One of the most powerful and effective ways to master the symptoms of stress is to choose an objective and then start trading in terms of that objective. The sense of control and mastery that you will gain from this is enormous. You begin to trade and manage your portfolio in terms of what you choose rather than reactively in response to events. You begin to focus attention on the steps critical for reaching your objective rather than continuing to function in terms of your fearful responses.
By focusing on the reason for undertaking a task, you can then become absorbed by your purpose rather than by the anxiety and the reactivation of fearful feelings. If you can change your focus to a larger objective or vision, it becomes possible to move forward more effectively with less anxiety. Here concentration, step-by-step planning, and taking action become critical ingredients of the goal-oriented focus and help to dispel the anticipation of fear.
When you create an objective and work toward it, you change the way in which you experience the world. Having an objective allows you to become absorbed in the moment in front of you and encourages you to concentrate on the steps you can take rather than becoming involved with your own mental preoccupations and concerns.
A first step is to begin to take risks in the face of uncertainty. A good analogy is learning the sport of rock climbing. One of the maneuvers that seems to be the most risky is rappelling—swinging from a rope over a cliff or rock face. The best rock-climbing schools teach you this on the very first day, not from a huge cliff but over a short drop. As a novice, you may be quite hesitant as you step backward toward the edge, playing out the rope buckled to a harness around your waist. With the next step, you leave the ledge and step into nothing but space. In that instant, most novice climbers feel a rush of exhilaration, even if they are just 10 feet off the ground. They suddenly feel like they are flying—yet they are hitched into a harness and securely held by the rope. From that moment it becomes easy to lower yourself to the ground from higher and higher ledges.
How willing are you to let go of the familiar and begin to do what you haven’t done before or to do what seems scary? Take on new projects and new behaviors, and you will begin to discover new things about yourself. You can allow projects and future objectives to govern your choice of actions rather than being chained to the past. You can develop an entirely new set of habits when you are willing to face the unknown. By making small changes in your everyday routines, you will see how much you are locked into familiar and comfortable ways of behaving that may actually restrict your growth as a trader.
[ view entry ] ( 452 views )
There is definitely a psychology behind financial risk-taking. This psychology includes "mental accounting"—a tendency to overvalue what is owned over what is yet to be owned.
For the past 15 years, I have helped Hedge Fund managers to determine their own method for making decisions and maximizing their performance through goal setting, performance review, and examination of their psychological stopping points.There is definitely a psychology behind financial risk-taking. This psychology includes mental accounting—a tendency to overvalue what is owned over what is yet to be owned. It often leads people to overvalue trades they are holding such that they may not get out of losing trades quickly enough.
Conversely, traders often underestimate the value of stocks they have yet to buy, leading them to refuse to pay up for stocks growing in value, thereby increasing the odds that they may lose out on risks that avoid losses rather than those that lock in sure profits.
The way people “code” gains and losses often leads to poor trading decisions. Feeling more strongly about the pain that comes with a loss than the pleasure that comes from an equal gain, traders often add to or hold on to losing positions, hoping the tide will turn, even as they are reluctant to add to winning positions to maximize profitability.
These same principles apply to decision-making in other fields. By knowing how you handle choices, you can see that your decisions are not totally rational but rather a combination of your feelings, instincts, and reactions.
Once you understand your approach, you are in a better position to commit to a proactive strategy. You can shape an approach that takes into account the attitudes that influence your decisions. You can begin to handle the challenge of risk-taking and supersede those automatic patterns of behavior.
The key to this proactive approach is to commit to an expanded vision of success and then to act in terms of specific and concrete goals related to it.
Commitment is the willingness to risk yourself by promising a result without guarantee of the outcome. Promising to achieve something sets in motion a way of being in the world where you act in terms of your vision and create the possibility of making things happen. Commitment taps enormous energy and creates extraordinary possibilities for realizing your vision by putting you at risk without certainty.
We tend to think only in terms of reasonable, certain, and achievable goals. We search the past to determine whether our goals are achievable, and thus live in a realm of prediction and certitude. Our experiences are repetitive because we rely on proven formulas as we approach the future. Then, we either fault ourselves when we don’t achieve the objective or find ourselves frustrated when we achieve the goal and it doesn’t satisfy us.
