Lessons from the Pros

Specialty Skills

The Power of Curiosity in your Trading

I’ve often discussed the power of emotions and how they impact directly and immeasurably upon what you do.  In fact, emotions drive your behavior.  Consider just about every rule violation you’ve ever come upon; whether moving a stop, chasing a trade or whatever misguided deed that puts you and your account at greater risk of catastrophic loss.  When you think about it, aren’t fear, anxiety, greed, doubt, worry, anger or any other of the many strong negatively charged emotions at play just before you engage in that rule violation?  You felt the fear before you moved the stop; you felt the greed before you chased the trade; or you felt the doubt before you exited the trade prematurely.  Actually, emotions, just like thoughts are energy.   If you were hooked up to a fMRI, a functional neuroimaging procedure using MRI technology that measures brain activity by detecting changes associated with blood flow, the technicians would be looking at colored pictures of emotions, thoughts and other brain functions in real time.  So, a big part of the trading process is emotional management or “energy management”.

Free Trading WorkshopEmotional or energy management is crucial to your ability to focus on the important matters, plan your trades, trade your plan, follow your rules and keep your commitments.  There are many who would tell you that you should trade like a robot; that is, without emotions to avoid being unduly influenced by fear and greed.  Well if that were possible, it is true that you’d avoid feelings of fear, greed or any of the other negative emotions that drive unwanted bad behaviors, but it’s also true that you would be void of positive powerful emotions like determination, inspiration, joy, love and curiosity. These emotions greatly support decision making and, therefore, behaviors in the right direction just as fear, greed and the like take you in the wrong direction. The research is clear that emotions, not rational thought, to a large degree governs decision making.  Many would argue that logic is what determines how and what they decide; but when you make a choice of which way to go on just about anything, the final determinant is how you feel.  That said, if you could take emotions out of the trading equation, which of course you can’t, yes you would avoid those pesky emotions like fear and greed, but as well you would not have the advantage of those wonderful emotions that all-to-often assist you in making the right decision.

Let’s look a little closer at curiosity; one of the more potent positive emotions.  I would argue that next to love, joy and happiness, curiosity will serve you longer and in more situations.  Additionally, the satisfaction of curiosity will add greatly to your joy and happiness.   One of the other maxims of the Universe as we now know it is the ubiquity of information or intelligence or data.  Data are at the quantum and classical levels of physics; from the sharing of information as in cellular communication throughout the body and brain to actions like photosynthesis (the conversion of light energy into chemical energy used as fuel by vegetation and other organisms).  In other words, information and data are at the heart of everything…and that includes trading.

So, if you are curious enough you will be able to tolerate the discomfort of both physical pain and emotional turmoil associated with fear, anxiety, greed, anger and the like.  With curiosity you will yearn to see what happens if you allow the plan to implement as written, thereby increasing the information, the data.  Through curiosity you will be open to the scientific method or trial and error to learn how various indicators and/or moving averages along with other analysis instruments like Bollinger Bands® or the Keltner Channel would work.  As you create consistency in cultivating and using curiosity you will develop the capacity for greater emotional strength and endurance to sit with the discomfort in whatever form and remain there for the sake of achieving your highest and best goals.  Once that happens you truly are on your way to becoming a highly successful and consistently successful trader.

Developing and using curiosity is a way to learn more as you are intent upon finding out the “why” something will or won’t work.  If you are learning more about both the trading process and yourself you will put yourself in a position to do more as you are increasing your capacity to perform at ever higher levels of effectiveness and efficiency.  In other words, you become more productive.  Furthermore, it follows that if your productivity is increasing and you are more effective overall then you are also in a position to “be” more.  So, it is safe to say that you are expanding not only as a trader but as a human being.  You are no longer held hostage by the “tyranny of certainty;” that is, the phenomenon that takes place when an individual only has a hammer and everything looks like a nail, or when someone has a restricted number of alternatives that seem plausible then they are necessarily closed-off and limited in the ways that they can respond to that situation…they then have become tyrannized by the certainty of what to do. They have lost their ability to be flexible given that set of circumstances in that instance.  They are doing the same thing over and over and expecting a different result!  This is what we teach in “Mastering the Mental Game” online and on-location and courses.  Ask your Online Trading Academy representative for more information.  Also, get my book, From Pain to Profit: Secrets of the Peak Performance Trader.

Joyful Trading,

Dr. Woody Johnson – wjohnson@tradingacademy.com

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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