Thursday, March 19, 2015

Why Endurance is the Key to Trading Success

There is no characteristic more important to long-term trading success than the ability to weather setbacks and turn them into successes.   It 's not just that successful people endure longer; it's that they gain energy--they derive challenge--from the endurance.

Think about this:  losers are motivated by winning.  They need to win to thrive.  When they don't win, they lose their motivation, and that keeps them from winning.  Winners are motivated by losing.  Their struggles develop their strengths, and that contributes to future wins.

Yesterday was a kick in the teeth for some traders.  Anticipating a prompt pace of Fed normalization of rates, they were expecting a strong dollar and higher rates.  We got just the opposite.

The winners are those reassessing monetary policy, reassessing views and positions, reviewing what they might have missed, adapting to the new information, and learning from the experience.  When trades don't go their way, they may pull back their risk-taking, but they double down on effort, preparation, and the generation of ideas.  

It is that determination to gain from loss that gives the competitor a second wind.  When we're focused on losses, we get winded.  When we're focused on using struggles to better ourselves, we find our wind.  It's tough to finish a marathon race without accessing that second wind.

Further Reading:  Peak Performance Articles