Archive for July 2013
Welcome to the re-launch and renaming of my blog, The Empowered Trader – Learning to Respond to the Market, not just React. The name change is representative of not only the change in my writing but also the change in my philosophy of coaching.
Since the last regular posting I did, some 14 months ago, I’ve done a lot of soul searching figuring out what I wanted to say to you, my audience. Learning to discipline myself to regularly sit down and write was a great learning experience, but the message was not very clear and the direction was too vague.
So in creating clarity, I needed to do some soul searching to define my purpose and vision for this blog. That vision needed to represent the change in my coaching philosophy (more on this philosophical change in a moment.) The end result of all this introspection has been to take on a rather large undertaking to change the way you think about being a trader and, on a grandeur scale, change how the industry thinks about coaching traders.
The ambitious goal of changing the world comes from my history of trading and coaching. My original educator role consisted of teaching technical analysis, the basics of money management, and how to use a trading platform. That was about it. The hard part of trading, psychology, was limited to regurgitating the tired old list of trading advice axioms; don’t trade with emotions, the trend is your friend, plan your trade and trade your plan, and so on. (I’m sure you have a favorite you could add.)
In 2008 I realized that my teaching/mentoring was essentially ineffective. New traders saw great advances in their trading because of their huge learning curve, but the more experienced, having mastered a basic understanding of the fundamentals of trading, were still flat or slightly better than even in their results. Regardless of the experience level, helping trader’s with the “psychology of trading” was minimized to citing platitudes and being a supportive cheerleader.
So in January of 2009 I began a year-long search for a better way to serve my clients. That search led me to the Institute for Professional Excellence in Coaching and after 8 months and 300 hours of instruction, my certified professional coach credentials.
The coach training and subsequent years of practice have led me to the clarity of my purpose and the change in my coaching philosophy which is:
Trading is about understanding your decisions, how your decisions are influenced by your values, beliefs, and life experiences, and how these affect your trading results!
- what type of trader you want to be,
- what market you want to trade,
- what method you use,
- how much money you are willing to risk,
- what is a risky market to you,
are just the tip of the iceberg but it illustrates the depth by which trading decisions reach. Understanding what is affecting your decisions can lead to greater consistency in your trading profits.
This blog and subsequent newsletter are dedicated to demystifying the decision process so you can achieve the consistent profits you desire.
Thank you for taking a moment to read my blog. Any comments would be welcomed.
Here are the last 4 items from the series.
11. Give up your excuses. This relates back to point 3. Excuses are another way of placing the power of your decisions onto to someone or something else. Who’s making these decisions? Is someone one going to take the credit for a trade gone well? Beginning to understand your trading results starts with an honest evaluation of our decisions. These are hard decisions. If it were easy, we would have a higher success rate then 10%. Stop making excuses for your results. Use your results as information to make better decisions. They aren’t good or bad. Just information.
12. Give up the past.
13. Give up your expectations. These two concepts need to be presented together, because they are two sides of the same coin. Trading is about the present. The here and now. What happened in with the past trade is over and done. Your results are your results. They are neither good nor bad. The next trade hasn’t happened and therefore has no bearing on the present. You might reach that target and then again you might not. All that matters is what you are seeing, right now and what you are going to do about it, right now. The more focused you can be about what is happening in the present, the happier you will be with your results. This leads me to the most important give up.
14. Give up your attachment to results. Trading is not about the money. Let me repeat that: Trading is not about the money. Money is the result of our trading decisions. Money is an indicator of where we need to make improvements in our trading decisions process. If we are losing money, where are we losing? What adjustments do we need to make to loose less? If we’re profitable, what can we do to consistently be profitable? What adjustments do we need to make to enter the market at the right time? To exit at the right moment? What changes do we need to make to our perceptions, expectations, cognitive process to be happier with our decisions?
The challenge in trading is an inner challenge. That’s both good and bad news. We have the ultimate responsibility. How we handle that responsibility has more to do with our success or failure than anything else.
Continuing the conversation, here are the next 5 items on my list.
6. Give up complaining. Do you find yourself complaining about your trading? What are the results of those complaints? How are you dealing with the feeling of those complaints? Awareness of those feelings leads to acknowledging those feeling which can lead to action in dealing with those feelings.
7. Give up the luxury of criticism. Criticism of trading results are often tied to point 1 which is the need to be right. Listen, we don’t have any control over a trade once it’s in the market. Sometimes we just get it wrong. That doesn’t mean that everything you’ve worked for is flawed and needs to be revamped. We were just on the other side of the market. Stop, reevaluate your position, and move forward. Make it that simple.
8. Give up your need to impress. Who are you as a trader? Does you’re trading meet your goals and expectations? This phrase should be in front of you every time you sit at your trading screens. It does not matter what anyone else does in the market. It only matters what I do in the market. Repeat that to yourself on a daily basis. The only person you’re measuring is you. If you only get 2 ticks or 2 pips or 2 cents out of the market, you have accomplished something that 80% of the population has no idea how to do. There will always be traders that can get more. Who cares! What are you able to do?
9. Give up your resistance to change. If you think about it, this is very counter intuitive to tradeing. If nothing changes, then we don’t make any money. But as the old adage says, ” we are creatures of habit.” Once we set a pattern, we tend to want to stick with it and not make adjustments. Unfortunately, that doesn’t work in our field. Our trading methods depends upon recognizing market conditions and taking advantage of them. Trading 10 years ago, when I started is very different than it is today. If we’re resistant to change then we are resistant to our ability to take advantages in the market. Nothing is forever and that holds special truth as traders.
10. Give up on your fears. Fear is a reaction to our perceptions. Change the perception, we change the use of fear. For example, the experienced skydiver will have a different gauge for fear then the novice. Fear can be healthy and useful element in our trading, but only if we understand what it is telling us. Fear is not the issue but how we react to it.
More to come.