Wanted to share some recent lessons. The market is certainly a great teacher.
Upper limits.
I attend a weekly business mindset class online. The class is all about human behaviour, mindset and psychology in relation to business and investing. Lately we’ve been discussing peoples upper limits in terms of their wealth creation, and its been interesting to see my upper limits play out in trading.
For example, the night of the 24th of Feb was a bit winning night that I missed out on. In many ways I don’t think that I was ready to handle another big win so early in my trading business. There was a part of me that felt it was “too easy” to make money like this so soon, and that I was potentially being greedy.
Because I love investing, it doesn’t feel like work to me. I can easily spend 12 hours in a day testing a system and be disappointed because its 10pm and I don’t want to go to bed. Recently there has been a string of losses in the MOC systems (all within the back testing). It has made me question my beliefs around the winning days and whether or not it is greedy. My new answer is, nope, I deserve to make that money. I’ve earned it through the daily work I commit to my trading business and mindset. And also – just because you love what you do, doesn’t mean that you don’t deserve to make a healthy profit from it.
Our mindset group have been working through a linking exercise, where we’ve set our next net wealth goal and are linking benefits to achieving that level of net worth. The exercise literally changes the neuro pathways in your brain. Looking forward to seeing how that plays out in trading.
Lesson two – fear around loss
Even though I had back tested it and was expecting days where the system could lose say 8% or 10% in a night, there was still a part of me fearing it. When it did come the other night, I felt no emotion about it and was able to carry on.
The lesson? Losses are never as bad as you think they will be. On that day, we could still eat and had a roof over our heads. Our daily lives did not change.
The day the system lost 8.1% I intentionally focused on the % and turned the blinkers on to the $ amount. Whilst I deal with the $ in the daily P&Ls, I’ll focus on the $ figures on a monthly basis. One trading session is not enough of a data snapshot to determine how good a system is. Nor is one month.
