Saturday, December 12, 2009

Thoughts for a Saturday Evening

"There can be no self-esteem without a self: a well-defined sense of who one is and what one stands for. There are many false substitutes for self-esteem, including the approval of others and the size of one's trading account. Ultimately, however, self-esteem is a function of knowing yourself and remaining true to your values: possessing a vision of what can be and remaining faithful to that vision."

The Daily Trading Coach, p. 89

"A skilled trading mentor functions very similarly to the athletic coach. The difference is that the trading mentor utilizes historical and live simulated markets--not stationary bikes or punching bags--for the realistic rehearsal of skills. Simulated trading is the market learner's equivalent of a football practice field, the body builder's equivalent of a weight room. Trying to jump from initial learning of trading skills to actual trading is like making the transition from diagramming a pass play on the blackboard to running it in a football game. Graded simulation, progression from more controlled environments to more realistic ones, fosters the internalization of skills."

Enhancing Trader Performance, p. 88

"A major implication of the ideas presented thus far is that traders who are living for their trading will have difficulty trading for a living. Since writing trading columns, I cannot begin to count the number of desperate traders who have sought me out for advice, beginning their pleas with a statement of how trading is the most important thing in their lives. I am obliged to point out to them that this may be their very problem.

If it is true that much bad trading represents a spillover of unmet needs and desires, any failure to meet those needs invites future interference. The trader who lives for his or her trading may be neglecting basic drives for security, stimulation, affection, recognition, and spirituality. These are valid and important needs, but not ones that should be driving entry and exit decisions in the stock and futures markets. Rather than neglecting these needs, it is important to find constructive outlets for them so that they will not color moods and interfere with trading decisions."

The Psychology of Trading, p. 89

"My general experience is that traders tend to set goals, but tend to be lax in structuring their work on those goals. How we pursue self-improvement is every bit as important as the ends we seek. We are most likely to internalize a positive sense of self--a sustained level of confidence and conviction--if we are generating experiences of efficacy on a daily and weekly basis."

Self-Efficacy and the Effective Coaching of Traders