At its core trading is a psychological endevour – you can draw all the fancy lines you want on a chart, consult your horoscope, read your tea leaves or read whatever fish and chip wrapper that passes for a newspaper. But at the end of the day, you have to take the trade, manage the trade and deal with the trade ending – all of these activities take place in the mind. Last Friday we held a session for our Boardroom members where Andrew McCombe a performance coach worked with two of our members to try and work out where some of their stumbling blocks are. What is always obvious in these sessions is that their stumbling block is not that they have the wrong moving average or that the background to their screen is the wrong colour but rather it is an internal issue that is stopping them from moving forward.
Coincidentally during the week LB and I had a zoom call with one of our other Boardroom members who could be described as being bloody good at this trading malarky but he had encountered a slight hiccup that he wanted to talk about. The reason for the hiccup was pretty easy to spot. In trading part of his system, he had drifted away from his why. The reason for his success as a trader was that he had a carefully articulated reason for trading – his why was concrete and well defined and not centred around himself. This enabled him to work backwards from this and build and more importantly maintain a system that worked for him.
Many traders think they have a why – but simply saying defining your why as to make as much money as possible doesn’t seem to work. If that worked everyone who attempted to trade or invest successfully would be more successful at it than they are. Your reason for doing something like trading which is not easy needs to have some form of resonance with your belief system it cannot just be a flippant statement of intent based around your desire to buy more stuff.
