Archive for May 2012
As I’ve often said, it’s not what you use but how you use it. Your psychology, emotional state of mind and the way you feel have a greater impact on your trading results than any indicator you can put on your charts. The ability to understand your state of mind is vital to your success as a trader. To gain a handle on that understanding, there are hundreds of techniques to help you with that process. What I’d like to share with you are a couple of things that I’ve used in the past and have proven helpful for myself and clients.
This posting was inspired by an article that I saw in Psychology Today entitled Buy Sell or Hold: The Right Decision in 5 Minutes. Anything that can put me in the right frame of mind in 5 minutes is worth looking a glance. Dr. Block proposes a simple way of clearing your mind about a particular stock and therefore creating a mindset where you can make a better trading decision. Even though he talks about this technique in the context of stock market, I can see application in other financial markets.
The other technique I’d like to share is something I’ve done for years which is call Morning Pages. I learned about Morning Pages from a book by Julia Cameron called The Artist Way. Don’t let the title of the book deceive you. I have spoken about trading being more of an art form than a science. So this shouldn’t be a surprise.
Basically, Morning Pages are stream of conscious writing. How it works is you get a standard 8X11 notebook and every morning before you start your day, you write what ever pops into your mind for 3 full pages. This typically takes about 30 minutes. There is no editing of your thoughts. Grammar, spelling, punctuation do not matter. The idea is to get whatever is in your mind down on paper. Over a period of time, this exercise is designed to tap into that small voice in the back of your head that has remarkable insight into what is going on in the world.
If you would like some clarification on Morning Pages, send me an email.