Fighting to Climb Out of a Rut

When you first start out trading, becoming a winning trader can seem impossible. Somehow you have to build up enough talent to trade markets that aren’t cooperative most of the time. When you are thrown off balance as a trader, it can be hard not to get in a rut. You might think, “Why bother trying again? I’ll just lose even more money. I want to give up.” If you aren’t careful, you can develop a “psychological complex.” Rather than look at the markets objectively, you can start placing too much emotional significance on setbacks and trading outcomes. Suddenly, routine setbacks are a big deal; each trade has more personal meaning than it should. When you make a trade, it’s as if your self-esteem and identity are on the line with your money. If you don’t do something fast, you may feel so anxious and overly emotional that you can no longer think logically. And then losses begin to mount.

In their book, “The Innergame of Trading,” Robert Koppel and Howard Abell outline a strategy for getting out of a slump and regaining your mental edge. A slump may reflect conflicts and issues that you have not yet resolved. It’s vital to identify these issues and find some resolution. Let’s review five major issues discussed by Koppel and Abell. First, make sure that you fully understand your motives for trading. Rather than trading for the money, it is important that you truly love the game. If you merely trade for the money, you will often feel disappointed by the endless setbacks you must overcome, but if you trade because you love the independence trading offers, and are stimulated by the intellectual side of trading, you will take setbacks in stride. Second, it’s also necessary to make sure that you trade with a trading style that suits your personality. Many traders make the mistake of trying to trade an approach that doesn’t suit their style. For example, they may have an overly anxious temperament yet take big risks on short-term trades that are inherently uneasy. This style of trading stresses them out to the point that they can’t enjoy trading. Instead, they vacillate between frustration and stagnation. In the end, you can only trade with the skills and resources you have available, and this may mean finding a trading style that suits you, rather than a style that is the most popular at the time. Third, trading should make you feel good. You should think it is fun. When you wake up in the morning, you should feel as if you can’t wait to trade. If it doesn’t make you feel good, you should wonder why you should even bother. And if you don’t wonder explicitly, it will gnaw at you and overpower you when you least expect it. Fourth, make sure that you acknowledge how difficult it is to learn to become a profitable trader. Don’t mistakenly think that trading is easy. It is not. It takes hard work to become a winning trader. People become upset when they forget how much time and effort is required to learn to trade. When you underestimate the difficulty of trading, you will feel frustrated when your performance does not meet your expectations. But when you remember that trading is extremely difficult, you will feel less disappointed when your hard work and effort do not always pay off. Fifth, build up a sense of confidence. You may not trade up to par at first, but it is vital that you believe that your hard work and effort will eventually pay off.

When the markets don’t cooperate with you, don’t despair. Work through personal issues that prevent you from living up to your potential. If you stay focused and cultivate a positive state of mind, you’ll recover from setbacks quickly and hone the trading skills you need to trade like a winner.

************

 

If you need further coaching and mentoring, do not hesitate to contact our office directly at +1 650 320 1714 begin_of_the_skype_highlighting              +1 650 320 1714      end_of_the_skype_highlighting begin_of_the_skype_highlighting              +1 650 320 1714      end_of_the_skype_highlighting or email us at contactus@onlinetradingcfd.com

Michael Jordan, the best athlete of all time, had a coach. If trading is your business, do you have a coach? If not, how come? Please do not hesitate to contact me - I would love to be your coach!

Also, please feel free to share my blog with anyone whom you think it might benefit.

Good luck and happy trading!

Best wishes,

Reynaldo Soriano - Your Peak Performance Trader Coach
"Helping You Achieve Your Goals"
www.onlinetradingcfd.com
Follow me on twitter: www.twitter.com/supertrader72
AUS: contactus@onlinetradingcfd.com
USA: +1 650 320 1714     

Maximizing Tendencies: When More Is Less

In the trading business, the more profits you make, the better. But mediocrity rarely leads to maximum profits. Winning traders must constantly search for novel, high probability setups. And finding these setups isn’t enough. One must also trade these setups in a peak performance mental state. A study by Dr. Sheena Iyengar at the Columbia University School of Business, however, suggests that searching for the “best” alternative may undermine feelings of satisfaction. And when you don’t feel at your best, you will have difficulty trading the markets with the proper mental edge.
When it comes to making decisions, some people are maximizers while other people are satisficers. Maximizers seek the best alternative when making a decision. They make an exhaustive search of all possibilities. Traders who are maximizers put in extra time and energy to search for the most novel and profitable trading opportunities. They want to maximize their profits, and that means searching exhaustively for all possibilities, considering them, and choosing the best option. Satisficers, in contrast, seek the decision alternative that is “good enough.” They don’t make an exhaustive search. They merely look for a potentially profitable trading opportunity and they trade it

Maximizing usually pays off, but there are disadvantages. It takes a great deal of extra psychological energy to search and consider all possibilities, depleting limited psychological resources. Maximizers also tend to compare themselves to others and tend to feel regret and depression while making decisions. In a study by Dr. Iyengar and colleagues (Iyengar, Wells, & Schwartz, 2006), for example, maximizers did better financially in terms of yearly salary as a result of their decision making strategies, but they felt worse. They tended to fixate on realized and unrealized options. There may be an advantage to reviewing all possible options when making decisions, but mulling over them too much can be a distraction, and maximizers tend to get too wrapped up in fantasizing about the potential rewards of making the “best” decision. Although maximizers were better off financially than satisficers, they were less satisfied with their decisions, and felt more pessimistic, stressed, tired, anxious, worried, overwhelmed, and depressed while making decisions. At first glance, this finding is puzzling. How could people who do financially well feel so unsatisfied? Striving for perfection has its costs. Because they search for the elusive “best” option, maximizers increase the potential for feeling regret. By thinking and re-thinking potential opportunities, they put added pressure on themselves to make the “right” decision. But no decision is perfect, so they end up feeling uncertain and unsatisfied with any decision they make.

