-Awareness During Trading

One important element of working on trading performance is sustaining self-awareness during trading, so that you know which strategies (setups) and tactics (execution) you're using at the times you're trading. After all, if you're not fully aware of what you're doing when you're doing it, can you hold that in memory to reflect upon it later and learn from it?

Many traders think that more days, weeks, and years of trading will give them better skills. But that's not necessarily so. It's the awareness of performance that enables us to internalize it, adjust it, and learn from it. Performing on autopilot is a recipe for repeating a day's worth of experience 250 times, not achieving 250 days' worth of experience.

Consider this perspective from wrestling coach Nick Cipriano:

"The strategy and tactics that wrestlers employ in competition are conceived in the practice environment, but they are often perfected in competition under stressful conditions. Through experience, wrestlers learn to better track match developments, and they slowly learn to adjust strategy and tactics accordingly. In my experience, I have found that highly accomplished wrestlers (as compared with novice wrestlers) can recall explicit details of their matches. I believe their recall ability is directly linked to their ability to process and interpret match developments, not only more readily, but also much more accurately. In my judgment, the coach facilitates development of this important psychological skill by integrating technical training with psychological training and by constantly reminding the wrestler during sparring sessions to monitor developments and adjust tactics accordingly. One specific strategy I use involves encouraging wrestlers to maintain a broad focus of attention during sparring and to visualize the actions of their opponent from a third-person perspective (as if watching the sparring from the sidelines). Being able to assess match developments from an external perspective allows a more accurate interpretation of strategic and tactical adjustments that must be made."

Expert Performance in Sports
Starkes and Ericsson (Eds.)
p. 165



The Stock Speculator said...

As a former competitive athlete, there is another thing that can be tranfered from the lessons in sports to trading: there is a HUGE difference between gym/training performance (paper trading) and competition (Live trading w your own money). You can be a killer on the mats, on the field or in the gym (no pressure) but absolutely come apart when the pressure is on during a match or game (live trading). I know plenty of "killers" who never learned how to handle pressure and therefore couldn't reach their full potential.

One of the edges competitive athletes have when coming into trading is we enjoy pressure and have learned to handle it. From breathing exercises during high stress situations to psyching ourselves up for the day, all of these are lessons learned in sports that transfer to trading.

Sorry if this is choppy, not enough coffee and not enough time to edit.

Curtis said...

This sounds comparable to Tholey's idea of maintaining a "wide field".