Becoming an Even-Tempered Trader
He who binds to himself a joy
Doth the winged life destroy.
But he who kisses the joy as it flies,
Lives in eternity's sunrise.
Traders cannot afford rigid beliefs. While beginners are susceptible to extremely destructive biases such as exiting profits quickly, letting losers run, and so on, even experienced traders can improve performance by overcoming subtler trading biases. For example, although experienced traders realize that they cannot be rigidly bullish or bearish, their flexibility often falls apart when it comes to modification of positive expectancy models or risk management methodologies. This chapter examines a wide array of psychological and somatic tools and techniques, including even-mindedness, meditation, visualization, and research to aid in tempering emotionalism, promoting creativity, and overcoming various trader biases.
THE “I DON'T CARE” GUY
While dining with some childhood friends (who are not in the industry) one asked what I taught traders. After explaining it, another replied, “I get it, you're the ‘I don't care’ guy.” Although a humorous simplification of trader psychology, in many ways his response was right. Emotionalism in trading does not work. As long as you are not reckless about risk management while executing a positive expectancy model, you should not be emotionally attached to the results of your trades. If you do care, then you either haven't done enough research to be certain that ...