Trading profitably in the long term requires one to maximize profits. A thorough search of all possibilities will pay off in the long run, but it can also stress you out if you are not careful. The challenge is to find the balance between finding a high probability setup on the one hand and accepting the fact that it may not be the “ultimate” setup on the other hand. If you are a maximizer, it may be useful to ease up on yourself occasionally. Tell yourself that you don’t have to be perfect. Remind yourself that you have done much more than other traders in terms of searching for a profitable trading opportunity, so you might as well feel assured that you’ve done your best. You can relax a little. After you’ve made your decision, stop deliberating and take decisive action. It’s important to just execute the trade and see what happens. In all likelihood, you’ll make the profits you are seeking.

************

 

If you need further coaching and mentoring, do not hesitate to contact our office directly at +1 650 320 1714 begin_of_the_skype_highlighting              +1 650 320 1714      end_of_the_skype_highlighting or email us at contactus@onlinetradingcfd.com

Michael Jordan, the best athlete of all time, had a coach. If trading is your business, do you have a coach? If not, how come? Please do not hesitate to contact me - I would love to be your coach!

Also, please feel free to share my blog with anyone whom you think it might benefit.

Good luck and happy trading!

Best wishes,

Reynaldo Soriano - Your Peak Performance Trader Coach
"Helping You Achieve Your Goals"
www.onlinetradingcfd.com
Follow me on twitter: www.twitter.com/supertrader72
AUS: contactus@onlinetradingcfd.com
USA: +1 650 320 1714     

The Right Place at the Right Time

Over the weekend, Tom received a call from his friend Andrew. "Hi Tom, did you take a look at Google last week?" Tom replied, "It was a rough week for my short positions. I didn't anticipate the buying surge and it hurt me a little. No, I didn't look at Google closely. I was caught up trading my own positions." Excitedly, Andrew says, "Well, on Monday I bought at 345 and sold at 370 on Friday. I made almost $4000 on that one trade alone." Have you ever received a call from a friend in the trading business bragging about a great trade that he or she made? If you aren't doing as well, and can also bask in the glory of success, it's hard to avoid feeling a little resentful, envious, and somewhat disappointed in yourself. You may think, "It's just a matter of being at the right place at the right time, and unfortunately, I was at the wrong place at the wrong time."

Trading can indeed be a matter of luck. When events aren't going your way, you can get thrown off, and become overly consumed with how poorly you are doing, that you can't think clearly. Trading the markets skillfully requires a clear, focused mindset, however. You can't get thrown off. But when your money is on the line, it's hard to think clearly. There's a powerful human need to trade with perfection. You want to be at the right place at the right time and make a huge win. One of the worst fears of many traders is missing out on a significant trading opportunity. It's natural to want to search for a once in a lifetime trade and make a year's worth of profits in a day. But constantly searching for such trades can be distracting. You spend the majority of your time searching for the ultimate trade setup, and when you do that, you start placing demands on yourself that you just can't reach. You think illogically. You lose focus, and you can no longer think clearly and astutely.

Ironically, if you become overly consumed with being at the right place at the right time, you will probably be at the wrong place at the wrong time. You won't think freely and creatively, and you will miss the potentially profitable opportunities right in front of you. From a god's eye view, they may not be the absolute best opportunities out there, but they may be good enough to profit from. If you devote all your effort to trading them, you will make profits. Remind yourself that you don't have to be perfect. You don't have to trade the best opportunities at all times. You just need to trade the best way you know how with the resources and opportunities you have available to you. You need to trade freely, rather than stagnating under the pressure to trade to perfection. Trading can be a matter of probabilities. Sometimes you'll be at the right place at the right time; at other times you won't. That's all right. If you are consumed with perfection and finding the ultimate trading opportunities, though, you will tend to put off making trades. And when you don't trade, you can't make profits. So don't limit yourself. There are many opportunities out there for you to take advantage of. The more trades you make, the more likely you will increase the odds of success, and take home profits.

************

 

NEW! Trading System Integration Workshop Will Start August 18, 2010!  Click here for more information!

If you need further coaching and mentoring, do not hesitate to contact our office directly at +1 650 320 1714 or email us at contactus@onlinetradingcfd.com

Michael Jordan, the best athlete of all time, had a coach. If trading is your business, do you have a coach? If not, how come? Please do not hesitate to contact me - I would love to be your coach!

Also, please feel free to share my blog with anyone whom you think it might benefit.

Good luck and happy trading!

Best wishes,

Reynaldo Soriano - Your Peak Performance Trader Coach
"Helping You Achieve Your Goals"
www.onlinetradingcfd.com
Follow me on twitter: www.twitter.com/supertrader72
AUS: contactus@onlinetradingcfd.com
USA: +1 650 320 1714