It’s a common thing to be frequently annoyed by the market— let’s be honest, it can irritate the hell out of us!
But what can we do about that?
Well, often the best practice is an internal shift rather than trying to change anything from the outside.
Now, I understand… that suggestion in itself can be frustrating for some — “why should ‘I’ have to change my own behavior?”; “I don’t f*****g want to do that… I just want the market to throw me a bone for once.”
I hear ya!
But I offered that suggestion because if you keep expecting anything from the market, you’re just going to be miserable. But with one simple internal shift, you can be content with any external circumstance.
This is illustrated by a metaphor from Epictetus, a famous stoic from the Roman era:
No thing great is created suddenly, any more than a bunch of grapes or a fig. If you tell me that you desire a fig, I answer you that there must be a time. Let it first blossom, then bear fruit, then ripen.
Demand not that events should happen as you wish; but wish them to happen as they do happen, and your life will be serene.
In this conception, imagine that the market represented seasonal changes and weather patterns and conditions. You, on the other hand, are the guy (or gal) wishing for a bunch of grapes (profits) when the time isn’t even right.
When you look at it this way, it’s ridiculous, isn’t it?
But we do that all the time – the market is in a particular phase, we place a couple of trades and harvest a bunch of losses.
Losses? We don’t want that. We want profits. But we can’t have that. Not at this moment. So we feel miserable.
But instead, if we can just come to the realization that certain things happen out of our control and we can either accept that reality or fight it.
This is the idea of shifting your own mindset, so that you can understand that you yourself are manufacturing the feeling of irritation. It is your opinion of the market or your trade that determines how you feel about it, not the market or the trade itself.
Let’s look at a simple yet effective practice to work on that shift.
A simple practice
Whenever you find yourself irritated by the market, first notice that your mind starts to create a story. See how your mind is lost in that story. It’s engulfed by it. It believes it. It’s about how the market always goes against your position; how it’s been handing you a string of losses lately, or why the market gods seem to be hating on you, etc.
Whatever the story is, it isn’t helpful. It makes you unhappy, it makes things worse, and above all, it makes you the kind of person you probably don’t want to be.
So drop that story. That is the practice. Instead try this:
Recognize that you don’t like the situation you’re in.
You have a proven trading system but are not happy with the outcomes you’re getting in the short-term. In this way, you are rejecting this part of reality. You are rejecting probabilities, and you are rejecting your own feelings. Consider opening up.
First, understand that it is part of probabilities that many improbable things happen. Your system, even if it’s proven to work, won’t work all the time. You must understand how your probabilities will show up and accept it as it is.
Second, work on experiencing your feelings from a place of freedom. If you can learn to manage your state of mind trade after trade, you’ve got 90% of this game. I’ve already written about that at length. Here are a few posts:
Reflect by analogy.
I find it super useful to reflect by analogy. It helps me put my thoughts and feelings into perspective. Above, we’ve seen Epictetus’ metaphor. But here’s another example: I live close to the beach and from my apartment, I have a beautiful view of the ocean. Sometimes, I just sit there and watch the waves hit the shore.
Waves are a lot like the market. They both move in a rhythmic fashion, full of highs and lows. If you’re focusing on fighting instead of going with the flow, you’re not gonna go far. Yet the typical trader spends most of his time wanting to control the waves. He feels frustrated because the waves are hitting a certain way. And he is unaware that it just brings him unhappiness to wish that the waves were different than they are.
Instead, like a surfer, why not learn to wait for the right wave and ride it as it is? Flow with it… embrace it. It’s a simple idea,. All that is needed to take advantage of that movement is a process that is devised using common sense. But we just like to complicate things, don’t we? We overthink and create problems where there aren’t.
So think about how easy trading could be if only you could pull yourself together and just execute your plan. Then do it.
Take a break.
Sometimes, taking a break is the wisest thing you can ever do. When your mind is too clouded, your judgment becomes impaired, and so is your behavior. And at this point, you’re just digging yourself a deeper hole trade after trade. Taking a break can allow you to step away from the vicious cycle of losing and feeling bad. It can help you regain perspective and refocus on what’s important.
So, do not neglect the power of a pause. Take a few days, weeks, or months off to reassess and gather perspective. Then come back again, more prepared, wiser, and stronger.
Let go the short-sighted perspective you tend to have. Don’t look at success or happy as something that will come to you when you have a winning trade, or when you’ve attained a certain accomplishment or certain amount of wealth.
Don’t look at it as a destination, something that you’ll get later. I’ve been operating that way for years, and I can tell you, it’s made my life miserable as hell. Because my wellbeing was always dependant upon something which most of the time I didn’t have any control over.
Success and happiness are available to us in every moment. It’s just a question of having a process for it and changing our perspective on things.
Focusing on the process means not letting any short-sighted concerns dictate your future expression in the market. And perspective means cultivating a sense of detachment from short-term outcomes –a.k.a noise.
This is what actually what gives you results.
Forget the money.
When you learn to let go of the need to make money, losses gradually lose their power to perturb you. On top of that, if you trade a proven system and can create no need to be right, you’ll be surprised by how fast you’ll get to engineer consistent profitability in trading.
But I get it… when you’re in a drawdown, you feel bad. It’s normal. The reason for this is because your focus tends to be on your feelings of “lack.” Instead, decide that you will focus on building qualities like perspective, vision, trust, patience, and discipline. In doing so, you will lower your expectations; you will be more open to learning, and you will trade from a more relaxed, impartial, and inquisitive state of mind.
When your emotions fluctuate like a pendulum with every trade, it means that your mind is crying for mastery. When you master trading, your confidence rests in yourself, your trading strategy, and your understanding of the market. You are automatically calmer and more serene.
So how do you develop mastery? There’s no secret, it’s repetition!
So keep trading, keep practicing, keep pushing, and keep reading blogs like this one. If you’ve noticed, there’s not much diversity in what I share. It’s the same old trading psychology posts, but for good reason — again, repetition will make things stick.