Decision Time

Trading is really hard… but why? Allow me to build a case for you, point by point that I think speaks to what happens to most traders, and most importantly what I think you can do to rise above this. Let’s take this one step at a time:

1) Belief systems

You are sitting on a field of belief systems. Think of these like your source code, your wiring or circuitry, or your natural known and unknown rules that you live by. They’re really like programmed ‘if-then’ statements. You’ll follow these without even knowing it’s happening. Many of these we have naturally, are very detrimental to trading financial markets. It doesn’t matter if you’re trading futures, stocks, options, or anything else.

2) The Outside

Now you have stimuli (from markets, recent events, etc.) Pretty limitless what this could be, but it’s simply something that happens either from the markets or from your trading, or heck even from your dog! Don’t overthink this one, it’s just that something happens, and you notice that it happens.

3) The Inside: Reaction/Feelings/Impulse/Idea

The stimulus event has the potential to create emotion, desire to do something… some form of reaction. What you feel, and how strongly you might feel it, depending on those underlying belief systems we started the conversation off with. For example, think of different cultures attaching masculine/feminine traits to colors. Here in the States, we see pink as very feminine, while in many parts of Asia (as I understand it) pink is in no way construed as to be tied to things feminine. We have underlying belief systems that shape how we feel about the external event or thing.

Back to trading… This event/stimulus triggers an impulse- some idea/thought/feeling/desire to do something. You might have a strong desire to exit your position, for example.

4a) Action

Most traders now go directly to taking action following the previous step. This is a mistake. This is where you over-trade, this is where you cut a winner too short, this is where you do anything we might deem “impulsive.”

Let’s look at another way.

4b) Being Better Than Most

What we now actually need, following the reaction/feeling/impulse/idea, is self-awareness or mindfulness. This way we can realize the impulse is there. We can observe the impulse, and as studies show, observing the feeling separates us from it. We can then be more of an objective observer of it, and we can explore it. We can take a look at where it comes from, what is the underlying motivation behind it. Is the strong desire to exit the small winner coming from a fear of giving back profits? Or… is the strong desire to exit coming from very important information, for your process, that the market is whispering to you (or screaming at you.)

After observing the impulse, we can direct our attention towards actual Market Generated Information (MGI). Which we can then filter that MGI through a process for trading; our methodology.

Finally, we’re ready to take proper action. You can actually take conscious control over your trading. If you can do this, you’ll rise above most. In my opinion, you don’t have a choice in this matter as a discretionary short term trader. You need to buy into this model, and you need to put in the work on what we call your Mental Framework, which we teach thoroughly in Apteros training programs. As you get “re-wired” you will be able to slip into more “in the zone” states of elite performance, just like athletes do; but what do the early stages of the athletes training look like? They look like drills and such with very much conscious control over doing the right action. Only after it’s internalized, and they have the right building blocks can they move to more subconscious higher levels of performance.

Whew, right?! It’s a mouthful, I know, but it’s important… like…. really really important.

Discipline is a Band-Aid

If you focus on discipline, you’ll forever be in a cycle of “battling” the self. Not ideal. Discipline involves that underlying belief system causing you to want something and the conscious “you” having to tell it no! That’s a battle, and discipline is a band-aid fix, not the solution.

The Answer(s)

If, however, you focus on your underlying belief systems. Now we can change what feelings actually bubble up, and how strong they grip us! There will become less and less to “battle” within ourselves as we re-shape our belief systems, which changes our feelings, which changes our thinking, which changes our actions.

If you focus on being more mindful, you can more easily observe the impulses/feelings/ideas that arise.

If you actually have a real process for observing MGI, now you can figure out if the impulse/feeling/idea is valid or not. It might be the best idea you ever had, or it might be the worse.

The fact is if you allow impulse to go straight to mindless action… you are going to have a very hard time trading with any consistency, and your results will show it.

This is a major part of what I teach people. If this speaks to you, and you’re willing to get down and dirty and do more work than clicking buy and sell buttons for fun, look into our NADRO training programs.