Inspired by a recent re-read of “Trading In The Zone” by Mark Douglas and the first read of Mark Manson’s “The Subtle Art Of Not Giving A Fuck” (highly recommended), I got the idea for this article.
Funny enough, the same message can be derived from both books to boost our trading to new heights. After reading heaps of books on trading psychology, poker psychology, gambling psychology, and overall performance psychology, I can say that these two books are pretty much all you need in order to get your psychology straight. Alas, I haven’t read anything by Brett Steenbarger yet, so I might have to revise that statement later. Anyway, both books made me realize something that marked a turnaround in how I think about trading and life in general and really took my performance to the next level.
I can remember that I read something very early on in my Poker career, maybe 10 years ago, which did not make sense at all to me. It was an interview with one of the best Poker players at that time, Brian Townsend. He turned $50 into several million dollars, so many dollars in fact, that the Poker software he was playing on, could not handle the zeros and his account balance was outside of the display ;-). Anyway, that guy said that the best thing to do for improving in Poker is accepting the fact that EVERYTHING that happens to you, is YOUR responsibility. Even while playing a game of chance, if your opponent has better cards than you or lucks out on you, or you make the best play and he still ends up winning due to the probabilistic nature of the game, it is STILL your responsibility. That did not make sense to me at all, back then. And naturally, I had huge problems with both positive and negative tilt. Everything that happened at the table would make me overly euphoric, or incredibly angry because the values that I used to assess my success at the Poker table were results-based, not process-based. Now, 10 years later, I see what he was going for.
No, it is not your responsibility that the Ace of Spades hit on the river, completing your opponent’s quadzilla to beat your full house. But it is your responsibility a) to deal with it, b) how you feel about it, and c) to accept that you made the best play, but still ended up losing – and feel good about it. You need a total value shift from outcome to process, same as in trading, actually. Or as Mark Manson puts it, you need to decide what you give a fuck about. Do you want to give a fuck about the fact that the market killed your last triple-A trade within seconds, do you really want to dwell on that, instead of being happy that you executed a great trade? Do you really want to diminish your thinking capacity for future trades that can more than make up for one losing trade, because you feel treated inappropriately by the market? It is your responsibility to shift your values from result to process, easy as that. Change what you give a fuck about.
With that piece of information, let’s take a look at trading. The market provides information. That is all the market does. It does not intend to hurt you or make you feel good. Your charts, as Douglas puts it, are an “endless stream of opportunities, and we merely must make ourselves available to them”. Additionally, anything can happen, anytime. This is the second most important fact you need to accept when gambling/trading.
So here they are, the two most important statements that will transform completely how you think about trading, and if you really understand and accept them, trading will become the easiest job ever to you. Well, at least easier than before ;-).
- You are responsible for everything that happens to you (and how you deal with it)
- Anytime anything can happen
Truly accepting and understanding these concepts will free you of all pain and pressure and will make it so much easier for you to enter “the zone”, where all opportunities the market offers and your skills simply flow next to each other until they connect and create trade after trade.
Believe me, it took me years to truly understand how these two contradictory statements fit together, because if anything can happen anytime, then how can it be my responsibility? Think about it, I gave you the solution already. And also read the two books I mentioned previously, they are, as I said, the only two books you need to get your trading psychology right.
Truly understanding these concepts will not only help you with trading but also with your life. Because while we often do not have power over the circumstances that life throws at us, we can always choose how we deal with them. I urge you to think every morning when you wake up about the fact that EVERYTHING that happens to you today, is within YOUR responsibility. You will see that this is going to put you in a place of power that feels GOOD. You will be much happier, much more pro-active, and feel incredibly liberated. You are not going to be a victim of external factors any longer, you will be in control of your mind and your emotions, and ultimately, your destiny. It might even help you feel better in that cubicle job you are trying to escape so desperately, because while you might not have the means just yet to quit it, shifting how you value your life and yourself, and how many fucks you give about that job, will change a lot in your brain, and you will eventually have more energy to focus on what is truly important in life.
Hope you enjoy reading this article. Happy investing and trading pals!
Full credit to : Moritz