The Australian Open Tennis Championship is now over and there is a lot we as traders can learn about trading psychology from the men?s final between Roger Federer and Andy Murray.
Federer, arguably the best player to ever have swung a tennis racquet, beat Andy Murray, the British hopeful, in three straight sets. Federer has won more grand slam titles (sixteen in total) than any other male player in the history of the sport. Despite this incredible record, Andy Murray has played Federer better than any other player on the tour. In fact, Murray has won more matches against Federer than he has lost (6-5). So, what might have contributed to this loss and what lesson can we, as traders, learn?
A Lack of Drive?
It certainly wasn?t a lack of drive or ambition. Murray has said, "I?m hungry to win one [a Grand Slam event]. I worked really, really hard to try to do it and give myself the opportunity." Everyone knows he is a very hard worker; his preparation and hard work clearly showed in his game.
Too Much Pressure?
Perhaps it was the pressure he feels to win a major tournament. Murray would be the first British man since 1936 to win ?a major,? and there is no doubt that UK fans at home and abroad want to see him win. So, the weight on Andy Murray?s shoulders is heavy and it may have contributed to his play this last weekend.
To some degree, however, he has likely been able to adjust to the pressure as this is not the first time he has felt it. The psychological pressure from public and press reached a fevered pitch last July when he played in the Wimbledon final. Many consider this London event to be the greatest of all the Grand Slam events (the others being the Australian, French and United States Opens). In fact, the Brits have named the hill alongside the Wimbledon courts: "Murray?s Mount," reflecting their sense of challenge and expectations for the young player. If ever Andy Murray was to have felt pressure, it was then.
What Really Happened?
I doubt it was either drive or pressure. Instead, I believe it was that Andy Murray simply hesitated too often in that match. You could see it fairly clearly. He had many opportunities to take the ball early and return it back to Federer and challenge his opponent to respond quicker. Murray also had numerous opportunities throughout the match to become aggressive and try for a winner, but he didn?t. Instead he hesitated. He waited for the play to slow a bit before making his move. But then it was too late. The opportunity had passed. When Murray did try to put a little extra on the ball, Federer had the time to readjust and reposition himself. Of course, Federer then won the point, and eventually the match.
Application to Trading
Many traders find it difficult to pull the trigger at the opportune time. Instead, they hear their minds say, "Just wait a little longer until it sets up better." They hesitate and have doubts. They might check another indicator – usually one they never look at – just to ?be sure.?
Once they begin listening to what their minds tell them, they are lost. Instead of focusing on the market?s action, their attention is centered on what the mind is telling them and, not surprisingly, miss the trade opportunity. Of course, once the trade goes in their anticipated direction, their mind is critical for not taking the trade!
In sport and in trading, when you have the opportunity, you take it. If you wait, you may lose. Winners always want the ball, even if they?ve missed the last three shots. Good traders, too, always want the trade.
Three Important Tips on Pulling the Trigger
You can overcome hesitancy in pulling the trigger. It is a matter of being committed to changing this unhelpful behavior and working hard at doing so with every opportunity that presents itself. Here are three tips to help you overcome hesitation in pulling the trigger in your trading:
1. Know your trade setups.
Knowing the exact criteria for your trade setups gives you little room to question whether or not they have set up. Be very specific about the criteria you want to see. You should have already researched your trades and know precisely what a choice setup looks like. Train hard to learn how your setups unfold on your charts and come into the market well-prepared, knowing not only your trade setups but also where they are likely to show up. Anticipating likely areas (e.g., support & resistance levels) where your trades will set up gives you an advantage – you are ahead of the market, and this will help curb your doubt.
2. Focus on the process of making the trade.
Once you have recognized that your trade has set up, concentrate on the process of taking the trade. Let your mind say what it will (it will anyway) but focus your attention on making the trade. You already know that the doubts your mind expresses may be poor reflections of reality. Focus on what the market (and not the mind) is telling you and take the appropriate action.
You need not try to control or suppress your thoughts in any way. You probably already know that struggling with your mind rarely bears fruit. It only takes your attention off of the trade. Keep your focus on what the market is telling you, not your mind. If you find this difficult, work to develop your focus and concentration. Mindfulness exercises can be a big help in this regard.
3. Review your trades and note your progress.
The more you see that high quality trade setups combined with proper focus leads to good trading, the more you will believe in yourself and your abilities to trade and the less you will allow other things to cause you to hesitate. Your review takes commitment and a daily routine. Working with a trade journal is the best way to analyze both your trades and your performance as a trader, and to make improvements in both.
Andy Murray stands a very good chance of winning a major event because of the hard work, desire and ability he has. He is truly a great player. As Federer said about Murray after the match, "You are too good not to win [a major]." A few minor adjustments in taking the ball early and pulling the trigger on important opportunities is likely to get him to his goal. Traders can do the same thing and apply sound trading psychology to their trading to pull the trigger on choice trade opportunities as they occur.
You can learn more about mindfulness for traders and keeping an effective trading journal – including free downloads on both – at Trading Psychology Edge