From Innerworth
If you think you're too small to have an impact, try going to bed with a mosquito in the room.
- Anita Roddick -
How do you drive to work? Are you in a hurry to get to your destination or are you more like a Sunday driver, taking your time and enjoying the scenery? You’ve probably seen the drivers who can’t get to their destination fast enough. They erratically change lanes, cutting into any opening with the hope of beating other drivers to the next light. Why do they do it? It can’t possibly be to get to their destination sooner, since inevitably after all the lane changes, and all the potential accidents, they end up with everyone else, stuck at the toll plaza, a red stoplight, or in bumper-to-bumper traffic. Perhaps it’s the thrill of trying to beat the system that motivates them. It’s exciting to drive fast and feel you are in control. Trading can be a lot like driving. There are some drivers who like the thrills, and live under the assumption that they must find the next trading opportunity, and trade it fast, in order to reach their financial objectives. But then there are those traders who approach the markets more leisurely. They are more like Sunday drivers who assess the markets in a calm, pensive manner, nonchalantly looking for the next opportunity.
There isn’t one right way to trade. Some people like the excitement. Have you ever watched “Wall Street” or “Trading Places” and been enthralled by the depiction of the markets? Hollywood portrays the trading scene as chaotic and thrilling. Other people may prefer to approach the markets more calmly, however. Each approach may have its advantages and disadvantages. It all depends on your personality, in the end. If you are easily bored and need to get your mind charged up in order to take action, then you may prefer a high stress, energy-charged approach to trading. You may need to put pressure on yourself to get your physiology moving, which will allow you to more easily scan a ream of charts in a search for the next big winning trading setup. You might also enjoy making multiple trades to feel that you have a lot going on that demands your attention. If you are such a person, then you don’t see the pressure to perform as stressful. You see it as thrilling. You are at your best when the pressure is on.
On the other hand, you might be the kind of person who likes to take things more slowly. You might prefer to leisurely look through charts and allow your mind to wander a little as you ponder the possibilities. In the back of your mind, you are inclined think, “There’s no hurry. I will just wait patiently for an idea or opportunity to come. It will come when it does. I merely have to wait.” Ironically, traders who take it easy find as many trading opportunities and make as many profits as traders who are in a constant rush to find the next trading opportunity. Trading calmly can have advantages over high pressure trading if your mind and body prefer it.
In our achievement-oriented society, there is extreme pressure not only to succeed but to succeed immediately. There is a pervasive belief that if you push yourself hard, you will reach a dizzying level of performance. Unfortunately, for many people pushing oneself to the limits tends to do nothing more than produce stress, so much stress, in fact, that most people choke under the strain. When trading under stress, you may be prone to compulsively over-think your trading plan or to make errors by trading by the seat of your pants. It’s often more useful to plod along slowly, keeping your mind actively focused on monitoring market action and searching for opportunities, but not pushing yourself to the point that you are stressed out because you feel that you absolutely must find a trading opportunity. When you are relaxed, your mind is free to think creatively. Psychologists call this phenomenon the paradox of control. When you try to fully control a situation, you often feel so stressed out that you choke, freeze, and end up feeling powerless. If you just relax and accept trading circumstances as they arise, though, you will actually gain more control. The key is to find a middle ground between demanding goals that keep you motivated and goals that are not overwhelming to the point that you are stressed out. In other words, stress is good if you experience it in moderation.
Trading success is often a matter of trading with the proper mental edge. You must be keenly aware of market conditions, and ready to trade decisively. Ultimately, you must find the conditions that help you cultivate a winning state of mind. For some traders, a high pressure approach to trading gets them psyched up and ready to tackle the markets, but for many traders, a calmer, meditative approach to trading suits them best. Whatever you do, don’t be afraid to discover what puts you at the top of your game, and helps you take home the profits.
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