The concepts taken from the various aspects of life can often be plugged into other situations, no matter how unrelated they seem to be. For example, the principles used in sports psychology can apply to being a trader.
Charles Kirk over at the Kirk Report found this excellent list in Golf Digest. In the article, Dr. Bob Rotella, a famous sports psychologist for pro golfers, has 10 rules to help golfers achieve better performance and Kirk has found that the 10 rules may also be applied to achieve peak performance in the market with these interpretations:
- You are a winner. When you think of yourself as a champion, you’ll find yourself acting like one. Confidence is key. Back it up with hard work and determination to find that edge.
- Don’t focus on results. Don’t think about how much you could win, or lose. Focus on trade at hand. Everything else should fall into place.
- Stay optimistic. When everything seems like it’s turning to mush, keep a steady mind and stick to your plan. A good trader accepts mistakes and moves on.
- Be patient. Being impatient leads to aggressive trades in an attempt to grasp at that elusive pot at the end of the rainbow. Slow and steady wins the race.
- Ignore the background noise. Just because someone says something doesn’t mean it’s true. This static noise can often derail you from your game plan, so have a strategy and stick to it. We fervently stick to our 200-day moving average as our guide.
- Know yourself. Utilize what you already know so that you may put your attention on maintaining your edge. It may be counterproductive to use a strategy that clashes with your personality and strengths. Be honest with yourself about who you are and how you operate, then do things that play to your best features.
- Stick to a routine. Good traders have a set process they follow during trades. Having a routine that you stick to no matter what will help you act in the least emotional way you possibly can.
- The market is your friend. You can’t antagonize the market because it will only lead to more mistakes if you attempt to beat it to submission. Instead, enjoy the challenge it gives you.
- Test yourself. Try out hard trades and difficult market orders to improve yourself and acquire new sets of skills. By trying new things you didn’t believe you could do, you learn new things and give yourself confidence.
- Have a supporter. Few people can be successful all by themselves. Seek out someone who is like-minded or supportive of your goals.
For more information on trend following, visit our trend following category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.