June 23, 2006
I will clean house when Sears comes out with a riding vacuum cleaner - Roseanne Barr.
Cleaning Your Psychological House
Have you ever made trading errors because you couldnât concentrate? Perhaps out of the blue you suddenly lost confidence. The economic times we live in can shake anyoneâs confidence. Sometimes we have big rallies, like on Tuesday-Wednesday, but other times the market has been bearish. The times are uncertain. Is the economy going to change? How will people adjust to interest rate changes? How will the masses perceive the inevitable changes to come? There is an aura of uncertainty in the air, and unless you are psychologically grounded, the instability and uncertainty of the times can catch you off guard.
When you have put on a trade, itâs essential to stay focused on monitoring it. You must be able to accurately perceive the signals that indicate the market is going against you, and you must act expediently to protect yourself. That can be difficult to do during uncertain times. One reason some people get thrown off track is because they are not firmly grounded psychologically. They are prone to feel self-doubt, wavering confidence, or a lack of commitment. And when they feel this way, they have great difficulty effortlessly executing a trading plan and managing a trade. Although itâs essentially impossible to drive out all psychological conflicts from your psyche, itâs useful to try to resolve as many psychological conflicts as possible, so that they donât intrude into your consciousness, and interfere with your ability to focus on the trade.
When you have a psychological conflict, itâs in your best interest to resolve it as soon as possible; otherwise it just lies there in the back of your mind, taking up precious, limited psychological energy. By identifying psychological issues before the trading day, you can decrease the possibility of these issues catching you off guard during moments of stress. How can you cope with conflicts, uncertainty and self-doubt? Itâs hard to just push these conflicts completely out of your consciousness and pretend they donât exist. Ironically, the more you try to deny the existence of these conflicts, the more psychological energy you will waste. Rather than trying to ignore conflicts, itâs better to acknowledge and face them head on. Most of the time, the mere acknowledgement of your conflicts will produce a quick resolution.
What are some common conflicts? Every trader at one time or another questions his or her talents as a trader. Did you make a win due to luck or talent? Perhaps the win was due to a combination of both. Wavering confidence can reflect a variety of issues. For some, it is a lack of experience with the markets. Time helps build confidence. For others, a lack of confidence reflects long standing issues. A person may have always questioned his or her ability to perform well. Under times of stress and uncertainty, these issues creep up.
When the markets change as they have been during the past year, itâs natural to question oneâs abilities. You may think, âPerhaps I was a good trader at one time, but the market conditions have changed and I may not be able to live up to my expectations of trading profitably.â This perspective may be true or it may be false, but regardless of the validity, allowing such a belief to remain in the back of oneâs mind takes up psychological energy. Itâs better to acknowledge the possibility, and if it is false, remind yourself that it is absurd, or if it is true, take the necessary steps (such as learning new trading methods) to prove it wrong.
Few of us are ever completely free of conflict and doubt. Trading the markets is stressful and uncertain. The natural human response is to wonder if you can perform at your peak. Conflict and self-doubt are always there, lurking below your awareness. And when you are in a vulnerable mood, such as during times of market uncertainty, these beliefs can move from the back of your mind to the forefront in an instant. Itâs not useful to ignore these potentially distracting psychological issues. Itâs better to acknowledge them up front. Once you do, you are more likely to be able to say to yourself, âthat may be true, but it is of no consequence right now.â Then, you better spend some time during your âoff hoursâ dealing with it. Conflicts in the back of your mind can have a powerful impact on your ability to focus on your trading. Make sure that you face your conflicts, spend time examining them, and try to resolve them. If you can do so effectively, youâll be able to handle market uncertainty with grace.
If he is really not the owner, then thatâs just a cheap prank to play.
Hopefully we should soon have the entire innerworth content for all of you.
