Brett Steenbarger asked me to help him with the new book he’s writing on the subject of trader self-coachingÂ by answering the following question:
What are the three things you’ve found most helpful that traders can do to coach themselves?”
Here’s what I wrote up in response:
The first thing a trader needs to do is step back and take a big picture view of things. This is extremely important for new traders as they need to figure out how trading is going to fit into their lives, but even folks who have been doing it for a while need to do this from time to time as well. Trading is part of oneâ€™s life, not separate from it. What part it plays must necessarily define how it is approached, and that can change over time. Periodically taking the 30,000 foot view allows one to maintain perspective.
A second important thing is the commitment to performance improvement. That may seem like an obvious thing, but itâ€™s something easy to stray from at times. Itâ€™s often hard to not become complacent with oneâ€™s trading, especially when a level of success has been achieved. In order for self-coaching to have any value, though, the realization that one can keep getting better, and the desire to do so, must be at the fore all the time.
Finally, setting good goals and assessing how one is progressing toward achieving them is critical. These are things coaches in other activities like athletics do as external observers. The advantages there, however, is they donâ€™t have the direct link to the individualâ€™s psyche which complicates things when one is doing self-assessment. The most challenging aspect of this process for the individual is not allowing it to adversely impact oneâ€™s confidence level. That means the process needs to be as objective as possible and the trader needs to be able to disconnect their ego from it.
This stuff might all sound pretty high level and non-specific and that’s true. From what I’ve seen, though, one of the big problems with many new and relatively inexperienced traders is that they never take a look at the bigger picture. They get too caught up in the minute details.