Remember when you were in middle school and had to give a presentation in front of the class?
If you’re like me, you waited until the last minute to prepare, which means there was always one thing you couldn’t get around to memorizing or researching. So you stood up there the entire time, giving your presentation and just hoping that the teacher wouldn’t ask you that one question. You knew you were completely screwed if he did, so you just prayed he didn’t.
And often, you got away with it! One of the harsh realities of trading is that habits and behaviors that can lead to success in life are horrible for trading profitability.
But you’ve probably got a memory or two of getting sniped. You stared wide-eyed, mouthing words you thought would form coherent sentences, while the class wondered whether you were going to slip into a catatonic state or just piss yourself.
Trading is like you’re giving a presentation every day, but the entire class, and the teacher, and the quantum physics PhD’s and millions of dollars in processing capacity they’ve brought in for support, are searching for that one question you didn’t prepare for.
They’re looking for that one thing you haven’t gotten around to yet. And it’s not a matter of if they find it, just when.
So how do you make sure you don’t get caught up there in front of the class with nothing to say?
One of the fastest ways to reveal to yourself something you might be avoiding is to think about the questions you hope people don’t ask you when you talk about your trading.
Think back on the last few trading conversations you’ve had. What are the topics you tried to steer clear of? What were you most nervous the other person was going to ask you about? Or when you think back about lectures you’ve attended or articles you’ve read, what are the topics that stick in your mind that you haven’t allowed yourself to dive deeper into?
Plenty of people would be afraid that someone will ask them about their PnL. I could go on a rant about how losing money isn’t always a bad thing, but let’s think a little bit bigger.
Imagine you’re sitting in front of an omniscient panel of trading gods. These immortal trading divinities can see into your mind and soul; they know every single trade you’ve made and thought you’ve had. And after looking you up and down with their really intimidating, god-like eyes, they tell you they’re going to let you into trading heaven as long as you give them a good answer to a single question.
What’s the one question you hope they don’t ask you?A thought experiment like that is just a thought experiment, and of course there’s always the possibility that the trading gods of your imagination (i.e. you) don’t have some brilliant stroke of life-changing insight for you, but you might surprise yourself with their response.
A thought experiment like that is just a thought experiment, and of course there’s always the possibility that the trading gods of your imagination (i.e. you) don’t have some brilliant stroke of life-changing insight for you, but you might surprise yourself with what they reveal to you.
And if you’re not the imagination type, start yourself off by asking yourself these questions and taking note of how you feel after each one:
- How am I calculating my stops?
- What’s the most important criteria for whether I should take a trade or not?
- What am I doing now that I should stop doing?
- Why have I chosen the trading strategy that I’ve chosen?
- How am I calculating what I’d pay for an option?
- What data am I tracking to improve my performance?
- What positive qualities do I recognize that I have that are beneficial to my trading?
Sometimes, the work we need to do isn’t technical or strategy related; if the last question on that list gives you pause, you may need to put some work into building your own confidence and self-esteem so that you aren’t grasping for it in the markets.
Whatever your process is, find a way to bring awareness to what your initial instinct is to avoid. It might not just be something that can save you money; it could also save you years of unnecessary stress after you realize what you were avoiding wasn’t that big of a deal in the first place.
Share this Post