Wednesday, December 20, 2017

Trading Psychology Challenges - 11: Playing to Your Strengths

When I surveyed the trading success I had observed over the course of years of coaching as part of writing Trading Psychology 2.0, one conclusion jumped out at me:

Traders with distinctively good returns display distinctive strengths.  Their success is the result of leveraging unusually strong personal and cognitive competencies.

This is true of the intuitive pattern recognizer; the analytical quant; and the big picture portfolio manager.  They draw upon the best of who they are.

Traditional trading psychology focuses on reducing our vulnerabilities and eliminating our weaknesses.  That is all well and good and can be helpful.  But no amount of trimming problems will create unique success.  If a couple reduces their arguing, that's great.  It will not result in a distinctively happy, passionate relationship among soul mates.

Tuning your car when it's misfiring is great.  It will not produce a race car.

Learning from mistakes and moving from being a developing trader to being a competent one is a necessary phase of the growth process for traders.  Moving from competency to elite performance, however, is a very different process.  When we draw upon our strengths, performance become intrinsically fulfilling.  We draw energy when we exercise our competencies, and that energizes our efforts and propels us through our learning curves.  Show me someone who is not passionately learning, and I'll show you someone whose development is not aligned with their strengths.

This is the problem with many romantic relationships.  If each person does not bring out the best in the other--and if the couple fails to play to their collective strengths--then the relationship is not renewing and, at best, becomes stale.

You know when your development is on the right course, because performance *gives* you energy; it does not drain you.  If you feel chronically drained doing what you're doing, you are not on the path of  peak performance and personal fulfillment.

Sometimes trading itself is not our proper path.  I have written of how I left psychology for a time to trade full time.  I learned a good deal, made some money--and was thoroughly unhappy.  I missed working with people.  I missed being a part of their development.  What gives me energy is not participating in the next breakout, trend, or reversal; it's participating in the next breakout in a person's life.  Our best future is aligned with our greatest strengths.  We can become so focused on the dream of trading that we ignore the reality of who we truly are.

Too often, developing traders focus on their mistakes and weaknesses and never truly discover their strengths.  Day after day they write in their journals about all the things they did wrong and the long-term result is that they internalize the identities of troubled, losing traders.  This is why I have emphasized using journaling to learn from our best trades as well--as a method for reverse-engineering our successes.  What we do best in trading--and in life overall--illuminates the path of our greatest fulfillment.

If there is a formula for success, it might be this:  Be ever more consistent in being who you are when you are at your best.