Guest Post: Refining Your Inner Game – Part 1

Blog_GuestPost

By Terry Macartney

A few weeks back, Sam wrote a great article on the “Roles and Responsibilities of the Home Trader,” in which he suggested there are at least 7 roles (or skills) that are essential for retail traders. He also went on to suggest that we often neglect some, while overemphasising others.

How to know yourself truly

An holistic trading approach requires good communication between these roles, and a good awareness of any strengths and weaknesses that we may have with them. Trading Psychologist Dr Van Tharp encourages participants in his programs to identify and activate their different psychological parts, in order to foster communication and co-operation, both internal and external.

This can be thought of in terms of a bell curve whose ends are comprised of the skills and roles you love and hate. Lumped in the middle, you’ll find everything else. You don’t love it – you don’t hate it – you just do it. This curve most likely mirrors your trading style quite tellingly.

Mirror, mirror, on the wall

In this series of articles, I want to explore the bell curve in its sections, and dive into what this can tell us about ourselves and our trading. What we like and dislike in the markets is often a reflection of what we like and dislike in real life, and therefore actually quite an accurate picture of who we are.

It is instructive to look at the reasons we initially were drawn to trading. These reasons will most likely still be primary motivators in how you trade and will be the roles at the leading edge of your bell curve. It may be that the dynamism and adrenalin that go alongside trading were what initially drew you in, and so the Trader role dominates your trading at the expense of all else. It may be that you loved the idea of poring over charts and formulating ideas, so trading  becomes secondary to the Analyst skills.

As another example, say you bought into trading because you liked the idea of easy financial gains, working from home. Naturally you want the best system(s) managing your capital. So, you tweak, research, model, buy “Holy Grail” programs and build and rebuild your systems. Your Researcher persona is in the driver’s seat.

None of the above traders would be wrong per se, but none would be in an ideal position, either. Traders who are over invested in the roles they enjoy and neglect the others tend to get what they want from the markets (for example, excitement rather than money), but this is not a picture of profitable, holistic trading.

Eggs, baskets, and cautionary advice

Just because you’re in your element doesn’t necessarily mean you’re trading profitably. Often enough it’s the opposite. Retail traders often stay in their comfort zones, preferring not to think about balancing all the roles that could enable them to achieve much bigger gains.

The point of this exercise is to prompt an honest assessment of the reasons we started trading, and how we continue to trade. Are these initial motives still valid to enable holistic, profitable trading?

A more well rounded trader is a more effective trader in the long term, because there’s no arbitrary reliance on one individual skill-set. Put simply, a relatively quick and painless rebalancing of your efforts might just be the best move you ever make.

If I can re-quote Sam quoting Socrates;

 

To know thyself is the beginning of wisdom.”

About the Author

Terry Macartney is an FX and indices trader based in northern NSW, Australia. He is an Accountability Coach for traders and has established FXCellence as a coaching platform for working with traders and small businesses. Contact can be made here: FXCellence

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This blog post was published on www.fxrenew.com, a provider of Forex signals from ex-bank and hedge fund traders (get a free trial). If you like this post, subscribe to the blog for free or get free access to the acclaimed Advanced Forex Course for Smart Traders.

 

 

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