Bulletproof Trader. Steve Ward

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Bulletproof Trader - Steve Ward


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them and achieve your trading potential.

      The goal in becoming bulletproof is not to avoid or get rid of trading stress or discomfort. The goal is to get good at it.

      Take a moment to think of times in your trading (or in a life event, if that is more useful), when you:

       overcame a difficult period

       bounced back from a tough situation, setback or loss

       got through a difficult time with relative ease

       challenged yourself on purpose and went out of your comfort zone.

      For each situation, ask yourself the following questions:

       How did you get through it?

       What characteristics, strengths or attitudes did you demonstrate?

       What skills did you use?

       What lessons did you learn?

      This exercise is a great reminder of the experiential nature of becoming bulletproof. It’s why we’re going to be action-focused rather than avoidance-orientated in our work on improving your trading.

      “What would have become of Hercules, do you think, if there had been no lion, hydra, stag or boar – and no savage criminals to rid the world of? What would he have done in the absence of such challenges?”

      – Epictetus

      6 Behavioural Investing: A Practitioner’s Guide to Applying Behavioural Finance; James Montier, John Wiley and Sons, 2007.

      7 www.dragondoor.com/build_your_inner_citadel

      8 The Little Book of Stoicism: Timeless Wisdom to Gain Resilience, Confidence and Calmness; Jonas Salzgeber, 2019 (www.njlifehacks.com).

      Part Three: Commitment

      5. Mindset Over Matter

      Your trading mindset

      “It is our attitude toward events, not events themselves, which we can control. Nothing is by its own nature calamitous — even death is terrible only if we fear it.”

      — Epictetus

      Your mindset is a collection of your beliefs, perceptions and rules. It reflects how you think about yourself, the world and others. It also shapes how you think about things. In trading, your mindset will define (and be defined by) how you think about vital factors such as the markets, risk, uncertainty, money, winning, losing and mistakes.

      The role of mindset in your trading experience

      Your mindset develops from birth and is influenced by the experiences and environments you encounter. It’s affected by your family, schooling, life, friendship groups, sports and hobbies, further education and work. From the moment you start reading about trading, learning how to trade, or getting exposed to the markets – your trading mindset is developing.

      Key events and people, both positive and negative, can play a significant role in shaping your mindset for the better. A financial crisis, a tough period of drawdown – as much as a winning run, a respected colleague or a good coach or mentor – can all help you develop beliefs and perceptions that support your best trading performance.

      But while some aspects of your mindset will be helpful, others will be unhelpful, taking you away from the trading actions required for maximising your chances of success.

      One of the aspects of becoming a bulletproof trader is developing a mindset that supports successful trading. This is something that will surface throughout the book, but the focus here is mainly on our mindset and its approach to stress and setbacks.

      How you think about stress – and the challenges, setbacks, losses and mistakes that give rise to it – will profoundly impact your experience and success in the markets.

      People who had experienced high stress and who also believed that stress had affected their health had a 43% increased chance of premature death.

      By contrast, people who had stated they had experienced high levels of stress but that stress was not harmful to their health had the lowest risk of dying, even lower than those who had low stress but believed their stress was harmful.

      The key outcome from this research challenges the belief that it is stress per se that is bad for us. That doesn’t seem to be the case. Nor is it the amount of stress that causes problems to our health. Rather, it is our belief about whether stress is harmful or not – what our perception of stress is.

      It is our mindset about stress that matters most.

      In another study reported in the book, people were put through two stressful situations: a five-minute videotaped speech on their personal weaknesses in front of a panel trained to actively unsettle them, followed by a maths test where they had to count backwards from 996 in sevens, again in front of a panel who provided unsettling feedback.

      Before the tests, some people in the study group were told that the feelings of stress in such situations, and the physical responses they might experience (e.g. increased heart rate and quicker breathing), would be helpful. They were your body’s way of preparing you for the challenge at hand, enabling you to perform at your best. As a result of this instruction these participants performed more effectively and with a lower level of stress, compared to those members of the study who were told that the feelings and sensations of stress in such a situation were harmful to performance.

      It appears that what we think about stress has more impact on our bodies, our health, and on our performance than the actual stress itself. With this in mind, one of the most important strategies for managing your trading stress is to change how you think about it.

      Traders need to see that stress is both normal and – importantly – can be helpful. This reduces the impact of stress on your health in the long term (chronic stress), and may also increase your trading performance in the short term (acute stress).

      Two steps to developing a performance-enhancing mindset around stress are:

      1 Accept the inherent stresses of trading the market.

      2 See the stress response as helpful and performance-enhancing.


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