Article

Developing Mental Toughness

Trading Psychology ? Learn from Tennis Champions to Develop Mental Toughness
Occasionally, we get to ‘look’ inside the mind of a great performer.  This year’s programming for the Wimbledon Tennis Championships offered such an opportunity.  What many consider the greatest tie-break in tennis history – the completion of the fourth set of the 1980 Wimbledon Men’s Final between John McEnroe and Bjorn Borg – was replayed point-by-point with both McEnroe and Borg providing commentary.  We got to see and hear what was going on in the minds of two great tennis champions.

Momentum Shift
McEnroe won the tie-break, 18-16, bringing the match to dead-even with one set left to play. Although the match was even, momentum had clearly shifted to McEnroe as he overcame Borg’s deft, expert play.

Commenting 30 years later, McEnroe said he knew the momentum had shifted.  Borg had had several match point chances during the tie-break, but couldn’t convert them.  McEnroe thought Borg was demoralized and that the Wimbledon Championship was his to take.  Borg admitted he felt down and expected to lose.  In fact, he said he was "sure of it."

A Career-Defining Experience
But McEnroe did not win.  Borg found deep within himself the will to overcome McEnroe’s momentum and won the 1980 Wimbledon Championship. John McEnroe said this loss was a significant moment in his career, but not in the way you might think.  Borg’s mental ability to dig deep within himself and not let the loss of the tie-break defeat him was eye-opening for McEnroe.  He witnessed in Borg an exceptional level of mental toughness that he, too, wanted to possess.  McEnroe was inspired to work on his mental game and soon became one of the great players in tennis.

A Lesson for Traders
How many traders become demoralized by a loss and then become entangled in their emotions?  When things looked bleak, Borg dug deep.  He didn’t feel sorry for himself or shift attention to his emotions.  Instead, he remained committed to his game and kept his focus on what mattered most ? executing the right actions.

Like tennis, trading abounds with setbacks and adversity.  Everyone makes mistakes and has losses.  It takes a certain amount of mental toughness to overcome the adversity. 

Mental toughness is about doing what needs to be done in order to trade well.  It?s taking the actions necessary to keep yourself in the trading game.  When a trader makes a mistake or suffers a loss, it often marks the beginning of a downward spiral where things quickly go from bad to worse.  Feeling pressure, more mistakes are made, and perhaps more losses are suffered.  Let?s look more carefully at how this can happen.

How Mental Chatter, Stress and Emotions Take You Out of the Trading Game
When a mistake is made or a loss suffered, the naturally tendency is to go inside and focus on what the mind is saying, on our bodily stress, and how badly we feel.  This is nearly automatic.

After a loss, for example, you might hear your mind say something like, "Another loss!  It?s the same old thing.  I?m never going to be successful in trading.  I?m a loser."  Pretty depressing, isn?t it?  How can a trader trade well when buying into such thoughts?  Believing such mental chatter takes you right out of the trading game.

Such self-talk will also tend to produce stress and unwanted emotions.  A loss is seen as a threat and causes our body to react with tight muscles, a queasy stomach, or sweaty palms.  Emotions such as anxiety and fear seem to confirm what our thinking.  But attention has shifted off the market to the trader?s internal experience.  Sound trading decisions now become difficult.

This focus on downbeat internal experiences takes the trader out of the trading game.   To trade well, focus needs to be external, concentrating on the market.  No one can trade well when their attention is on what their mind is saying and how they feel.

Three Tips for Mental Toughness
Borg modeled mental toughness well.  Rather than focusing on the tie-break he had just lost and letting defeating thoughts and emotions take center stage, he focused on what he needed to do to beat McEnroe.  By developing mental toughness, you, too, can stay focused on what matters most for your trading.

Here are three things you can do to start to develop mental toughness:

1) Be aware of what is going on in your mind, body and feelings
Slipping into an internal focus seems automatic because we aren?t fully aware of it as it is happening.  By being aware of what the mind is saying and your feelings you can catch yourself before the downward spiral gets going.

