All Entries Tagged With: "Attitude"
7 Steps to a Trading Breakthrough
June 8, 2011 at 11:00 am
Breakthrough was a TV mini-series which aired last summer, and a good one – at least I thought. It got cancelled after just a couple of episodes, before its time of course! (Archived on Hulu though, in case you want to see it.)
The premise of the show was that ordinary people face real, painful challenges. The subjects on the show wanted help to overcome them or learn to live with those issues. Obstacles stood in the way between them and living the life they’ve dreamed of, so it was inspiring to see them get out of their comfort zone and face them head-on.
Self-help guru Tony Robbins was the coach. Think Biggest Loser, only these people were looking to lose their fixation on their problems, and he was the one to guide them through that process. Along the way, he showed why his reputation is so good through the work he did.
Robbins offered 7 guidelines for “breaking through” and they’re listed in bold below. I’ve added my own thoughts as they pertain to trading, so here we go…
1. Change your environment. If you want to make a change, the best way to start is by getting away from the norm to not only evaluate your current approach, but to design a new one. Mix it up. Get away from your desk, go to the park, take a walk…do anything but stay in front of your screens. Similarly, if you’re not trading well or seeing the market clearly, stop doing the same things! Perhaps it’s a timeframe shift you need to make (day vs. swing), or the places you’re getting ideas. Something in your routine is stale and you need to take a fresh approach.
2. Confront your real issues. It’s SO easy to blame anything and anyone but yourself. But that’s what losers do, and none of us want to be losers. If you’ve got a discipline issue, then get real about it. Grow up. If you’re simply lacking skills, then improve them. But don’t place blame elsewhere (my family distracts me, this market is too erratic, I need that other trading platform, etc.), because that will only perpetuate your dissatisfaction. Be big enough to face up to the underlying problem, and only then will you overcome it.
3. Expand your limits. This is about discovering your inner strength in a new way. It’s about doing, not just telling yourself something. Take on a challenge that has nothing to do with trading. Skydive or climb a mountain or commit to losing 15 pounds or learn to waterski – something that you can do or achieve in a relatively short amount of time order to show yourself that when you put your mind to something, you can make it happen. It’s a step toward confidence, which will carry over into your trading. Doesn’t matter what it is, because your mind is directing each endeavor and you’re redefining what’s possible.
4. Change your perspective. I remember after my first 2 years of trading on my own I walked into a daytrading firm. I saw 2 guys that day (my age) who had made $40,000 for the day. That gave me a whole new perspective, needless to say. Whatever you think you know, you are still oblivious to so much more. Investigate some other avenues for your trading, and it will shift your mindset permanently – and probably for the better.
5. Own the lesson. Many of us pay the tuition, but we don’t always remember the lesson. In the bigger picture for your trading, this step is about taking responsibility in order to create a lasting change. You’re maturing in your approach, so take the parts of the past which can aid you and stamp them on your memory. You won’t be perfect going forward, but you’re now clear on what you need to avoid and that’s something you weren’t doing before step 2. Take the constructive pieces of the past and use them to your benefit.
6. Design a compelling future. Now that you’ve confronted your real issues and shown yourself what’s possible and you’re taking responsibility, it’s time to let go of the parts of your past which are holding you back and start looking forward. The beauty of trading (or one of them at least) is that the sky literally is the limit. Anything is possible, and yet too often we get caught in a rut and forget that. Getting away (step 1) is very helpful in this aspect, as it allows you to remember that you need not limit yourself in what it is you’re after. It doesn’t mean you start trying to hit homeruns instead of singles, but rather that you remember those singles can put you in the hall of fame!
7. Own your breakthrough. Anytime you grow, anytime you overcome an obstacle, anytime you confront what’s holding you back, it’s going to stay with you. Owning your breakthrough is about remembering where you’ve been in your trading, and building on it. You catapult yourself to a new level because of the growth you’ve experienced. Don’t forget where you’ve been, but place your focus on where you’re going. You won’t be free from frustration forever, but you’re on your way to a lasting breakthrough.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Practice Winning
May 31, 2011 at 9:57 am
In my office hanging on the wall, I have a whiteboard, a plasma TV, some handwritten wisdom my grandfather penned in 1973, artwork from my 3-year old, and a Kenny Rogers poster. A bit random, yes.
Right alongside those things, however, is a large photo of Ben Hogan’s 1-iron approach to the 18th green in the final round of the 1950 U.S. Open at Merion. It set up a 2-putt par to put Hogan in a playoff the following day, which he won for his fourth major title. It’s black and white – which is classic – just like the moment it captures.
