Friday, December 23, 2005
5 Trading Pitfalls and how to Solve Them
By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com
As a trading coach to some of the top traders in the country, I have observed that Losing money doing the right thing does not destroy a traders’ mental focus. It is when they lose money doing the wrong thing…That is what truly eats at their soul and messes with their head.
With that said, the following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.
Pitfalls
1. Focusing on the P & L
2. Losing objectivity while in a trade
3. Becoming emotional about a trade
4. Lacking confidence: exiting early, failing to put a trade on, not sizing up
5. Difficulty adapting to a changing market
Solutions
1. Quantify success base on the caliber of the trade (i.e. high quality entries/exits).
2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?”
3. While you are in a trade, ask yourself, if I had no position on right now, what would I do? Buy? Sell Short? Do nothing? Then re-evaluate your trade size and direction.
4. Confidence should always come from within. Step#1: Write bullet list of data points proving WHY you are a skilled trader. Step #2: Prime yourself each morning by reading it over to yourself. Could be the most valuable 30 seconds you spend each day.
5. Flip your perspective by keeping track of what is not working (by default this tells you what IS working).
Keep your eye on the ball and your head in the game!
-- The Head Coach
TheHeadCoach@gmail.com
As a trading coach to some of the top traders in the country, I have observed that Losing money doing the right thing does not destroy a traders’ mental focus. It is when they lose money doing the wrong thing…That is what truly eats at their soul and messes with their head.
With that said, the following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.
Pitfalls
1. Focusing on the P & L
2. Losing objectivity while in a trade
3. Becoming emotional about a trade
4. Lacking confidence: exiting early, failing to put a trade on, not sizing up
5. Difficulty adapting to a changing market
Solutions
1. Quantify success base on the caliber of the trade (i.e. high quality entries/exits).
2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?”
3. While you are in a trade, ask yourself, if I had no position on right now, what would I do? Buy? Sell Short? Do nothing? Then re-evaluate your trade size and direction.
4. Confidence should always come from within. Step#1: Write bullet list of data points proving WHY you are a skilled trader. Step #2: Prime yourself each morning by reading it over to yourself. Could be the most valuable 30 seconds you spend each day.
5. Flip your perspective by keeping track of what is not working (by default this tells you what IS working).
Keep your eye on the ball and your head in the game!
-- The Head Coach
Thursday, December 22, 2005
Setting Goals to Achieve Your Potential in 2006
By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com
Take a minute to think back about your accomplishments and progress throughout the past year. Did you achieve ALL of your goals? Did you really push yourself to set high but realistic goal standards? Did you surpass your OWN expectations of performance? Can you look in the mirror and say with conviction that you were truly A+?
This is not about comparing yourself to others, but looking deep inside and making it your mission to be better than you were yesterday. That is why I do not believe one ever really truly reaches their “full potential.” Becoming your best is and should be an ongoing journey.
The Problem
Through my observations and conversations over the past five years as a coach, I have noticed that 99% of people do a poor job of establishing goals and when they do, they fail to reflect on them on a regular basis. From an achievement perspective, if you think about, it does not seem to make much sense. After all, if setting goals is a useful exercise, then maybe we should be doing it consistently and leverage it to take our game to the next level. My purpose in this post is to challenge you to begin (if you have not already) your journey to achieving A+ in 2006.
The Solution
So what does it take to be A+?
While there are a variety of factors, goal setting is certainly at the top of the list of ingredients. Interestingly, it is something that anyone can do but remarkably few people take the time or make the effort to do it properly. Rather than spend time exploring why this is the case, here are some things you can do to increase the probability of successfully achieving your goals in 2006 and move towards A+.
* Carefully assess what your strengths and weaknesses are as a person and a trader
* Reflect on what you have accomplished in the past, what typically gets in your way, and what you have done to deal with these barriers when they appeared
* Provide yourself with a clear-cut structure and game plan
* Solicit regular feedback, from those you work with or respect, on what you are doing right and wrong
* Regularly “check in” with yourself to measure accuracy, clarity, and progress
* And most importantly, gain self-awareness and accountability by writing everything down in your journal
Remember, setting goals is about YOU. It is about helping you stay on target as you move towards reaching your potential. With this said, learn from 2005 and be more proactive in your goal-setting process as you continue to take our game to the next level in 2006.
Until next time, keep your eye on the ball and your head in the game!
-- The Head Coach
TheHeadCoach@gmail.com
Take a minute to think back about your accomplishments and progress throughout the past year. Did you achieve ALL of your goals? Did you really push yourself to set high but realistic goal standards? Did you surpass your OWN expectations of performance? Can you look in the mirror and say with conviction that you were truly A+?
This is not about comparing yourself to others, but looking deep inside and making it your mission to be better than you were yesterday. That is why I do not believe one ever really truly reaches their “full potential.” Becoming your best is and should be an ongoing journey.
The Problem
Through my observations and conversations over the past five years as a coach, I have noticed that 99% of people do a poor job of establishing goals and when they do, they fail to reflect on them on a regular basis. From an achievement perspective, if you think about, it does not seem to make much sense. After all, if setting goals is a useful exercise, then maybe we should be doing it consistently and leverage it to take our game to the next level. My purpose in this post is to challenge you to begin (if you have not already) your journey to achieving A+ in 2006.
The Solution
So what does it take to be A+?
