Trading Psychology - Ace Your Trading
Sometimes, a light will shine on trading psychology in the most unusual way...
This morning, I mentioned to my wife that today is my sister's birthday.
That threw her into a minor panic.
We had forgotten! No gift, no card.
Rather than focusing on the things she planned to accomplish, a good part of the morning was spent figuring out a gift, getting it, making arrangements to have it sent, etc.
At the end of all this, my wife asked me, "When is your mother's birthday?" "That's months away, why?" I asked.
"Because we are going to ACE this," she replied.
ACE? Intrigued, I began to learn about the ACE process.
You see, my wife works for one of the largest corporations on the planet, and ACE - Achieving Competitive Excellence - is their continuous improvement operating system.
It works incredibly well and can be easily adapted to trading.
A fundamental idea of ACE is to have an uneventful day.
Eventful days are to be avoided.
Events cause disruption to the normal day and workflow.
They divert your attention, create stress, and keep you from getting your tasks done.
Events create crises.
This is why my wife asked for my mother's birth date.
When an event occurs, you should figure out how not to have that event again.
You make a plan.
It's the process of continuous learning and improvement.
You learn from the event so that you can avoid the same event from recurring the next time.
Very smart thinking.
Traders can adopt ACE thinking and improve their trading process.
One simple ACE action traders can do is to have a plan when coming into the market.
A daily plan gives you a framework to help understand the next day's market action.
You lay out the market structure the night before and watch how the market trades around that structure the next day.
Even if the market does something different, your plan gives you a reference.
If the market trades differently from what you think it would, that itself can be significant.
Not having a plan is a sure way to cause 'events' in your trading.
Wondering, for example, where weekly support is located in the middle of trading is a sure way to cause an event.
You can easily imagine how not being prepared can wreck havoc on your trading: diverted attention, increased stress, erratic trading behavior, trading errors, lost profits, lost capital.
Of course, even with a plan, you will still have events from time to time.
When an event occurs, think through how not to have that event again in the future.
Then, take whatever steps are needed to put your correction in place.
Often, the corrective action will become part of your daily plan or your overall trading plan.
This is continuous improvement in action, and it leads to better trading.
So, ACE your trading! Avoid events by being prepared with a daily plan and take corrective action for those events that do occur.
It helps you keep your trading and your trading psychology on an even keel.
This morning, I mentioned to my wife that today is my sister's birthday.
That threw her into a minor panic.
We had forgotten! No gift, no card.
Rather than focusing on the things she planned to accomplish, a good part of the morning was spent figuring out a gift, getting it, making arrangements to have it sent, etc.
At the end of all this, my wife asked me, "When is your mother's birthday?" "That's months away, why?" I asked.
"Because we are going to ACE this," she replied.
ACE? Intrigued, I began to learn about the ACE process.
You see, my wife works for one of the largest corporations on the planet, and ACE - Achieving Competitive Excellence - is their continuous improvement operating system.
It works incredibly well and can be easily adapted to trading.
A fundamental idea of ACE is to have an uneventful day.
Eventful days are to be avoided.
Events cause disruption to the normal day and workflow.
They divert your attention, create stress, and keep you from getting your tasks done.
Events create crises.
This is why my wife asked for my mother's birth date.
When an event occurs, you should figure out how not to have that event again.
You make a plan.
It's the process of continuous learning and improvement.
You learn from the event so that you can avoid the same event from recurring the next time.
Very smart thinking.
Traders can adopt ACE thinking and improve their trading process.
One simple ACE action traders can do is to have a plan when coming into the market.
A daily plan gives you a framework to help understand the next day's market action.
You lay out the market structure the night before and watch how the market trades around that structure the next day.
Even if the market does something different, your plan gives you a reference.
If the market trades differently from what you think it would, that itself can be significant.
Not having a plan is a sure way to cause 'events' in your trading.
Wondering, for example, where weekly support is located in the middle of trading is a sure way to cause an event.
You can easily imagine how not being prepared can wreck havoc on your trading: diverted attention, increased stress, erratic trading behavior, trading errors, lost profits, lost capital.
Of course, even with a plan, you will still have events from time to time.
When an event occurs, think through how not to have that event again in the future.
Then, take whatever steps are needed to put your correction in place.
Often, the corrective action will become part of your daily plan or your overall trading plan.
This is continuous improvement in action, and it leads to better trading.
So, ACE your trading! Avoid events by being prepared with a daily plan and take corrective action for those events that do occur.
It helps you keep your trading and your trading psychology on an even keel.
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