2) Know what trading actions are important to take
These are high-value actions (HVAs) under the trader?s control.  These HVAs are relevant to trading and they include identifying a sound trade setups and solid entry triggers.  You must know these cold and be committed to executing them.

3) Commit to high value actions (HVAs) regardless of how you feel
This means being willing to accept unwanted thoughts and feelings because trading well is more important than feeling good.  Maintaining an external focus and initiating positive trading actions may not be easy when feeling down, but it?s certainly not impossible.

Like all skills, mental toughness takes practice. 

Trading HVAs
Like Borg, when faced with a disheartening challenge, traders need to pull deep from within and keep attention focused on the right things.  You may be down and feel like the world is against you, but allowing those thoughts to dominate will only mar your trading.  The goal is to succeed and the only way to succeed is to execute the right actions. Traders should focus on what I call high-value actions (HVAs) – actions that are under your control and bring about effective trading.

You can never control the market and you can never control how any given trade will turn out. But, you can control your actions and apply HVAs to your trading.  Trading HVAs include: identifying the next high quality trade setup, projecting a reasonable target, assessing risk/reward, finding the entry trigger, and managing the trade.  If you focus on HVAs, you are putting yourself in the best position to make a next good trade no matter how dismayed you may feel.

HVAs and mental toughness are skill sets possessed by every successful trader.

Dr Gary Dayton can be contacted at Trading Psychology Edge

Dr. Gary Dayton is a psychologist and holds a doctorate in clinical psychology and a certificate in human performance/sport psychology from Rutgers University. He has been an active trader since 1999 and has traded equities, commodity futures, financial index e-mini futures, options and e-mini S&P futures. He applies Wyckoff, Volume Spread Analysis (VSA) and model-driven swing trading methodologies and is the “resident trading psychology coach” in TradeGuider System’s VSA Club where he conducts both educational webinars and live trading events for Club members.
Dr. Dayton, and his company Peak Psychology Inc., help traders overcome the psychological pitfalls unique to trading by the use of the Mindfulness-Acceptance-Commitment (MAC) approach to peak performance, a model of human behavior based on cutting-edge psychological research.

Mar 26, 2013
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#4
This rather goes against the more recent research which suggests that relaxing and 'leaning back' are probably a better approach to efficiency and productivity for intellectual pursuits. Another piece of recent gumpf suggests attempting to cross-utilise what works in a totally atypical enterprise is attractive for all the wrong reasons in that it can't be measured or quantified out of it's original context. Makes an empirical challenge almost impossible and the blind acceptance of its utility far more likely.

The macho 'Alpha male style approach of the 80s has rather had its day apparently and the more refined and intelligent naughties have updated our thinking. Again. Just as they did in the 80s. A seemingly never ending cycle of advice from experts none of which actually count as much as the individual finding their own way, in their own way.

Personally I'm more of a relaxed lean back type and I feel (totally deluded I'm sure) more in control that way.

A great quote from Ronald Reagan on this topic: "They say that hard work never killed anyone, but I figure, why take the chance?"
 

NVP

Well-known member
Jun 21, 2004
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#5
Good advice

Good advice but in truth it doesnt address the issue that anyone can hit a tennis ball ....its obvious ...in trading the process of understanding and finding a winning system and the processes to even step up to trade properly is where the battle is won or lost.....if you 100% understand the market then achieving HVA is easy and you can acknowledge losing trades.......thats different to picking up a Tennis racket and hitting a few balls ..........

NVP
 

NVP

Well-known member
Jun 21, 2004
35,801
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223
west sussex, UK
fxcorrelator.com
#6
just when i was going to give up after 8 years of losses i start again with vigour after reading this article
see my comments ..........you are losing because you need to understand the market first............you cant even start to address the matters in this article until you get to that point

as I say any idiot can hit a tennis ball........