Preparation + Confidence = Performance
When I stare at the photo, I’m most impressed by Hogan’s focus. Perhaps the first thing you notice about this famous picture is the gallery lining the entire scene. Thousands had spent their day following him, and with the finish imminent, they stood silent, awaiting the outcome. And with history on the line, Hogan hit a masterful shot – just as he had practiced countless times – as if he weren’t nervous.
But he was human – and nervous indeed. He knew what was on the line. His confidence and preparation simply suppressed the effects of his nerves, so that he could perform his craft and execute with precision the same shot he’d hit many times in solitude.
It didn’t matter that he had to make par. It didn’t matter that he had to hit arguably the hardest shot in golf – fading a 1-iron against a right-to-left wind so the ball would land softer on crusty U.S. Open greens. And it didn’t matter that he was likely exhausted from walking 72 holes on legs which had been battered so badly in a near-fatal car accident just a year prior.
What mattered to Hogan was wrapping himself up in the process, ignoring the buzz around him, forgetting (if not thriving on) the pressure he faced, and relying on his preparation – both physical and mental – in order to produce a great result with controlled emotion.
Repetition is the Mother of Skill
Whether it’s sports or music or any other craft – including trading – there’s no substitute for preparation and practice. Hitting golf balls on the driving range can produce the “muscle memory” needed to groove a golf swing. Standing in the gym and shooting free throws every day will make you better. Watching the order flow, working the charts, and making trades on a regular basis will both train your eye and develop the gut feel you need as a trader. And such things must be done by those who want to get good.
But for those who want to be great, that’s not where it stops.
Both your skills and your mental game must be improved.
When it comes to skills, you have to hone your existing skills and tighten up any loose ends. Tighten your routine, and increase your discipline with what you know. But you must also build your cache of talents. Learn to operate on other timeframes. Get better at evaluating risk, managing money, and overcoming biases. Become more efficient by learning when to add to winning trades, hop on board existing trends, identify reversals, trade news, and execute with precision. Not surprisingly, these are the same skills which are taught in the Advanced Trading Course.
Beyond those things, your mental game cannot be ignored. Visualizing literally everything and mentally rehearsing situations and emotions is another key component. Hogan practiced for repetition, but he also practiced with purpose, picturing situations where he’d need to pull off a shot under pressure or with potential distractions.
You must do the same. Make the time every day to take a break and shut everything down around you. Make a list for yourself of situations you might face in your trading, whether a string of losses or wins, or monitoring multiple positions, or the urge to trade when nothing is setting up, or feeling left behind in a market move. Take them one at a time, and imagine what you will do and how you’ll respond.
Picture yourself in control, not in a way that everything does what you want, but in such a way that you’re not feeling panic or fear or distraction from your trading process. Imagine the intensity of each situation having the opposite effect by actually increasing your focus. Starting off, it may just be a couple of minutes, but as you practice and become more skilled at visualizing, you will add more time. And you’ll be amazed what follows.
As you think about your trading, are you able to approach big situations with supreme confidence? Do you need to know more or improve your techniques or get better equipment or become mentally tougher? Then what are you waiting for?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Walk the Line
May 27, 2011 at 10:41 am
Trading is all about opportunities. Every day is filled with chances to ride a rally, short a selloff, or sit on the sidelines to protect your capital.
But there’s a very fine line to walk between having a fear or respect for what the market can take from you, and having the boldness and confidence to take a risk and get paid.
There are several keys to walking that line successfully, such as:
- Having the necessary capital to participate.
- Building and maintaining sufficient skills, methodology, and a game plan that produces consistency.
- Discipline and readiness to move swiftly when it’s time to act.
- The mental restraint not to let your mind race too far ahead.
That last bullet is arguably more important than the others (although each are necessary), so let’s dig a bit deeper into it. When I say don’t let your mind race too far ahead, I’m not referring to the productive foresight of anticipating a move – that’s fine. Rather, I’m referring to thinking habits whereby you’re focused on things which are not a present-tense reality.
These are the thoughts that have you counting on a gain before you’ve actually booked it, or fearfully racing for the exit at the first sign of your trade’s hesitation. They’re destructive and damaging thought patterns, and they aren’t “on the line” we want to be walking.
In your trading, do you allow your mind to get ahead? Are you able to stay objective? It’s an issue of self-control, and it absolutely impacts your trading results.
I’d love to give you a simple 3-step process to entirely eliminate any lack of discipline in your thought process, but the truth is it takes work. It can’t be rushed. Even your thought patterns are based upon habit.
Final word: commit to making some good decisions every day – no matter how small – knowing it’ll keep you right in the sweet spot between respecting the market and confident execution.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Consistency Over Time
March 30, 2011 at 1:19 pm
It’s been said that good trading is a marathon – not a sprint. I’ve said it too, because I agree. Overnight riches come to very few, but the truly successful usually earn it over time.
