Lessons from the Pros

Specialty Skills

To Become an Elite Trader You Must Develop Strong Positive Habits

As this is the New Year, many of you have identified a list of resolutions that you have sworn to maintain. Yeah…and your last year’s resolutions, how did they work out for you? Now, I’m not trying to put you on the spot, it’s just that every year millions of people make lists of resolutions and are gung ho out-of-the-box for about 2 weeks…if that long. Does this sound familiar? The interesting thing is that if they actually kept their resolutions and commitments to better health, losing weight, writing a book, or putting more time into their trading these individuals would end the year way ahead of the game and will have accomplished a great deal and perhaps would have actually turned the corner becoming a better trader. But, how do you do that? How do you ensure that after you make a resolution that is in your best interest, you will stick with it? Well, the good thing is that there are ways to address this so that you can keep those commitments. The answer is to develop powerful new routines and habits around your resolutions in order to achieve those goals.

New Year Goals

One of the best ways to initiate a new habit is with a routine. Once you have established your goal(s) break down the item into tasks and objectives. For each objective make a list of what needs to be done to accomplish it. This would be your list of tasks. Prioritize those tasks with the first item on the list being the first thing that you’ll do. What you have created is a prioritized checklist which then becomes your hourly, daily, weekly and monthly routine. Routines are powerful habit formers. A routine is what you begin to do regularly, but however regularly you do it, you still must think about it because the behavior has not dropped into unconscious control. Habits are “default” patterns that you have done so many times that the behavior is controlled by the unconscious. When this happens you begin to do what is in your best interest without having to think about it!

In 1960, Dr. Maxwell Maltz wrote a ground breaking book called “Psycho-Cybernetics.” In it he described the power of the mind and ways to harness that power and establishing habits comprised a big part of that. He also stated in the book that it takes about 21 days to instill a habit. Well, it is my contention that when you want to establish a strong habit for your trading you’ll want to focus on it every day for 60 to 90 days. Let’s face it; bringing your “A” Game to the platform in order to access and activate these internal resources is of critical importance to your trading. For example, you need a clear mind supported by an appropriate blood sugar level, a hydrated body so that your internal physiological system communicates cellular information efficiently, a focused intention that comes from being centered and grounded and an emotionally stable demeanor that is connected to confidence. Additionally, you need to be aligned in body, mind, and emotions in order to ward off the conflicts that could and would enter into your system. It is important for you to form a powerful morning routine that is designed to support your “internal data” meaning your thinking, emotions and behavior; and a routine that is also designed to support your “mechanical data” that is, the market information, news, charts, and indicators. The reason you make resolutions about your trading is due to the frequency with which you experience being out-of-control and breaking trading rules, but you would go a long way to getting back in control if you created a routine and checklist that you could follow, which would after a short while habituate and set the stage for building your skill levels.

Routines create new habits and if you identify a routine for the beginning of your trading session, you will create a support mechanism for optimal ability to “see” the reality of the price action and the order flow. Below is an example of a powerful regimen that could benefit your entire system (mind, body and spirit) so that you are ready to trade.

At the beginning of your day, drink a large glass (8 – 16 ounces) of water in order to hydrate your system. Humans are about 70% water and your cells require water in order to communicate effectively and maintain electrolyte, neurotransmitter, hormone and other electro-magnetic and electro-chemical balance in your body.

Start your day with exercise. Energize your system, oxygenate your bloodstream and get the cobwebs out of your brain and body. This does not have to be strenuous and in fact it can be just 10 to 20 minutes of calisthenics and stretching. Truly, if you haven’t experienced the natural high that comes from a consistent period of first-thing-in-the-morning bodywork, then you’re in for a treat. It is a thriving and revitalizing experience that leaves you glowing and confident for the day, ready to take on the challenges that await you.

Try a meditative session to ground you in a relaxed and aligned state in order to be available, patient and focused with intention. By sitting still and focusing on your breath, you can ease any residual tension and center your system by focusing on being proactive, resolute and attentive to what matters most.

Eat a light nutritious breakfast, and drink juices and/or herbal tea to maintain focus and mental strength. Eating is very important to incorporate and maintain proper minerals, vitamins and nutrients in the bloodstream for sugar balance, and brain function. Your energy level needs to be high for prolonged and intense mental work, whether for an hour or several hours of market participation.

Review your Plan and Trading Rules to keep them fresh in your mind. Keep hard copies of them on your desk for easy reference while in the trading trenches. It is vital that you are familiar with your trading plan and rules intimately. You can’t follow a rule you have forgotten.

Go through your daily trading strategy “out loud.” This has a way of flushing out distortions. Look at the charts you are planning to use. Identify the play you are going to make, and describe the rationale with entry, target, time frame and exit. You will be surprised at how the trade “sounds,” and in fact, new perceptions of the trade may present themselves to either clarify and strengthen your confidence or shake you out of the dream that caused you to see something that wasn’t really there.

The example routine in the above is a powerful prototype for addressing both your “mechanical data” and your “internal data.” It’s not enough to prepare only for the mechanical data (the market information, the news, the charts and/or the technical data associated with the movement of price. You must also prepare your internal data (thinking, emotional stability and behavioral follow-through) if you want to have any chance of becoming an elite trader and maintaining your “A” Game on the platform. Make sure that when you turn on your computer and pull up your trading screen, you are ready and prepared to access and activate all of your internal and external resources to bear on what you are doing and this is best done by having a well formed habit to “automate” your trading. Design how you are going to trade by learning and using mental and emotional tools to consistently trade “as” a winner. In the Extended Learning Track Mastering the Mental Game, we show you how to prepare your “A” Game for the markets and to maintain and sustain it while you are trading. Also, ask your Online Trading Academy representative for more information about the Online Mastering the Mental Game Courses. And, read my book; “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading,

Dr. Woody Johnson


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.