N
 

DitterPD

Active member
Apr 27, 2013
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#7
This rather goes against the more recent research which suggests that relaxing and 'leaning back' are probably a better approach to efficiency and productivity for intellectual pursuits. Another piece of recent gumpf suggests attempting to cross-utilise what works in a totally atypical enterprise is attractive for all the wrong reasons in that it can't be measured or quantified out of it's original context. Makes an empirical challenge almost impossible and the blind acceptance of its utility far more likely.

The macho 'Alpha male style approach of the 80s has rather had its day apparently and the more refined and intelligent naughties have updated our thinking. Again. Just as they did in the 80s. A seemingly never ending cycle of advice from experts none of which actually count as much as the individual finding their own way, in their own way.

Personally I'm more of a relaxed lean back type and I feel (totally deluded I'm sure) more in control that way.

A great quote from Ronald Reagan on this topic: "They say that hard work never killed anyone, but I figure, why take the chance?"
Seeing how you consider yourself more laid back and calm person, may I ask you a question, if you ever try meditation as way of strengthening your mental toughness?
 
Mar 26, 2013
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#8
Seeing how you consider yourself more laid back and calm person, may I ask you a question, if you ever try meditation as way of strengthening your mental toughness?
I've never considered my mental toughness to be an issue as I'm not sure what it really means. Sounds to me more like fixedness of mind and inflexibility which isn't what I want. As for meditation, I have heard good things, but not got round to seriously considering it.
 
Mar 26, 2013
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#9
Seeing how you consider yourself more laid back and calm person, may I ask you a question, if you ever try meditation as way of strengthening your mental toughness?
I hope I didn’t come across with any sense of hubris or bravado – I meant quite the opposite. I look on in awe at the Alpha types who run the show/are the life of the party and would like in some ways to be more like that myself. My pacificity is probably more of a weakness and liability than anything on the positive side of the character balance sheet.
 
Mar 26, 2013
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#10
The mental toughness I could do with is nothing to do with handling the emotional impact (?) of losses, but staying sharp past midday. On the days that I’m trading I typically start my day around 4am UK time to catch the end of the Asian and start of middle-east sessions. In principle I’ll take trades any time up to about 4pm UK time. So it’s only 12 hours, but I find the mental or perhaps more likely the physical fatigue significant by about midday and I am aware I become less willing to take trades even when there’s no reason not to, simply to avoid having to do the fairly minor analysis effort required to construct the trade.

I’ve tried all the normal stuff to stay sharp, but it’s a problem.
 

DitterPD

Active member
Apr 27, 2013
177
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#11
I've never considered my mental toughness to be an issue as I'm not sure what it really means. Sounds to me more like fixedness of mind and inflexibility which isn't what I want. As for meditation, I have heard good things, but not got round to seriously considering it.
I was skeptical about it as well, but stumbled upon an articles how it's beneficial, studies, brains scans before and after and decided give it a try.

I'm doing it for more than a month and I can say that it's probably made me happier and calmer person. Calmer in a sense not worrying about every little detail and small fry in general.

You may give it a go and see for yourself, I'm sure you'll find it helpful at least in relaxing and unwinding you mind after intense day.
 

DitterPD

Active member
Apr 27, 2013
177
6
28
#12
The mental toughness I could do with is nothing to do with handling the emotional impact (?) of losses, but staying sharp past midday. On the days that I’m trading I typically start my day around 4am UK time to catch the end of the Asian and start of middle-east sessions. In principle I’ll take trades any time up to about 4pm UK time. So it’s only 12 hours, but I find the mental or perhaps more likely the physical fatigue significant by about midday and I am aware I become less willing to take trades even when there’s no reason not to, simply to avoid having to do the fairly minor analysis effort required to construct the trade.

I’ve tried all the normal stuff to stay sharp, but it’s a problem.
It's called willpower and you are depleting it with each conscious decision. The best way to replenish it either to take a quick nap (10-30min) or raise your glucose levels by eating something, preferably a little bit sweet.

You can do a google search on the subject by "ego depletion" or "willpower depletion" words.