Think Like A Trader Blog

Thursday, 29 June 2017

T-Model Trader Blog Post 16 - Short Circuited

Hello Traders.
T-Model Trader is back with his 16th blog post for Decisive Trading. 
James Orr

DT Blog 16
Short circuited                           

I was about to write… “What an interesting few weeks it has been regarding trading”, when it occurred to me that I can recall writing…. “What an interesting time it has been lately regarding trading” just about every time I sit to write one of these blogs.
Maybe it is time to get the thesaurus out for new words that expand upon “interesting”. Or maybe trading is just one of those things that continually throw up new and interesting experiences.
Anyway… has been an interesting time since the last blog.
I was planning on continuing with some thoughts in and around the interview with James. However, as I had this “interesting” experience of late, I thought to share this and will get back to the Q&A next time.
For the sake of explanation, let’s call one aspect the “conceptual realm” and the other the “practical realm”. I am sure that you will all have had these experiences where a mental concept, which is easily understood, eventually finds itself demonstrating in the physical. What was the conceptual mental understanding eventually shows up in reality and the words “Oh that is what it meant”, seems to find expression.
Whilst mentally pondering the concept it all seems clear and easy with many a thought of….Oh yes I will know when it happens….I am aware of it…..and so on. And then lo and behold, like all those parental warnings that fluttered out the window as one day you just have to stick your finger in the fire to truly make sure that it does indeed burn.
So… this last month and a bit, I discovered what “over trading” actually and really truly is.
From a conceptual perspective it is pretty damn easy to put those two words into a form of meaning. From a physical perspective thou, I had a disconnect to that concept until I actually fell into a state of over trading in the real time real world reality. Maybe it is just me, but it does seem that we humans need to truly “do” some things in order to truly “get” it.
I had mentioned my development of the daytime ASX trading in past blogs. This I had been doing, which meant that I had a morning start on this market and then a late afternoon start with the Ftse. For a month or so, this was fine and I enjoyed the split trading sessions. Then slowly a sense of fatigue started to build up without me being aware of it happening at the time.
About 4 weeks ago, I began to do my morning ASX set up and felt a sense of lethargy regarding doing so. I could feel that my efforts regarding market analysis were lacking, but continued on regardless. Then the next day came along and I felt the same. Several more days followed as such.
When I sat the following week, I could feel my whole being wanting to rebel against doing this, but yet again I hadn’t realized at the time what was happening. Then that feeling seemed to show up as well in the Ftse session later in the day.
Normally I really enjoy setting up the zones for the day’s trading and getting ready for market open time. This was different as there was a sluggishness to my approach and a sense of feeling bothered by the whole thing.
Then poor trade selection started to creep in. Impatience started to return again. And then the losses started to mount in proportion to overall trade successes. Mmm…something is happening here.
Finally, the bubble popped when I looked at the charts and just couldn’t do it. I didn’t want to set up the zones and didn’t want to even think about the trading day ahead. It wasn’t that I decided to have a break, but more so that I was at a point of being forced to do so, simply because my entire being was rebelling against the process.
It probably took another painful week to realize that I had been in a state of trading saturation. The conceptual “over trading” had become actualized. I was cooked…..totally!

Over the last few weeks I have lessened my chart time considerably. I have changed my approach and mainly just trade the Ftse in the evening. Although I keep an eye on the ASX, any trading of this market is now on higher/longer time frames, so my screen time is drastically reduced. I now feel that I have regained my enjoyment again and that sense of “space” that I mentioned in the last blog has returned.
What I find interesting about all this is understanding that fine line between the notion of a “concept” of something and the often large wide gulf that stands separated in the world of practical realities.
I keep thinking about the concept of over training in regards to athletes and sports as there comes a point of diminishing returns. That is what happened, as the more I engaged in the process, I was inadvertently pushing it all away.
Having had this experience of late has added yet another layer of insight to my trading development. I feel I understand how important it is to have that sense of equanimity regarding the whole trading process, as it is so easy to fall into that belief that more is better.
Again, it is interesting to note, that within me is this compulsion that says I must always be looking at a chart if it is that I truly want to succeed as a trader. It is thou, the insight of these last few months that I have come to see how I make trading way harder and more complex than it has to be.
It is this last concept that I want to expand upon in the next blog as it was something that James stated in the Q&A that got me thinking deeply about this aspect of my trading psychology.
Till next time….

Thursday, 22 June 2017

Does Visualisation Help?

Reading Time - 4 Minutes

Hello Traders.

Visualisation… and I can hear you already…

‘Here we go with this pseudoscience rubbish!’

‘What next? Join in a circle, dance around a tree trunk and chant mantras?’

Well, if that’s what you like to do on a summer afternoon after a few too many liquid refreshments, then I am not here to judge. But for this post I want to stick to visualisation.

Visualisation interests me and I have found over the years that people either agree with the benefits and have things like ‘dream boards’ on their bedroom wall, or else they nonchalantly brush it off as nonsense. There never seems to be anyone in the middle who isn’t quite sure either way.

In this post, I want to look at the ways in which I approach visualisation and the reasons I find it beneficial. I also want to look at certain challenges and when visualisation tends to be pushed aside (hint – it’s usually at the exact time you should be using visualisation!) Hopefully I can convince some of you to at least consider it.

I don’t need to go too much into the ‘what’ of visualisation. I am sure all of you have come across it at one time or another: Using your imagination to project yourself into the position of having already achieved your goals; setting reminders around your daily life to remind you of what you’re aiming for; and even simply telling yourself over and over again that you will in fact achieve whatever it is that you want to do.

The problem I find is that a lot of people take visualisation as some sort of attempt at black magic. The misguided understanding is there that if you visualise something, the universe folds itself over neatly, brushes all of the big issues out of the way for a moment and instead works tirelessly on making sure you get that new car you’ve always wanted.

An even bigger problem than this being taken as a reason to ignore visualisation  is that a lot of people who eagerly approach visualisation hold the exact same belief! Unfortunately, a lot of the books and videos out there on visualisation seem to encourage this.

That is basically the lazy approach to visualisation – 'What? I just need to think about it and like magic I can have it? It says right here in this book that someone visualised winning the lottery and then they won! That’s exactly what I’ll do!'

Sound a little bit familiar to the trading world? ‘I make thousands a day! You just need to buy this course and you can do the same!’

Visualisation, for me, is simply another tool. It is a very beneficial one, sure, but by itself it won’t do anything to push you toward achieving your goal. You’ll still be sitting in your rocking chair at 60, imagining that car as you gaze off into the distance with a disjointed look on your face, eyes glazed and a little drool drying on your wrinkled chin.

So, it’s a tool. And for me it helps in one particular way:

-       Keeping me motivated

There have been lots of studies done on the human brain and it has been shown that for a large portion of the time, the mind can’t differentiate between the imagining of something and the living of it. For example, if you’re scared of spiders and you sit and imagine a spider crawling up your arm, the same parts of your brain begin to fire as would happen if a spider was really there on your arm.

The technique of visualisation is well used by sports stars to help them get ready for an event, to train the mind as they continually train their body.

Now, by visualising myself in the future having achieved a goal I have set myself, I look at it as though I am training my mind to accept that I am already there. I try and live it and experience it. I do it when I am bored sometimes – just sit and imagine myself already where it is I want to be a few years in the future. It’s a great way to pass the time!

I do not expect that by doing so I will magically achieve my goals. Far from it! As I have mentioned, I look at visualisation as merely a tool.

Instead, by getting my mind to fire up and enjoy living in that future projection, I get to feel what it might be like. I get to remember why it is that I am doing what I am doing. And the hope is that by doing so, when I am feeling tired and deflated and want to give up, my mind will chirp up from somewhere deep in my subconscious and give me a prod to keep going. It will be like calling on subconscious energy stores.

Let’s face it – most of the time we can’t be bothered putting in the work. It must be part of the human condition that the lazy option always seems like the best option. Just think back to the last time you gave up on something or someone close to you did… I bet you don’t need to think very hard to remember.

So, when we set out to achieve a goal, staying motivated is just as important as our preparation and hard work. In fact, without that motivation, you are almost guaranteed to give up. Because of that, we need to do everything that we possibly can to make sure we stay motivated for the very simple reason that it will likely keep us chipping away at the goal we set. Visualisation is one of the tools I use to help me with that. Because I have imagined how good it would feel to get to the finish line, I want to keep pushing and working to make sure that I get to experience it and live it.

The funny thing is that visualisation becomes most difficult when the going gets tough. Let’s bring this back to trading –

It is easy to sit and imagine yourself as a successful trader. You can make a dream board of all the things you would do and how you will feel when you get there. You dedicate ten minutes every morning to just sitting and imagining. It feels great and your motivation is at an all-time high.

And then you suffer a tough patch. Maybe you have a run of losses. Perhaps you succumb to emotional trading and severely damage your account. Suddenly you feel low and sitting at your desk and visualising seems childish and pointless. It isn’t helping you and besides, you just can’t be bothered with that nonsense any more.

The funny thing is, it is at those times you should be visualising. That is when it is most beneficial. Because you need to refocus your mind on the goal. You must refresh the feelings and understanding of why you are doing it. Because during the bad patches, it is the motivation that gets drained! Think of motivation like a fuel and at your lowest, your tank is nearly dry. Visualisation is like stopping off at the garage and filling up again. But unfortunately, you are more akin to an electric car rather than a petrol one and that means your recharge will take time. There are no quick fixes on the hard road of achieving your goals.

Stick to it. Build the motivation back up. Remind yourself why you are doing what you are doing. You are not going to quit. You are determined. This is what you want. You know you can get there.

And the more you visualise, the more resolute you will become. It’s like strapping another battery to that electric car. You can keep going longer and farther as you train your mind and really come to understand what it is that you want. Because the mind can be trained and you must focus on training and strengthening it in the correct way.

So there, in a rambling blog post, is why I visualise and why I suggest you give it serious consideration also.

I hope you’ve all had a great trading week!

James Orr

Thursday, 15 June 2017

T-Model Trader Blog Post 15 - Q&A Thoughts

Hello Traders.
I have been a bit quiet over the past couple of weeks in relation to the blog. Unfortunately, sometimes that annoying thing called life gets in the way! 
Anyway, here we are back with T-Model Trader and his 15th post (how did we get to 15 already?!)
I hope you've all had a great trading week.
James Orr

T - Model Trader Blog Post 15
Q&A thoughts
I am assuming that many of you have had the chance to read the interview with James posted on the Decisive trading blog. Beyond the fabulous questions, the answers haven’t been half bad either (well….someone had to say it) so it is definitely worth the time.
I personally have got so much from the answers that it has been a revelation for me in hearing the background stories in the development of James’s trading journey. It is so easy to forget that those who have achieved their desired goals have often gone through hell to get there.
So…without sounding like a right royal bastard, I have to say that it is great to know that he has suffered too. What it offers is perspective and has been so important in triggering me in to making some great changes in my approach to trading recently. I do feel that I might not be alone here in this thinking.
So I want to pick out what has been a major theme and expand on it, as the light bulb moment was I believe quite significant.
What was also surprising is that I didn’t realize the level of impact that this particular issue was having in my trading.
This theme has to do with the concept of work and is in Part 4, question 12.
In the answers, James talks about feeling like he had accomplished an outcome when he had built that “something” and how trading was a completely different affair. Having done similar work in the past, I was accustomed to this feeling as well. At the end of a working day, my body surely knew that it had done some work physically. So in this regard, there is an instant knowing in the relationship between doing and then gaining something from that effort.
So, without really being fully aware of this until recently, I have been struggling with this notion of seeing trading as work. Although it is something I had been spending time doing, I am coming to see that there was this part of me that felt as though I was just playing at being a trader, that in some way I was really just being a pretender.
The trigger was when I read that paragraph of that stated question that ends with “I just had to wait…..and wait….and wait”.
In putting these interviews together, questions and answers would go back and forth via email between James and me. I remember being up around 5am reading that particular response, rubbing my eyes and trying to get a grip on the brain explosion that I was immediately going thru. It was one of those moments when a piece of information slots into place and begins the next round of cascading events. I seriously felt as thou something had just crashed through the blood brain barrier, jolting me violently and finally made sense.
As the hours of that day progressed after I had read the answer in the interview blog, it began to dawn on me how this was actually quite a serious issue and that it was causing a great deal of problems in my trading.
Basically put, I wasn’t allowing myself to fully immerse in the process of becoming a trader, simply because it wasn’t “real” work that I was doing. The word pretender is close, but I think it is more than that too. A lot of it was also conditioning from my early years.
As a kid I use to love to read and was always carrying books around. At family get togethers, I was the shy one tucked away in the corner glued to the story and in complete joy about being so. I had a few real working class Uncles who use to give me a seriously hard time, mainly because in the “real” working world I wouldn’t be needing a pile of pointless books. Life was all about hard yakka and I was repeatedly told this over and over.
I remember on so many occasions that the stories of how “hard” they work would come out after a few too many ales. It was like a game where one of them would up the other of how “really hard” they worked, till the next one who worked “really really hard” and so on.
In their eyes, sitting and reading was not work and boy oh boy was this told to me many times. By extension, trading would not be considered work either. The key ingredients are sweat, blisters and a sore back (sounds lovely hey).
So when I read “waiting and waiting and waiting”, I realized that when I was in the state of “waiting and waiting and waiting”, my impatience was also being fueled by this sense of “I seriously need to do something here”, just to relieve that pressure of feeling like I am not working. When this is combined with my rather natural impatience, then a rather ugly trading mess tended to unfold.

The change from before to after this insight has been huge. I can accept now that this waiting is an intrinsic part of the process and that doesn’t mean I am a lazy person. I can go thru a trading session now and be totally accepting that no trades were taken, as no trades were there to take, or they didn’t feel right for me to take. In fact, I quite like the space that seems to have surrounded me now in trading (Yep…I can see me writing in Blog 458, that I haven’t taken a trade in quite some time, but hey man….like I am really enjoying the trading atmosphere…haha).
Also, in not having clicked the trade entry button, I don’t feel like I have failed either, simply because I didn’t perform some physical action. This is such an important aspect to these changes, as I understand it now that this waiting is a part of the process and all is well. Not only is it well, but I don’t need to fall into an anxious ball of fretting that I will never make it as a trader….because I am not placing trades. It was the perfect trauma loop of one feeding the other.
In the last few weeks, my trading has changed.
I will leave it at that and next blog take up another of these light bulb moments from the interview responses.
Till then…