Think about it…it takes some time to learn this game, to get comfortable, to evolve to where you’re agile enough and have the discernment to switch styles or approaches when the situation calls for it. A newbie only does that out of desperation. In this game, experience pays.
Truth be told, March has been a tough month for me. I’ve been whipped out of some trades, bought some highs and sold some lows. Naturally, it has elevated my frustration level. The good news is that I’ve been here before. I’ve had those months where I have struggled, and every time I’ve been able to battle back – thankfully. This time should be no different.
I’ve looked over some trading results today, and it was a good exercise. I was reminded that there are occasional stretches where I give some back to the market. But they’re just little phases, and they’re inevitably followed by good runs – so long as I keep after it. I don’t have to make huge bets and get it all back in one trade, and I also don’t have to force trades in order to see my account back at highs. I simply need to keep a level head and persist.
Ask any distance runner, and they’ll tell you it’s all about maintaining a steady pace. The hills hurt, like losing trades, but you maintain your tempo and push through it. Cadence is important to cyclists, so they shift gears along the way in order to maintain that rhythm.
Similarly, you and I size up when we’re in the groove, just a runner takes longer strides going downhill or a cyclist shifts to high gear. When the road gets rougher or tougher on us, we scale back our size but we keep taking One Good Trade – that’s our job.
Trading at times feels like a fun run…achievement comes easy and you get the t-shirt as a bonus! At other times, it feels like an ultramarathon for which you aren’t prepared. Fortunately, we have the chance to rest along the way, and improve as we go. Attitude is key, as is taking a long-haul approach with our career as traders – even if we love short-term charts!
How are you running your race?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Walking Away
March 3, 2011 at 3:31 pm
I caught Joey Fundora’s post today called It’s Okay to Take a Break From Trading. He brings forth some excellent points, so go check it out. And while Joey primarily addresses backing away when you feel you lack an edge (rightfully so) or when going on vacation, it got me thinking about the times when trading just becomes a little too important, and perhaps even a self-imposed staycation might be warranted.
When the Scales Are Tipping…
Trading is one of those activities that can put you on top of the world, or completely bury you – if you allow it. And by “if you allow it,” I’m not referring to making or losing money. After all, every one of us will have some good trades and some bad trades – that’s not what I’m talking about. I’m talking about allowing trading to be the all-important activity in your life. If it’s sitting on that throne for you, then unfortunately, your daily satisfaction will hinge upon the color of your P&L.
That’s a really tough spot to be in. It magnifies your mood swings from day to day, and honestly, it’s not healthy. It’s no fun either. If you’re driven (as I am), the up day’s don’t carry near the weight in satisfaction as the down days tend to carry in dissatisfaction – regardless of if you’re making more than you’re losing. (Go back and re-read that sentence, because it’s a little confusing if you breeze through, but it’s of utmost importance.)
Stated otherwise, if I’m making good money on my up days and giving back only a portion of it on my down days, I’m net positive. But if I’m allowing my personal happiness to be based upon my performance today (or yesterday or tomorrow), I’m in for a world of hurt. I’m experienced, and I’ve been at this since the 90’s, so I have high expectations. Taking the aforementioned personal-satisfaction-based-upon-P&L approach, when I make money, I’m pleased but I expect to. When I lose money, I’m upset and the mood pendulum swings too far in a detrimental direction.
That’s a mistake which every one of us will at times make – but do not let it become a habit.
Work Hard & Let Go
Trading is hard. Really, truly difficult. Getting paid from your positioning takes real skill and experience, and that means you have to apply yourself to acquire those things. You don’t acquire them without true desire and hard work, which means you’re invested…with your time, your money, and often times your esteem on the line.
Just this week I had a day where I hit my peak of frustration. I didn’t smash any keyboards or scream at my computer or kick the dog, but I was running hot – and I hated it. I carried it with me, and later realized I’m giving trading too much weight. Yes, trading is what I do, and yes I have as strong of a desire to be successful at it as anyone else, but when I let a bad day bring me down the way I did, I’m giving it too much weight. Trading’s an activity, it’s not who I am. I have far too many other blessings in my life to place trading above them, but sometimes I need a reminder.
Maybe you need that reminder today as well – and here you go! Work hard with your trading, aim high, but keep it in its rightful place. As my buddy Bella says, Move On After a Trading Session. If you’re struggling to do that regularly, just walk away until you’re ready to return with a clear head and the proper perspective.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
Succeed by Not Failing
January 13, 2011 at 12:53 pm
Too many traders think a winning trade is a good trade, and a losing trade is a bad trade…a failure. I disagree.
The result of a trade is either a profit or a loss, but not a success or a failure. Good trades can end up being losses, and poor trades can sometimes result in a profit. For example, jumping in front of a big move on a whim in hopes of getting lucky timing a reversal is a poor trade, but it may still make you money. Good luck repeating that over time.
