In trading as in life, effectiveness has to be the measure of truth. If something doesn’t work, there is no point in continuing to do it. Misperceptions, false unconscious or conscious beliefs, and unhelpful behaviors can contaminate and desecrate your most sought after results.
Imagine the frustration of a trader who perceives that a market is changing direction when in fact it is persisting in its original thrust. Or consider, for further example, an investor who bought into the belief that buy and hold is a valid investment strategy. That investor had to have experienced devastating losses over the past year. Or ponder the trader who repeatedly fails to utilize stop losses and experiences numerous outsize losses because he won’t accept a loss.
When you choose effectiveness as your measure of truth, you can learn from your mistakes. You can make plans, take action, receive feedback, and assess the results. You can revise your plans, take new actions, receive new feedback, on and on, until you find a viable strategy that will work most of the time.
When you fear loss, when greed overcomes you, when you get reckless, or when you hesitate, you become grossly ineffective. When you’re confused or ambivalent yet think you need to take action, you do yourself no good. In each case you need to sort through your thoughts, develop a clear focus, search for the high probabilities, and take prompt and calm action.
After a series of trades, it’s advisable to analyze and assess the results. You can then determine whether to go forward with confidence or to make changes.
Listen to Serge Kahili King, Ph.D who derived these principles from Huna:
Effectiveness is a universal, powerful, unconscious drive. Adding conscious desires makes it even more powerful. Adding skill, derived from knowledge, experience, and practice, turns it into a potential force for unlimited achievement.”
What is it you desire to do with your trading? How do you desire to trade? Where does the greatest opportunity lie? Do you have an edge? What is it? What are your strong points? How can you take better advantage of them? What are your weak points? How can you resolve or bolster them?
In short, where are you effective in your trading? What works? Do more of that. Where are you ineffective? What doesn’t work? Do less of that or stop doing it entirely.
At the end of each trading day, sit down with pen and paper and ask yourself what you did right. Ask yourself how you can do more of that tomorrow. Then ask yourself what mistakes you made. And be sure to figure out a way to keep from repeating the same mistakes tomorrow.
Oh, and by the way, along the way, forgive yourself. And move on.
What would happen if every morning, you started the day by asking yourself, “How can I be more effective today?” Your trading and your life would have to expand into ease and joy as workable patterns become routine and reliable habits.