Be Specific: Precisely What Are You Doing Wrong?

[MrPaul]

Got this in an email today. I thought it to be insightful enough to post. Hope you get something out of it!

Be Specific: Precisely What Are You Doing Wrong?

In the trading world, the "Market Wizards" are often elevated to the status of idols. Why not? They have accomplished relatively rare feats. Consider Tom Baldwin, for example, he took what Jack Schwager called a "skimpy capital base" and turned it into a fortune. His "fearless" approach to the markets allowed him to trade aggressively. These tales of success can be inspiring, but they can also create unrealistic expectations. You may start to believe that you need to be a natural born trader to profit in the markets. But successful trading is often a matter of persistence, and it is hard to persist if you believe that trading requires special talents. It is more useful to work under the assumption that profitable trading can be learned. That's not to say that anyone can learn to trade, but if you are relatively intelligent, confident in your ability to succeed, and persist long enough, you can learn how to master the markets. It's all a matter of taking trading seriously, setting specific goals, and picking yourself up gracefully after a defeat.


Psychologists have found that many people get fed up and decide to quit when they make broad generalizations about their abilities after a setback. Rather than focus on specific deficits, they view their flaws as very general, enduring, and only about them. They think they aren't intelligent enough or they believe they don't have the right personality to trade. Although this may be somewhat true, it is not useful to think this way. It's much more adaptive to be specific about what you are doing wrong.

Consider the plight of Jack. He is upset because he lost money on a trade. At about 11:00 this morning he noticed that a stock rapidly went up $1 since the open. He bought 1,000 shares, but the price went down just as fast as it went up. He decided to cut his losses. What should Jack do at this point? First, let's consider what he shouldn't do: He should not attribute his loss to an enduring inability to trade. He should not think pessimistic thoughts like, "I'll never learn to trade profitability. I just don't have enough talent." What he should do is identify where he has specific problems with his approach to trading. For example, he did not have a detailed trading plan. In addition, he did not study the stock closely enough before trading it. By identifying specific problems, rather than making global statements about his abilities, he can make a specific plan for improving his method. He can learn to trade better. He can develop more detailed trading plans. He can study a company's stock chart more closely to get a good idea of the range that the price of the stock moves in a given timeframe. When his problems are stated specifically, they can be changed more easily.

Many people jump to the conclusion that their performance is closely linked to innate abilities. But oftentimes, the more you practice trading, the better you will become at it. Don't be afraid to identify specifically what you are doing wrong. The faster you do so, the faster you will improve, and the faster you will take home the profits you desire.

[torero]

This is very true. I think the only thing that separate the wizards and us are their high confidence in their own abilities and not letting setbacks hinder their progress and success. I think this generalizations go for many people in sports, business, science and many other areas. Many of us focus on our failures and not enough of our accomplishments to move forward (I think this is due to upbringing in our society). Getting rid of many of society's beliefs is the first step toward seeing ourselves and our potential in the markets. It's not the markets, it's us.

[MrPaul]

	Quote:	torero
	This is very true. I think the only thing that separate the wizards and us are their high confidence in their own abilities and not letting setbacks hinder their progress and success. I think this generalizations go for many people in sports, business, science and many other areas. Many of us focus on our failures and not enough of our accomplishments to move forward (I think this is due to upbringing in our society). Getting rid of many of society's beliefs is the first step toward seeing ourselves and our potential in the markets. It's not the markets, it's us.

Well said Torero,

I am constantly trying to view "failure" as an opportunity to learn something so I won't repeat it with a larger amount of money. Someone once said "you'll never again be as stupid as you are today..." I think that is insightful.

[Anna-Maria]

	Quote:	torero
	Getting rid of many of society's beliefs is the first step toward seeing ourselves and our potential in the markets. It's not the markets, it's us.

You sure got that right!

We're our own worst enemies when it comes to issues regarding success & failure.

When first entering the trading arena, most folks are scared stiff of losing, yet losing trades, if properly managed, are nothing more than business costs.

Every business attracts costs, it's a natural course of activity. Eventually, if the trader persists & gradually expands his/her skill base, not only do the 'specifics' begin to engender confidence, but the actual experiences & awareness transfer (if they're fortunate) into "an edge"

Locating your "edge" is the ultimate goal....reaching that goal requires "specific action"....both negative & positive. Trouble is, most folks are too busy worrying about not succeeding than focusing on the positives of losing.

[Soultrader]

Excellent posts! As a student of NLP failure is a common topic in this field. NLP views failure as feedback. It is simply a setback in which we need to spend the time to reflect on. It is just another step towards success if you view it in the correct way.

Over the course of my life, I have altered failure into positivity many times. This is why I truly believe nothing is impossible. Trading talent is not from birth... trading is a skill that can be learned through dedication, determination, passion, practice, and experience. Im definitely in this business for the long haul.

One other thing I hate doing is waiting. Why wait when you can just do things NOW. I spent 2 years of my life in the past relying on others and waiting for things to happen. When I finally stepped up and just did it... what a relief!

Alot of traders jump from methodology to methodology always trying to seek the Holy Grail. What they reallly need to do is to look in the mirror. All the answers lie in front of us... but some will always look elsewhere.

Best of trading.