While there are a variety of factors, goal setting is certainly at the top of the list of ingredients. Interestingly, it is something that anyone can do but remarkably few people take the time or make the effort to do it properly. Rather than spend time exploring why this is the case, here are some things you can do to increase the probability of successfully achieving your goals in 2006 and move towards A+.
* Carefully assess what your strengths and weaknesses are as a person and a trader
* Reflect on what you have accomplished in the past, what typically gets in your way, and what you have done to deal with these barriers when they appeared
* Provide yourself with a clear-cut structure and game plan
* Solicit regular feedback, from those you work with or respect, on what you are doing right and wrong
* Regularly “check in” with yourself to measure accuracy, clarity, and progress
* And most importantly, gain self-awareness and accountability by writing everything down in your journal
Remember, setting goals is about YOU. It is about helping you stay on target as you move towards reaching your potential. With this said, learn from 2005 and be more proactive in your goal-setting process as you continue to take our game to the next level in 2006.
Until next time, keep your eye on the ball and your head in the game!
-- The Head Coach
Wednesday, December 21, 2005
Daring to be Great: Trading Lessons from the "Splendid Splinter"
By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com
Inevitably as the year winds down, traders are caught in the decision of whether they should “take it easy” or step it up to “finish with a bang.” Unfortunately, I don’t have the perfect answer, but thanks to the legendary baseball player Ted Williams aka “The Splendid Splinter,” I do have some insights on how he thought about these things and as a result, how you, as a trader can think about them.
I continue to believe that "taking yourself out of the game" is not the right answer unless under specific circumstances where the mental/emotional damage caused by losing money outweighs the feelings of success you would experience by continuing to trade.
With that said, you have to ask yourself, "If I only made the highest quality of trades - how will I feel about the outcome if I make/lose money?"
In general, traders do not mind losing money (they understand it is a necessary part of the game) - what they do mind is losing money doing the "wrong" things such as being sloppy, undisciplined, etc.
You really have to know yourself and ask yourself how you are going to feel about the situation two weeks down the road, if you made great trades but lost money?....as that is a possibility.
Lesson from the “Splendid Splinter”
In 1941, Ted Williams was batting .39955 (which rounded up to .400) with 2 games left in the season. His manager, Joe Cronin, suggested Ted sit out the last two games (a double header against Philly) so he could end the season batting .400, which by the way was a remarkable feat, as all baseball minded people know.
Ted's response was "I don’t want to hit .400 that way." He refused to be benched and went 6 for 8 in the last two games, finishing his season with a .406 batting average.
The lesson for traders and the real question is....if Ted had gone 0 for 8 in the last two games and ended the season UNDER .400, would he have regretted his decision?
I think the answer is "No."
Ted had a passion for the game, strong internal confidence and was willing to accept whatever outcome may have resulted from his decision. Fact is he wanted to hit .400 but he did not want to achieve it by hiding.
Now, only you know if playing in the last two games of season is the right decision for you. Ted made the right choice for HIM but in a game as difficult as trading; sometimes sitting on the bench is the exact right thing to do. The bat is in your hands and the choice is yours to make…just be comfortable with what the consequences may be before you make that decision.
Until next time, keep your eye on the ball and your head in the game!
-- The Head Coach
TheHeadCoach@gmail.com
Inevitably as the year winds down, traders are caught in the decision of whether they should “take it easy” or step it up to “finish with a bang.” Unfortunately, I don’t have the perfect answer, but thanks to the legendary baseball player Ted Williams aka “The Splendid Splinter,” I do have some insights on how he thought about these things and as a result, how you, as a trader can think about them.
I continue to believe that "taking yourself out of the game" is not the right answer unless under specific circumstances where the mental/emotional damage caused by losing money outweighs the feelings of success you would experience by continuing to trade.
With that said, you have to ask yourself, "If I only made the highest quality of trades - how will I feel about the outcome if I make/lose money?"
In general, traders do not mind losing money (they understand it is a necessary part of the game) - what they do mind is losing money doing the "wrong" things such as being sloppy, undisciplined, etc.
You really have to know yourself and ask yourself how you are going to feel about the situation two weeks down the road, if you made great trades but lost money?....as that is a possibility.
Lesson from the “Splendid Splinter”
In 1941, Ted Williams was batting .39955 (which rounded up to .400) with 2 games left in the season. His manager, Joe Cronin, suggested Ted sit out the last two games (a double header against Philly) so he could end the season batting .400, which by the way was a remarkable feat, as all baseball minded people know.
Ted's response was "I don’t want to hit .400 that way." He refused to be benched and went 6 for 8 in the last two games, finishing his season with a .406 batting average.
The lesson for traders and the real question is....if Ted had gone 0 for 8 in the last two games and ended the season UNDER .400, would he have regretted his decision?
I think the answer is "No."
Ted had a passion for the game, strong internal confidence and was willing to accept whatever outcome may have resulted from his decision. Fact is he wanted to hit .400 but he did not want to achieve it by hiding.
Now, only you know if playing in the last two games of season is the right decision for you. Ted made the right choice for HIM but in a game as difficult as trading; sometimes sitting on the bench is the exact right thing to do. The bat is in your hands and the choice is yours to make…just be comfortable with what the consequences may be before you make that decision.
Until next time, keep your eye on the ball and your head in the game!
-- The Head Coach
