As we have recently discussed, it's quite easy to identify with, and work towards fixing problems. We have spent a lot of time within this framework. And we can concur that it does not work all that well. Spend all of your time fixing problems and you end up on the hamster wheel. Spend all of your time growing strengths, and you just might capture not just a learning curve, but an expertise curve. And that's where we want to increase our efforts! At this juncture, we have our core trading approach in place with consistent results. Now we want to work towards tweaking and honing our craft in proper fashion, with the ultimate goal of becoming a world-class market participant.
Current Problems:
Here is our list of current problems that we want to address. We are probably not alone here : )
1)
Non-engagement with the markets, afraid to trade: This can be such a subtle issue that manifests itself in a multitude of sneaky ways. Justification for non-entry can be quite easy, and also feel quite good. No risk, no chance of failure. No possibly of negative brain chemicals.
2) The step-sister of number one is
non-engagement with the markets after booking a winning trade. When observed high-odds opportunities necessitate engagement, entry is not taken due to the scarcity mindset of not wanting to lose recent gains. Positive brain chemicals are so valued, the brain is hijacked into not being interested messing with any situations that might interfere with such a positive state. Winning days not maximized.
3) The bi-polar opposite of 1 and 2 is
a compulsive bias for increased risk seeking (re-entry) after a losing trade. Literally, there is a hunger to risk-seek at the worst time -- when not seeing structure clearly. The psychology is simple: negative brain chemicals don't feel good. And a fresh trade keeps the hope alive that negative chemicals can be replaced with positive chemicals. Once again, brain chemicals are in control, hijacking the brain into giving a rat's ass about profitability, only positive chemicals. I've racked up harrowing losses more than once spinning within this vortex of doom.
4)
Lack of patience: This problem typically manifests itself via fear. The fear of missing a move versus waiting for the identified zone. It can also manifest out of boredom and a need for action.
5)
Shorting up-trending markets/trend days: There is something innate in the brain that wants to fight and be the hero. We have by and large come close to mastering this issue, but it still manifests itself frequently. And total non-engagement of up markets is really a form of this issue. Even if not actively in the market shorting, my brain is still shorting the market if not considering long positions. My brain will short down markets with ease most of the time.
6)
Poor ATR management: This problem is very obvious but can be insidious. Metrics of a basketball court never change. Same length width, and height for every game. The market's "length, width, and height" vary wildly. But my brain's natural tendency is to view the market with this bias of sameness. Unless targets are adjusted for volatility, then it is very easy to truncate winners unnecessarily. As a general example, a 5 point mechanical winner with ATR at 10, is quite different than a 5 point mechancial winner when ATR is 40. I've shot myself in the foot by taking out 5 points when my target should have been 20 points. And that really hurts performance. We want to be better at targeting the same % of the day's ATR as volatility expands and contracts.
7)
Self-loathing and negativity: This is one easy trap to fall into. It's probably a chronic issue for almost all traders in one form or another. We have come a long way. But we have so much work to do.
8)
Lack of consistent exercise and nutritional regime: Nuff said.
Strengths:
With such enormous problematic headwinds facing us, we now layout our
strengths with the goal of becoming learning machines. And to move forward with the philosophy of building these strengths so the unneeded problems simply fall away.
1) We fully embrace and understand how important it is to
embrace trading as a performance activity. We are actively working towards
extensive deliberate practice and continual performance-based learning practices as we strive to be an engine of continuous evolution. This is our primary vehicle in which to develop ourselves and move beyond problematic tendencies. Brief therapy goals set each day and graded accordingly.
2) We are
persistent,
every single one of us. Change is hard. Make that, change is very, very hard. It's constant falling down and then getting back up. But never giving up.
3) We are, as this article delineates it,
multidimensional thinkers. And this is not an easy skill to attain. We know that because it's taken us years -- and we are still working on it. Biases can be very entrenched but we have developed the ability to really know ourselves. To be the Observer.
4) A step-sister strength of number 2, we know our weaknesses. Being so able to articulate our weaknesses and problems above is a huge strength in and of itself.
5) Excellent records keeping: Daily journal, video recording, blogging, chartbook database.
So with that, we move forwards, via our strengths to gain the skills necessary to let our problem tendencies fall away.
