Adam, can you please talk in one of your podcasts about mental strength when it comes to discretionary trading and how to improve it. I know it ultimately comes from conviction, backtesting and knowledge but even then it has a nature of its own. Mine has unfortunately getting weaker instead of stronger.
This podcast gives some of my answers and perspectives. We start by looking at high-level mental strength and finish with specific techniques you can apply to trading and to your development as a trader. Here are the show notes:
Improving mental strength
First question: should you improve your mental strength?
- Be careful what you wish for
- Pain exists for a reason
Where to find more info?
- Sports psychology
- Military training programs
- Elite performance of any kind
- Research paper: Grit: Perseverance and Passion for Long-term goals, Duckworth et al.
- High achievers were rarely prodigies
- Long work for 10-15 years
- Strong interest
- Desire to reach achievement
- Willingness to put in great amounts of time and effort
- “….in every field, grit may be as essential as talent to high accomplishment.”
- Emphasis is on finding your place, so study broadly as well as deep
Elements of mental strength
- Consistently = discipline = grit
- Consistency must be a habit
- Talent, desire, and passion are simply not enough
- What is your motivation?
- Remove results from sense of self
- Must have motivation and meaning outside of trading
- Trading must fit with who you are, but that’s not enough
- Learn to let go
- Sedona Method is one possibility
- Bend, don’t break
- Figure out which battles are worth fighting
- Refine your expectations
- Length of learning curve
- What does success look like?
- Embrace uncertainty
- Results can be highly variable
- What is and what is not your responsibility?
- Be careful of “trade review”
- Understand your emotional makeup
- Get in touch with physical sensations
- Manage your emotions
- Make sure you are doing the right thing
- What is your edge?
- How do you know?
- Love the markets, the process, and yourself
- Right mental and emotional state attract success
[box type=”info”] Here is the link to the book on the Sedona Method–definitely worth your time and attention and it might make a big difference in how you manage some of the emotions of trading.
Here is the link to the paper I discussed: Grit: Perseverance and Passion for Long-term Goals
If you enjoy the podcast, one of the very best things you can do for me is to leave me a review on iTunes here.
Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter.
Enjoy the show: