Think Like A Trader Blog

Thursday, 12 January 2017

T-Model Trader Blog Post 6 in our Beginner Trader Series

Hello Traders.
Now that the holidays are over - and I hope you all had some great down time! - we can get back to the beginner blog posts.

T-Model Trader - Blog Post 6
The Journal(s)
The eminent essayist and poet Ralph Waldo Emersion once stated that in relation to his young son’s death, that he could not “hold it any closer to his heart”. He was saying that to the best of his ability, he was attempting to feel the intensity of this experience to the fullest. The key to this statement is that he was “actively engaging” in ways to find the means to feel it more so. He wanted the anguish and sorrow to not just disappear, but to penetrate as deeply as possible in order that he could allow the emotion to reach the greatest of depths. What he didn’t want was to push this emotion away and banish it from his personal experience.

As we all know, trading can trigger a vast array of emotional responses. Successful trades trigger emotions that we are all too happy to allow flood our being. We like this feeling. Losses on the other hand, would be best if the accompanying feelings could somehow disappear over the horizon.
This is where the journals are a great asset. 
Firstly, I attempt to see what took place on the chart. This is the technical journal and the practical side of trading. The questions are asked… “What did I miss”….. “Was there in retrospect, certain factors that would have tipped the balance and stopped me from entering that trade”…… “Did I miss a trade management point”….or…. “Was it a good loss and just part of the trading paradigm”? If it is a successful trade, then it is a matter of analyzing what I did correctly by asking the mirror image of those questions… “What did I see that was correct” etc. If it is a successful trade then try to emphasize this correct procedure within me.
I do this part of the journal writing these days by placing a folded piece of paper over the computer screen at the point of entry so as to block out “everything” to the right of that trade in my following morning review. On that piece of paper I have written down several questions. Although I know what unfolded after the trade entry, my attempt is to go back and relive that moment of analysis to discern my thinking, beyond what I wrote down at the actual time in the live environment.
This first set of questioning arises out from the trading plan. It is fundamentally an analytical undertaking and in a perfect world, should be without emotion involved. These responses go into my technical journal. Although I now know these questions off by heart, it is good for me to see them again and again as these questions are continually driving home some very fundamental points about trade set-ups.
The second aspect of my review writing is to probe my feelings and I do this mainly at the café and in a separate journal, so I am away from not only the computer (no trade screen) but also out of the house completely. I find this different location to be truly valuable in gaining some clean emotional air.
This is the hard part really. Like Emersion, I want to get as close to the feelings as I possibly can in this part of the journaling. Questions like… “Do I feel like a failure”…. “Am I just destined to screw this all up”…. “Why can’t I get consistency” and so on are usually on the menu. I don’t have these questions written down like the other ones, but in a similar way, they are all highly familiar and repetitive.
These emotional reactions are usually lacking in perspective and fall into a doom and gloom reality very quickly. I know that it is important for me to get inside of them, because it can feel like a thick fog and a total black out. But like all foggy mornings, a beautiful blue sky (insight) usually awaits the clearing.
If it is that I have a voice within me stating that I am a failure, then I really want to go about exploring what that actually is. In my experience, the more that I question these “self- defeating statements” usually the less impact that they have. But in order to do so, it is necessary to get as close to them as possible. So now, regarding losing trades, I go do an “Emerson” and don’t push the feelings away.
One of the great fallacies people have regarding coming to a counseling/therapy session is that someone is going to provide them with a magic formula that will instantly remove the issue at hand (Oh yes, that Holy Grail thing…again). The reality is that the closer the troubling emotion can be held within, the less impact it will have. There is that saying about “keeping your friends close and your enemies even closer”. It is the exact same thing. I try to keep those emotions related to losses as close as possible. .
I would also suggest that this aspect of the journal be written by hand. I have seen this over and over that those who write by hand seem to be able to connect with the feelings better. I can only speculate and my thought is that there is a physiological/somatic relationship in the action of handwriting, hence we all have highly unique styles. Regardless of the “why”, I know that I can express my feelings better when I hand write. When I type at the computer, my brain/mind function kicks in more so and likes to play editor. Pen on paper is non erasable. It is more primitive an action, which I believe has a greater connectivity to the emotions. It is also more non-linear, in that we can change the size of the writing easily, emphasizing certain words, writing on angles, drawing pictures and so on.

