Do You Beat Yourself Up After A Bad Trade? by Kenneth Reid I play competitive tennis at the club level, which means I’ve never made a dime at it. But I don’t care. Playing tennis well is it’s own reward. One gets the satisfaction of executing a skill, winning ‘points’ and, occasionally, a chance at a cheap trophy. But there’s an additional payoff. A close match or a fighting chance at a championship win generates a neurotransmitter called dopamine, the active ingredient in cocaine. No wonder I like to play. When we win something without a struggle, little dopamine is produced. It’s a ho hum victory both psychologically and physiologically. And if one gets trounced in a match, that’s another chemical saga altogether. Dopamine levels may actually plummet in defeat well below normal levels, leading to short-term depression. And so it is with trading. If trading is going well or even stays at a breakeven level, we will get a sufficiently large dopamine payout to feel good about our trading game and our ultimate chances of success. If, on the other hand, we suffer chronic drawdowns or a few large losses, we may become not only angry or risk averse, but also despondent. What’s the Rx for that? When psychology first came on the scene in the late 19th century it was called “Mental Hygiene.” The implication is that our own minds can become toxic. Traders need mental hygiene to protect against negativity from unavoidable losses during the steep learning curve and thereafter. Affirmations (“I am a worthy person, deserving of abundance”) are not generally sufficient to offset negative emotions, which have more than twice the psychological impact compared to pleasure. My tennis coach says: recognize your mistakes and then immediately stop the blame game and any negative self-talk. Otherwise, he says, if you carry the guilt, shame and blame with you into the next point, one mistake will lead to a cascade of errors that could cause you to lose the match. In trading, letting go of negative self-talk is probably the single most important change a person can make to improve one’s odds of success. This is a type of self-discipline you might have overlooked.
Posted on: Thu, 14 Nov 2013 00:57:20 +0000
Trending Topics
Recently Viewed Topics
© 2015