I'm so frustrated in my trading. I keep making the same mistakes...
Sound familiar? Why and how to fix it...
Overtrading? Keep making the same mistakes? Aren't making the needed changes?
Unpopular opinion: You aren't hurting enough to trigger the need/motivation to change
As humans we mentally like to stay in comfort zones even when it is to our own detriment. We need to get over the mental hump of getting uncomfortable to effect the change in our lives.
For example. It’s easier to stay home and be negative than it is to go to the gym and take action.
Have you ever noticed some common features in successful people? I’ve noticed the following:
Exercise - They look healthy and look great!
Early Risers - Wake up and get more done before most people wake up and then they can go enjoy life.
Take Action - Always taking action to improve some aspect of their life. Doesn’t haven’t to be a big thing, but something.
So how do we make the changes in our trading? How do we motivate to make changes?
One way to trigger that motivation is it needs to become more uncomfortable more painful to keep doing the same thing than making the change and moving into the unknown.
Common Issues and How to Feel the PAIN MORE
Habit: If I don’t take this trade, I will miss out. However historically I have a 50/50 chance at best of the trade working. (It’s more comfortable to take the trade and lose than it is to miss the opportunity)
Feel More: This isn’t working and has cost me tens of thousands of dollars. I will NEVER reach my goals if I keep doing this.
Unknown: I don’t know if I’m going to get a A+ trade setup today, but If if I do, I’m going to bet bigger than usual and let it play out. Talk about being uncomfortable. First you might not take and trade, and when you do you are going bigger!
Habit: It’s breaking out. I got to get in. (It’s more comfortable to take the trade and lose than it is to miss the opportunity)
Feel More: I’m sick of getting faked and then paying too much and then getting stopped out and then it works later. So many break out or break downs are fakers. Why do I keep giving my hard earned money away?
Unknown: I’m going take advantage of most “break out/downs” don’t work. So let me trade the other side and risk vs the recent new high or low and I will only do this at major levels.
How to get past the pain threshold to take action
Measurement and feedback:
Facing an optimal challenge and receiving immediate feedback about progress are critical components of peak motivation. Whatever action you are taking, find a way to measure it.
Example: If making 8 trades a day, make 2. Regardless of win/lose, you nailed it! Now refine the selection process so ideally both are wins.
Recently you may have noticed I’ve added credit selling to my trading tools. Since starting it I’ve been tracking the drawdown and win rate. I’ve definitely had a few draw downs that were more than I expected, but the overall win rate stands at 23/25. That is incredible! The key lesson that has come out of it, is that from a comfort zone, I need to only take fills over $2.50 unless I am entering early morning and multiple strikes out of the money.
The Goldilocks Rule:
Humans experience peak motivation when working on tasks that are neither too difficult nor too easy, but just right for their skill level.
You don’t have to be a part of every trade and every piece of action that is out there. Find the trade setup(s), sizing, and risk management that fits your current skill level. And then work to improve it little by little.
Habit stacking:
One way to build a new habit is to identify a current habit you already do each day and create a new habit that follows the existing one, using the formula "After [CURRENT HABIT], I will [NEW HABIT]"
So for example, I am patient and place orders to scoop at a discount price. Add the new habit to place sell orders immediately after.
Environment:
In many cases, the environment matters more than motivation, and winners often win because their environment makes winning easier.
Are you working with successful traders? No? Find a group. It doesn’t have to be a live trading group. Sometimes just talking through ideas and actions with someone makes the difference in behavior.
Do you have meetings/distractions that prevent successful trading? Figure out how to change your environment. When I was working, I would create meetings with myself during key trading hours to avoid meetings or calls. I would show up to work an hour early and leave an hour later, but that would allow myself 90-120 minutes of “me time” meetings. My boss was ok with it as long as I was getting my stuff done.
Conclusion
If you aren’t improving your trading, perhaps it is time to feel the pain more. Get motivated to change what you are doing. Get uncomfortable. Get seriously comfortable with getting uncomfortable. This could take your trading from being inconsistent to consistently making thousands a day.
So, get hurting, get changing, get it done!
Be sure to like and share this post. Leave comments. Let’ me know how I can improve the content and help you become a better trader.
Atomic Habits is an excellent book and helpful in identifying those bad habits that need to get sifted out