Tuesday, May 29, 2007

The Most Important Step in Becoming Your Own Trading Coach

Before you read this post, I'm going to ask that you review my previous post on "The Devon Principle". It is very, very relevant to a question recently asked of me by a trader: "I know I can't afford to hire a private trading coach. What do I need to do to coach myself for success?"

The Devon Principle states that we are what we eat and that, psychologically, we are always digesting our experience. Internalizing our experience makes us who we are.

If we have negative experiences, we internalize that and develop a loss of confidence and motivation. If we have positive experiences, these become part of our outlook on ourselves and our world.

To mentor yourself, your most important step is to create positive learning experiences that will sustain your motivation, interest, and sense of efficacy.

Every trading session should involve working on a specific, doable goal and making progress toward that goal.

We can't control how markets move, so we can't control whether any single trade we make will be profitable or not. But we can control how we make trades: how we enter, how we size positions, how we exit, and how we contain losses. Having rules about all of those helps us set specific goals about the process of trading, rather than about the outcome.

The goal of your learning is to trade well, just as the goal of a pitcher is to make a good pitch. If you do that often enough, you'll win your share of outings.

But the equally important reason for setting attainable, concrete goals is that--as your own coach--you are creating the experiences that you'll be digesting. By setting yourself up for success, you build a positive identity as a trader, day by day.

Without goals, there can be no sense of attainment. Without the sense of attainment, there can't be an internalization of competence and confidence. You generate your own sense of control by--trading session by trading session--controlling your own pursuit of trading goals.


Becoming Your Own Trading Coach

Letting Profits Run: Becoming Your Own Coach