A few years ago, I read an article about a professional swimmer and the mindset he tries to cultivate.
The article was an interview. The pro-swimmer had just competed in a major swimming championship.
He explained how he put in hours upon hours of practice and did his best during the competition, but still ended 3rd.
Now, if his only goal was to win, the outcome would have been disappointing.
But it wasn’t –there he was celebrating among his peers. (forgive me; I’m unable to remember the pro swimmer’s name)
You know why he celebrated?
Because he set a new personal record for himself –he achieved the goal of being faster than he previously was.
And that’s why he was so happy and content with himself.
Setting that PR was a great accomplishment for him, and winning the championship didn’t matter as much as that goal. (His own words, not mine)
I remember having an epiphany as I read this article because the parallel with trading is so glaring.
At that time, I understood the importance of having a growth mindset, proper trading goals, focusing on the process, having a broader, long term view on things, and all that good stuff.
Still, I had trouble letting go of the mindset geared towards short term gratification (having high expectations for my trades).
It’s something I knew I had to resolve, but I just couldn’t get myself to put an end to it.
This tendency seemed ingrained in me, seared onto my brain.
But obviously, the pro swimmer too had to learn to let go of this short term oriented mindset at some point in order to perform at the level he was performing.
So, ingrained or not, change is possible.
If you’re determined enough, you’ll make it happen.
That’s the conclusion I arrived at.
During the next few months, I worked on making that mental shift.
I focused on being flexible as opposed to being rigid.
I focused on trading well as opposed to making money.
I worked on appreciating my progress however small as opposed to feeling disgruntled at how long and rocky my journey has been and continued to be to.
I made those my trading goals.
And I monitored my mindset during, before, and after trading, making sure to cultivate ongoing stability of mind – and meditation has greatly helped in that regard.
This mindset work is not easy at all. It takes time. It takes dedication. But the results are palpable.
During this period, I broke many of my trading psychology hurdles.
This is what happens when you commit every… single… day.
You see, our brains are constantly wiring themselves –some habit patterns die off, others get formed and are reinforced… this is happening all the time, even at this very moment as I’m writing this piece and you reading it.
When you dedicate yourself, you’re essentially taking a more active role in that constant wiring that’s taking place.
You’re actively choosing which habit patterns you want to let fall by the wayside, and which ones you want to cultivate and reinforce, instead of letting this whole process just happen mindlessly, automatically.
Now, I’d like to tie this line of thinking into another one…. And it starts with a Zen story.
Practice makes Perfect ―A Zen Story
A singer was studying under a well-known but very stern teacher.
That teacher insisted that she rehearsed the same old song, day after day, month after month without being allowed to go any further.
Eventually, frustrated and fed up, the young woman ran off to pursue something else.
One day, she stumbled upon a singing contest. The contest had attracted some of the most talented people in the country.
Having nothing to lose, she entered the competition too, and, of course, sang the one song that she knew so very well.
When she had finished, her performance was highly praised and she ended up winning.
Despite the student’s embarrassed acquiescence, the organizers refused to believe that they had just heard a beginner perform.
“Tell us who your instructor is…” they said. “He must be a great master.”
The student later became a great renowned singer.
Interesting story, don’t you think?
The market too is a stern teacher. It keeps pushing us to our limits, and this can lead to a beautiful thing –mastery– even if in the short term this is not always apparent to us.
Success in trading doesn’t come right out of a box. And success is certainly not a straight line, because the market is not a straight line.
Success in trading comes from strategy, process, proper trading goals, second-order thinking, a mind that is as porous as a sponge, as flexible as bamboo, and as enduring (persistent) as a rock.
I Challenge You!
If you’re reading this blog, chances are that you already know how to trade.
But you probably don’t know how to commit your mind to the activities and practices that build you into a winning trader.
This week, I challenge you to focus on the following three trading goals:
First, make it your priority to begin and end the trading week on a positive note, regardless of win or loss.
This means that you have to shift your perspective and not focus on making money but rather on trading well.
The two meditations below will help with that:
1. Accepting Trading Losses
2. Reset Your Mind After A Winning Trade
Second, with every trade, do your best to hit those two goals:
- Proper position size
- Entry and exit according to your trading plan
You either go with your trading goals and plan devised rationally outside of market hours, or you go with your on-the-fly gut instincts.
If you go with the latter, you better make you sure you have ample market experience, or else you’re just trading off of random moods and emotions. And what you get as a consequence is random results. Please understand this.
Third, compare your performance to itself, not some arbitrary benchmark, or some dude on Twitter who’s up 2000% for the year. That’s him. Great for him. Ignore it. Focus on you! Every day. Over and over again.
Thank you for reading. I hope you reflect on this short piece and realize (as I have) the importance of process, of learning, of dedication, and proper attitude.
If you can come to realize and focus on these trading goals, you’ll inevitably turn into the profitable trader you wish to become.