Over the last month of 2016, I literally saw my trading account go up and down repeatedly that it appeared to be jogging on the spot. Frustration was one of my great trading companions during this time.
Yet, if I step back a little, I can also acknowledge that when I have had some losses, I have also been able to rebound promptly and recoup my account. This in itself is a truly worthy point to “hold as close as I can” inside me, as I can feel the development of trading resilience taking place. Although I can be tossed about in that trading storm, I can now see that I’m able to keep my head above water and not drown. This is really important as I know I can easily fall prey to intense doubt over my ability to trade successfully.
I had read many times the need and benefits of a trading journal, yet it took me around 7 months or so to truly begin to use this medium wisely. However, I also see that this is a part of a natural evolution and now take comfort in the progression taking place.
In looking back, the first half of 2016 journal entries were indeed quite thin in expression. They were all rather lacking a depth of feeling. It was around October last year that the journal writing began to find its groove and fell into place.
I have pondered over this change that took place, as it is quite evident from the journal entries that there was a major shift. I would attempt to describe losses in the first half of last year as thou wearing a protective anti-contamination suit, trying to get in and out as quickly as possible to avoid contact with the reality taking place.
Then something changed. I became more involved with each entry. I took more time. Maybe like Emerson, I can only say in retrospect that I allowed those losses to sit within as I attempted to find the words to describe the feelings. 
A few weeks into this stage I realized something highly important. I could see that my writing volume had increased simply because I was seeing so much more on the chart. There was no Ah-ha moment as such, but just a steady accumulation of insight based upon the number of hours spent watching those candles form. With each and every trading day, I had also been participating emotionally as well and the signs of repetition were beginning to show. It was during this month that I began to realize that I had taken yet another step in an ongoing deepening of the trading experience. It is a time and interaction outcome.

The following took place about 5 years ago.
I was attending a Loss, Grief and Trauma counseling workshop/training. As part of the week long process, we would do these interactive sessions with people, who were all past clients of the workshop facilitator. They would come in, introduce themselves and briefly explain the situation that they had experienced. As a group we would take turns in creating a counseling scenario.
From the general chatter afterwards, we all thought that we were doing ok. Then the final client arrived on the last day.
She sat down and introduced herself and continued with the following….. “Several years ago I got into my car to go do some shopping, reversed out of the driveway, running over and crushing my 2 year old son to death”.
At that moment, it was like all the oxygen had been sucked out of the room as everyone struggled to breathe. There hung this silence that no one had any idea how to penetrate.
Thankfully….. the facilitator stepped in.
This session didn’t turn into a “demo” counseling, as they went on to explain how they went about working through the loss, grief and trauma.
The women then told us  the singularly most important thing that took place between them in those sessions, which also happened to be the very first thing that the facilitator had said to her. That was…… “Tell me about your son”.
What the facilitator was doing was allowing the women to hold the experience of her son as close as possible. It wasn’t about erasing. Nor about pushing the memory away, but creating a space in order to “hold as close as possible her son”, even if that memory is linked with pain. The woman stated that it was a truly profound and life changing question to be asked.
A trading loss is obviously not in this category, however it is still a loss and emotionally impactful, especially in the developing times. The closer I get to these losses the more I can disarm the emotional content that goes with it.
When I open my big thick emotional journal, it is like I hear the words asking me in a similar way…. “Tell me about the trading experience”.
The better I can get at doing this battle in my journal the less likely I will do it on the trading chart.
Till next time…

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