Monday, January 18, 2010

Satisfaction With Trading: Why It's Important to Performance

My recent post discussed some of the dynamics behind job satisfaction and outlined factors that account for satisfaction and dissatisfaction among traders.

This is an important topic, because the learning curve of trading (like that for most performance fields) requires immersion: an ability to completely focus on the tasks at hand. Think of a golfer during a key putt; a chess champion during a decisive moment in a game; or a sniper just before taking the shot. All require the ability to be absorbed in the performance.

Traders who lack satisfaction--who are distressed, stressed, anxious, frustrated, or depressed--cannot sustain immersion. Those emotional states inevitably return attention to the self, so that the sources of dissatisfaction can be addressed.

When I ran an internship program for traders in Chicago, I found that one of the best predictors of success was simply the joy, energy, and satisfaction students had with the learning process. If the students fought the market and approached the learning curve as a chore, they could not sustain the immersion needed to internalize market patterns. It was the students who found markets endlessly challenging and fascinating that poured themselves into the learning and mastered the learning curve.

So how can developing traders sustain a sense of satisfaction with learning, even as they make all the rookie mistakes and face the usual experiences of inadequacy? Here are several keys:

1) Turn Every Day and Week Into a Learning Experience - Make sure that you take away from each day something positive that you've learned and will work on in the days ahead. If you grade yourself on your learning and your improvement, you'll be able to weather the trading setbacks;

2) Find Teammates - One way soldiers get through the rigorous training of Rangers and SEALs is with the support of buddies. Colleagues can advance your learning, but can also be a source of encouragement and challenge when times are tough.

3) Hone Your Niche - Relentlessly identify what is working for you in your trading: what you're doing well when you're making money. By focusing on your strengths, you can build upon those and stay in your performance sweet spot.

4) Have Plenty of Reserves - You can't be pressuring yourself to make a living from your trading when you're just first learning how to trade. Like any business, you need to be well capitalized, so that you can survive the lean times and the start up phase.

5) Make Sure You Have Support at Home - A spouse needs to be part of a trader's business planning. The support at home is key when it comes to facing those lean times and start-up frustrations. To sustain that support, the trader needs to make sure that the financial needs of the couple and family are not jeopardized by the time (and capital) devoted to trading.

Ultimately, you will fight experiences that are dissatisfying, and you will absorb yourself in those that bring satisfaction. How you approach the learning curve ultimately helps define your performance level.