In their book, “The Innergame of Trading,” Robert Koppel and Howard Abell outline a strategy for getting out of a slump and regaining your mental edge. A slump may reflect conflicts and issues that you have not yet resolved. It’s vital to identify these issues and find some resolution. Let’s review five major issues discussed by Koppel and Abell. First, make
sure that you fully understand your motives for trading. Rather than trading for the money, it is important that you truly love the game. If you merely trade for the money, you will often feel disappointed by the endless setbacks you must overcome, but if you trade because you love the independence trading offers, and are stimulated by the intellectual side of trading, you will take setbacks in stride. Second, it’s also necessary to make sure that you trade with a trading style that suits your personality. Many traders make the mistake of trying to trade an approach that doesn’t suit their style. For example, they may have an overly anxious temperament yet take big risks on short-term trades that are inherently uneasy. This style of trading stresses them out to the point that they can’t enjoy trading. Instead, they vacillate between frustration and stagnation. In the end, you can only trade with the skills and resources you have available, and this may mean finding a trading style that suits you, rather than a style that is the most popular at the time. Third, trading should make you feel good. You should think it is fun. When you wake up in the morning, you should feel as if you can’t wait to trade. If it doesn’t make you feel good, you should wonder why you should even bother. And if you don’t wonder explicitly, it will gnaw at you and overpower you when you least expect it. Fourth, make sure that you acknowledge how difficult it is to learn to become a profitable trader. Don’t mistakenly think that trading is easy. It is not. It takes hard work to become a winning trader. People become upset when they forget how much time and effort is required to! learn t o trade. When you underestimate the difficulty of trading, you will feel frustrated when your performance does not meet your expectations. But when you remember that trading is extremely difficult, you will feel less disappointed when your hard work and effort do not always pay off. Fifth, build up a sense of confidence. You may not trade up to par at first, but it is vital that you believe that your hard work and effort will eventually pay off.
When the markets don’t cooperate with you, don’t despair. Work through personal issues that prevent you from living up to your potential. If you stay focused and cultivate a positive state of mind, you’ll recover from setbacks quickly and hone the trading skills you need to trade like a winner.
Reprint from Innerworth Newsletter March 2006