Sunday, August 06, 2006

Discipline and Devotion

No issue so pervades the trading psychology literature as that of "discipline". It is very common for traders to lay their plans and define their setups, only to find that their actions undermine their careful preparation.

A good deal of the advice dispensed by trading coaches and psychologists addresses this discipline problem.

But what if the lack of discipline is not a problem? What if we view departures from trading plans and intentions as *information*, not as weakness? As it turns out, those departures can be quite informative.

You see, we naturally gravitate toward the nexus of our values (interests), talents (native abilities), and skills (acquired competencies). On average, we tend to enjoy doing what we're good at and we tend to build skills when there is a foundation of talents to support them. The artist who spends long hours at the canvas doesn't have to draw upon "discipline" to sustain an interest in painting. The hard work is hard play: the discipline stems from a devotion to a craft--and to the ability of that craft to crystallize the artists' interests, talents, and skills.

My son Macrae labors over writing assignments in school. It takes quite a bit of discipline to get the work done. It's not where his interests, talents, and skills are conjoined. He will focus on video games, however, for hours at a time and master a new game in a single day. The action of the game story line, combined with the demand for quick response and rapid recognition, create a kind of devotion that makes discipline unnecessary.

When we veer from our market discipline, there's an important piece of information in that. Our trading style (or maybe even trading in general) is more like my son's writing than his video gaming. If we pursue a market and a trading style that truly capture our interests and exercise our talents and skills, we will be as absorbed in what we do as the artist or gamer. The lack of devotion--and our need to invoke discipline as motivation--informs us that we are not doing what we are meant to be doing.

My favorite example of this occurred when I first tried to trade on a full-time basis. I stayed in touch with other traders by IM and soon found myself spending more time interacting with them (and helping them with their trading) than following the market myself. Incredibly, I missed quite a few good trades because of the volume of my messaging.

Was my "lack of discipline" a weakness? No! It reflected my strengths. I'm a psychologist for a reason: that's where my values, talents, and skills come together. We will always gravitate toward what *means* the most to us--and many times that will take us away from the things we tell ourselves we *should* be doing. The answer is not more discipline; it's to pursue our devotion.

There's something on this Earth you're meant to do and, when you find it, you won't need discipline to make you pursue it. The greats, to paraphrase Ed Seykota, don't have talents; the talents have them. If you're veering from your path, figure out what you're heading toward. You may just find your passion.