So, rather than focus on losing trades as the definition for ‘failure’ in trading, let’s take a look at 3 common ways traders fail:
To fail in trading is to not have a plan. Failing to plan is planning to fail, according to John Wooden, and he knew a thing or two about success. Great traders know what they’re doing when they go to execute an order. They have an expectation for the trade, a reason behind it, and an exit strategy which they will absolutely follow. Even beyond a per-trade basis, you should have a plan in place for your style, your goals, and when you’ll be cautious. Plan for dull phases in the market, plan for volatility, and plan which strategies you’ll employ and when.
To fail in trading is to abort your plan for something beyond your current ability. I’ve made this mistake many times, and I’ve witnessed it in others. It usually happens something like this… Consistent money has been made, confidence has grown, but greed sets in. Rather than increasing your size incrementally, you double it overnight and start adding new plays to your repertoire. Not a good combination. You lose money, you lose confidence, and now you’re unsure of what to do next. Stick with what you know. If your buddy makes a certain play look easy but you struggle with it, learn it slowly – don’t try to make your week with it on the first shot. Keep growing, but don’t rush your development.
To fail in trading is to have an inconsistent process. A good golf swing is one which repeats (doesn’t matter what it looks like — ex: Jim Furyk). If you aren’t repeating your process over time, how do you know if it really works? Suppose you focus on news today, charts tomorrow, and your favorite chat room the next day…where will your consistency come from? This also happens when you show up on Monday morning with a revised strategy, give it a day to prove itself, then move on to whatever method you think you should try next on Tuesday. It’s throwing the proverbial spaghetti against the wall to see what sticks, and that’s no way to grow as a trader. Start simple, add a little to your work load as you get more efficient, but be consistent with what you do day in and day out – at least until you can single out certain areas which need adjustment.
Avoid failure as a trader by taking action only when you have a game plan, and only when you realize the risk you’re putting on. Avoid failure as a trader by abiding by your stops, which pertains to each trade as well as your daily, weekly, or monthly loss limits. Walk away when you’re wrong, and place your ego aside. Those who fail to submit to the market are only here for a little while.
Choose to stick around…only those who stay in the game will be ready to capitalize on the best periods of opportunity when they arrive.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
When Goals Impede Progress
December 30, 2010 at 11:10 am
Like it or not, it’s that time of year where goals enter the picture again. This is of course a time for family, gifts and bowl games, but it’s also a time when each of us are compelled to take a look back and a look forward.
Reaching the finish line at the end of the year leads us to consider how things went, and most all of us know whether we exceeded or fell short of the goals we set a year ago. In turn, we evaluate where we are and take a good hard look at where we want to be a year from now.
Goals have some excellent qualities and they serve a real purpose when used correctly. They can make us think bigger and cause us to grow. They can drive us to consistently work toward an objective, helping to bring purpose to our daily activities. And goals can boost our confidence when we achieve them, helping us to realize that we’re capable of striving for higher levels. Goals are great, and I’m a goal-setter. I’ve discussed goals here numerous times over the years, but there’s one take on goals I’ve never before mentioned…
Goals aren’t always good, and they can actually hold us back when they’re set in the wrong manner or approached in the wrong way.
What Bad ‘Goals’ Look Like
As an example, years ago I would periodically update the wallpaper on my PC’s desktop with a new dream car that I’d want to go after with my trading profits. Inevitably, my trading would go almost instantly in the toilet! The new ‘goal’ was a distraction to me from what I should have had my focus on, which was the market action…not something I wanted to buy with my trading profits. (Realizing this, I’ve since kept pictures of my family as my desktop wallpaper!) My goals now involve processes I need to go through for good trading, rather than cars or destinations (duh). First things first!
3 Ways Goals Can Stunt Growth:
1. If goals are too high, we sometimes force trades in an effort to reach them. Lofty goals are good, but they can’t lead you to take on outsized risks or overstep your bounds in terms of risk. Set goals that will require growth on your part and get you outside your comfort zone, but which are still attainable for your style of trading, account size, and risk tolerance.
2. If goals aren’t practical, we may prematurely dismiss hope for achieving them. I’m not referring to quitting, I’m talking about not pushing oneself the right way. Suppose you have a profit goal for the month and you’re down to the final week and miles away from your goal. It’s easy to dismiss that goal and wait for the next month to come around, yet there’s opportunity you’d be missing out on now if you did that. Grow your account every chance possible, even if you’re lagging on a goal.
3. If goals are distracting, they don’t help us. Like the car example above, my ‘goal’ was merely an aspiration and therefore not something that directed the focus of my trading. Instead, it detracted from it, and took me farther from where I’d have been without it. Make your goals process-oriented, and the results will take care of themselves.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Are you following me on Twitter yet?
