Wednesday, September 30, 2020

Why You're Having Trouble Getting To The Next Level Of Trading Success

In the last blog post, I described how I think about markets and trade successfully.  When I follow that framework, I generally do well.  When I attempt to view and trade markets in other ways, I rarely succeed.

The most recent Forbes article is important, because it emphasizes the role of self-management in our success.  Each of us is our own manager, whether we embrace that role actively or neglect it.  Many problems in our trading come from mismanaging ourselves.

This is a very, very important concept.

The starting point of any good relationship is acceptance.  How can we be close to someone; how can we be supportive of them; how can we truly understand and appreciate them if we don't accept them?  

There is an important difference between expanding our trading edges and failing to accept ourselves and our strengths as traders.  Expanding your edge means finding new and different ways of doing the things that already make you successful.  That means applying your strengths--what you do distinctively well--in new ways:  new markets, new market conditions, etc.

Many times we tell ourselves that we're expanding our edge when, in reality, we are trying to be someone and something we are not.  When we make large changes in our holding periods or strategies, we often require ourselves to process information in radically different ways and take on very different levels of risk.  We get away from what we do well and that dilutes our results.  It does not expand us in the least.

We have trouble getting to the next level of trading success because we haven't taken the time to fully identify, appreciate, and embrace our trading strengths.  Perfectionism can be deadly:  it tells us we're not good enough as we are.  An important theme in the Forbes article is that the quality of our performance depends upon the quality of the relationship we have with ourselves.  If we're not good enough as we are, will we ever be able to make the most of what we have?  Can we manage ourselves and our trading well if our relationship with ourselves lacks acceptance?