eminifuturesblog
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Hi happy NY all. I've cut and paste another entry I've made on my blog which is a technique I got from a psychologist who was helping me through a draw-down period I was going through at the time. I hope it helps you.
It’s true to say that psychology or to be precise the right psychology makes up a large part of profitable trading. I’ve often read that as much as 90% of trading involves getting the right mental approach. Whatever the figure, we can be certain there’re no hard and fast rules as to how you should think. We all face our demons when we trade. Some of us are greedier than others; some are able to remain serene even in the most stressful moments. Whatever your demon or demons, we all need to find a way through to deal with these issues.
One technique I picked up in 2008 involves writing a letter to a future version of yourself. You’re writing a letter to the profitable trader you want to be. I got it from a psychologist I met in the summer while I was going through a draw-down period on my account. I was having problems replicating the success I had experienced in the first part of the year and I wanted to eradicate some of the behaviour patterns I had developed and model myself on how I was.
The letter should be written in the second-person and can be dated for any time in the future or it may have no date, the point is that it is essentially a statement of your goals, the person you want to become.
At the time one of the problems I was having was cutting my loses quickly enough. Despite risking 1% of my account on each trade in the early part of the year, a series of loses as well as a few other factors contributed to me losing the good discipline I originally had.
The letter I wrote to myself referred to the time I had lost my discipline but through a simple process of reducing my size and really focusing on the potential loss and ensuring the maximum I could expect was 1% of my account, I was putting myself on the right path. Further in the letter I compounded this positive step by referring to the fact I had managed to drop this bad habit through focusing on stopping the things I knew I shouldn’t be doing. Thus, successful, profitable trades resulted.
This isn’t a magic pill and you may be going through a lot of emotional and financial pain so it can be hard to see the wood for trees but it’s worth a try. I can’t say that by writing the letter I immediately found the right behaviours but the writing set in effect the momentum I needed. It does require you to review the letter frequently, preferably daily and to ask awkward questions of yourself.
Everything you do in your external world starts in your internal world ie. Your mind. Thinking right and putting these thoughts on paper in the form of a letter is a huge step you can make towards profitability.
Good trading all.
Tim
It’s true to say that psychology or to be precise the right psychology makes up a large part of profitable trading. I’ve often read that as much as 90% of trading involves getting the right mental approach. Whatever the figure, we can be certain there’re no hard and fast rules as to how you should think. We all face our demons when we trade. Some of us are greedier than others; some are able to remain serene even in the most stressful moments. Whatever your demon or demons, we all need to find a way through to deal with these issues.
One technique I picked up in 2008 involves writing a letter to a future version of yourself. You’re writing a letter to the profitable trader you want to be. I got it from a psychologist I met in the summer while I was going through a draw-down period on my account. I was having problems replicating the success I had experienced in the first part of the year and I wanted to eradicate some of the behaviour patterns I had developed and model myself on how I was.
The letter should be written in the second-person and can be dated for any time in the future or it may have no date, the point is that it is essentially a statement of your goals, the person you want to become.
At the time one of the problems I was having was cutting my loses quickly enough. Despite risking 1% of my account on each trade in the early part of the year, a series of loses as well as a few other factors contributed to me losing the good discipline I originally had.
The letter I wrote to myself referred to the time I had lost my discipline but through a simple process of reducing my size and really focusing on the potential loss and ensuring the maximum I could expect was 1% of my account, I was putting myself on the right path. Further in the letter I compounded this positive step by referring to the fact I had managed to drop this bad habit through focusing on stopping the things I knew I shouldn’t be doing. Thus, successful, profitable trades resulted.
This isn’t a magic pill and you may be going through a lot of emotional and financial pain so it can be hard to see the wood for trees but it’s worth a try. I can’t say that by writing the letter I immediately found the right behaviours but the writing set in effect the momentum I needed. It does require you to review the letter frequently, preferably daily and to ask awkward questions of yourself.
Everything you do in your external world starts in your internal world ie. Your mind. Thinking right and putting these thoughts on paper in the form of a letter is a huge step you can make towards profitability.
Good trading all.
Tim
