Lessons from the Pros

Specialty Skills

Train Your Mind Like You Train Your Body to Power Trade

One of the things that comes up often from books and market gurus is the notion that a trader must become a robot. Perhaps you’ve come across this adage as well. Unfortunately, it is not true nor is it possible. When you think of robots, what may come to mind is the iconic “Data” that was the anthropomorphic robot on Star Trek; and the not-so-mechanical but still robot-like “Spock” whose character was devoid of emotions. The fact of the matter is that emotions are an inextricable part of being human. Emotions cannot be taken out of the trading equation no matter how much you would like it to be so, but you can do some mental training to curb negative results.. I would submit that even if you could “trade like a robot” that is, devoid of emotions, you would not want to. If you were devoid of emotions it’s true that you would not be plagued by fear, greed, anger, anxiety, doubt or worry which are some of the main culprits that cause erratic behavior like rule violations and breaking commitments. What is also true is that you would not have the advantage of emotions like determination, inspiration, joy, passion or love which are positive emotions that actually support decisions and choices that are in your best interest.

Free Trading WorkshopThe evidence has been piling up throughout history and now neuroscientists have proven it’s true: The brain’s wiring emphatically relies on emotion over intellect in decision-making. The research has shown that about 90% of all of your decisions are based upon how you feel – not logic. Additionally, those choices and decisions directly impact follow-through and keeping rule commitments…the crux of the trade. Furthermore, those pesky adverse emotions do take a heavy toll on your trading results because they directly affect behavior in very negative ways.

Now, you can put some distance between your emotions and your trading. This can be done through mental training. The same type of training astronauts, military, special agents and world class athletes go through. They learn step-by-step protocols and practice over and over again until the sequence of steps has been assimilated into unconscious control. At that point the mental training takes over and the fear of failure, although not fully eliminated, has been systematically desensitized, meaning that the individual is able to focus with greater intention on the task at hand without the potentially overwhelming specter of fear and/or other debilitating emotions mucking up their process. In other words, they may feel a level of fear but still do what they must because the mental training has developed the capacity for emotional strength and endurance regarding the process. It is the same with your trading; mental training or developing and incorporating a strategic protocol and then practicing until it has been integrated into unconscious competence supports the trading results that you desire. Over time you will build the skill necessary to traverse the pitfalls that loom on the trading horizon. This also involves creating consistency in your approach, analysis, planning and follow-through along with consistency in your ability to remain aligned, calm, grounded and centered to develop the capacity for emotional stamina and durability in the trade.

Training yourself by doing mental and emotional push-ups is essential to building the persistence and perseverance necessary for becoming a consistently successful trader. Just like training for a marathon or other grueling physical challenge, you must remain diligent throughout the early baby steps while keeping your eyes on the purpose of it all…your BIG why. Then on into the longer strides as you expand your proficiency and strategic accuracy one trade at a time. All along the way, with each valuable mistake and failure, you will gain more and more evidence on not only what does not work, but also what does work, thereby fueling the bonfire of your resolve to take another step further and get better one trade at a time. You can do this! We take your training seriously and we are poised to help you achieve your trading goals through our “Mastering the Mental Game” online and on-location courses. Ask your Online Trading Academy representative for more information. Also, get my book, From Pain to Profit: Secrets of the Peak Performance Trader.

Happy 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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