A deep dimension of yourself—one that flows effortlessly, without friction—arises when you step into the realm of uncertainty beyond what you know and commit to the fullest expression of your hidden potential by acknowledging your own vulnerability and surrendering to the unknown so that the extraordinary can happen.
Commitment is an example of what Joe Greenstein, a circus strong man, believed was necessary to overcome “impossibility thinking.” He believed in a Life Force that we all have but fail to activate because we are constantly thinking, “I can’t do that. I’ll hurt myself.” That little voice in you—that instinct for preservation—does not give you an accurate picture of your capabilities. You have mental and physical abilities beyond your own estimation, but to realize them, you must be de-conditioned from impossibility thinking.
Greenstein believed you could do almost anything if you applied your mind and body to the task with enough diligence. The critical step is to overcome the instinct for self-preservation, which inhibits action. To do this, you must focus totally on the event at hand, with no reservations and fears. You need to believe in a favorable outcome without reservations or fear. Once you break through the “impenetrable” barrier, your belief in what is possible extends.
Commitment is the point beyond decision where you don’t ask yourself, “Can I do it?” but declare instead “I will do it.” With this phrase you live in the realm of commitment, where you put yourself at risk by taking the stand that you will do it simply because you have decided to do it. It is based on your creative vision of the future, not on your past history or self-concept. Commitment requires living in the action immediately before you. You can’t dwell on your past, nor can you project yourself into an unattainable future that looks imposing and unreachable. Rather, commitment is the action in front of you today.
“Without conviction it doesn’t matter what you do,” said one trader. “I use the word conviction in the sense of setting a goal and reverse-engineering it. It is your conviction that says, ‘I know it will happen, and I know what I have to do to make it happen.’”
Thomas Aquinas said faith was the highest form of knowledge. First you do your homework, study, go through cycles of learning. Then the final step is a leap of faith. You feel that you are right. This is conviction. Nothing is worse than saying that you have conviction—but then acting in the opposite way.
When you commit to a daily target, you promise not to give in to circumstances, obstacles, or breakdowns but to see them as aspects of the path you are on. Commitment enables you to be fearless in the face of obstacles so that you can turn obstacles into opportunities. When you commit to a vision, you become the cause rather than the effect of your life. Your single-mindedness gives you direction and greater capacity to persist. It lets you abandon dependency on your image. It energizes you in the face of failure.
Go beyond the comforts of the planning stages and take action. Act consistently with your declaration and trade in the gap between where you are and where you wish to be. This gap is the source of creative tension that points to what you must do to realize your vision. Committing to a specific result instead of “resigning” to a fate is a powerful way of dealing with reality, because it invites you to take risks.
[ view entry ] ( 425 views )
Your life has been designed to work, and your hidden potential contains what you seek and all that you need in life. It is OK to be who you are and choose what you have. The Quakers call it the "still, small voice within," that place of full awareness within that is in touch with the entire universe and is the source of wisdom. In effect, you don't have to keep searching for confirmation by focusing on being someone else or being somewhere else. There is no place else to be and nothing else to get. You will be able to grasp the levels of change in your life when you can allow yourself to be present in the moment, accept the world as it is, and trust that everything is as it was intended to be. Thomas Merton put it succinctly: "We have what we seek. It is there all the time, and if we give it time it will make itself known to us." Putting it another way, the Zen writer Senrin wrote: "If you do not get it from yourself, where will you go for it?"
Many people are dissatisfied even thought they have what they believe everyone wants and should want--a nice home, a good job, and the like. They are unfulfilled by their achievements or acquisitions and even their relationships. But they don't know why they are uncomfortable or what it is they really want or how little effort they devote to what they really want to do.
What leads to this misplaced effort, to this lack of meaningful direction? Many difficulties result from faulty self-images learned in your earliest years. Much of your personality and your concept of yourself comes from the emphasis on some and the neglect of other features of your personality during your childhood. If this emphasis matched your temperament, talents, and special skills, you have developed an accurate and realistic self-image. If not, you have probably experienced much conflict. You may, for example, have an inclination to paint but were conditioned to reject it. The more you become aware of these suppressed sides of yourself, the more you will be able to accept and utilize your hidden potential. While your choices as a child may have been limited, they need no longer be limited. You decide what to do with your life. In the last analysis, your behavior, not chance or the concepts of others, determines your concept of yourself and whether or not you will reach the goals you set.
[ view entry ] ( 379 views )
Calendar
