Give Credit Where Credit’s Due

Trading Issues? Give Yourself Credit from Netpicks on Vimeo.

Many times it’s all too easy for us to become wrapped up in what we aren’t doing well or more specifically, what we’re doing wrong. Naturally, if a trader is losing money they will look for reasons why and although identifying problems has a role to play in creating sustainable solutions, the other side of the coin could be just as important. Identifying what you’re doing well and when you’re doing it, can be a huge turning point in a trader’s career.

At The Simplest Level

For many traders, performance is only measured on dollars gained versus dollars lost. By focusing on what type of trade is actually making you money or at the very least what’s working the best, you’ll give yourself the opportunity to improve your performance overall. Cutting out the poorly performing strategies is a great start. But once you start to look at it in a little more detail, you might just find that it’s errors that are holding you back anyway. Once you see the real impact of negative behaviors, it’s easier to make a concerted effort to mitigate them.

A Good Coach   

Was your best high school coach one who only told you what you were doing wrong or was it one who also praised you for the things you did well? Did the good coach help you to see your strengths and highlight your progress? Motivation isn’t about just turning up – it’s about concentrating efforts to effect an outcome that we want and having the belief that we can get there. As thick-skinned as I’m sure some people are, negativity and setbacks can take their toll on a trader’s motivation. On the other hand, demonstrable skills and successes (however small they may be) can help to galvanize a trader on the road to consistent trading.

A Balanced Individual    

Of course, effective self-analysis has to be a balance between identifying weak areas to deal with and highlighting strengths to build upon. But there are a couple of important things to consider here before I get back to the subject of emotions. First of all, things that you’re good at are likely to be easier to improve with a little work, whereas in addressing your weaknesses, although there’s likely to be more room to improve, it will require an overhaul in what you currently do and this is frequently more difficult to achieve. On top of this, recognizing why you’re doing particular things well can help you to spot patterns and behaviors to template in order to create an effective plan to change the things you’re not doing especially well.

Fuel To The Fire

We are genetically pre- programmed to want to be good at something. It really boils down to survival and procreation. From birth we are measured on performance and pitted against other people on virtually every arena imaginable. Trading is just the same. You tend to see a number of people on the internet who either directly claim to be successful traders or at the very least set out to make you assume that they are. Even though we all know that trading is an industry where so many fail, people are usually drawn to those who are perceived to be successful in their own hunger to find success. In this way, failure (or at least the absence of success) cuts deeply to the core for many.

When you’re always trying to improve your trading solely on the basis of targeting your weaknesses and “stopping doing this” or “being better at that”, there’s a good chance that you’re setting yourself up to fail. By constantly seeing yourself not achieve perfection and therefore fail at making the change, you’re likely to really discourage yourself. Consistently repeating the same mistakes doesn’t feel great and in the end it’s more than likely to lead to giving up on something. It leads to poor self-image and a belief that you can’t achieve the success that you have such a strong desire for. Experience of these consistent failures only adds to your doubt and fear. Of course it’s inevitable that you’ll be wrong or make mistakes and this is especially true as you’re learning.

The Snowball Of Belief

If you start to focus on the things that you do well and give yourself credit where credit’s due, you’ll slowly start to see a change in attitudes and find the belief that you can achieve your goals. Seeing the things you do well can give you the strength to withstand setbacks and the reality that there might be a particular thing that you’re not really great at. Over time, improving performance little by little can add up to dramatic results and you’ll find that most problems can be overcome with the right approach and attitude. Just as concentrating on weaknesses can fuel negative beliefs and discourage you, concentrating on strengths can support positive beliefs about your own ability and motivate you.

Finally, There’s Always A But…   

HOWEVER, you must be objective when identifying your strengths. If you aren’t being objective and you misinterpret a strength, then you will be likely to become extremely upset with yourself and discouraged when you see the strength is really not present. You’ll beat yourself up for doing something that lost you money and then you’ll beat yourself up about thinking you’re good at something when you really aren’t.

Have patience, stay positive and things will progress.

 

Trade well.

 

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Coach James

James began his trading career nearly a decade ago, learning his craft in fixed income derivatives. These days, he predominantly day trades index futures using auction context as the vital ingredient to his approach. James is a firm believer in the importance of trader psychology and how it can make such a monumental difference to how well a trader performs.

Comments

comments

One Response to “Give Credit Where Credit’s Due”

  1. Michael Freeman

    Thanks for putting this post out there- keep them going ;)

    Reply

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