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5 Ways to Feel Rejuvenated by Monday

04/13/2012 8:00 am EST


Michael Bellafiore

Author, One Good Trade: Inside the Highly Competitive World of Proprietary Trading

Traders feeling worn down by the stresses and strains of the markets may find much-needed perspective in these five suggestions, as told by veteran trader and author Mike Bellafiore.

I was in my office today working on my next book, The PlayBook, when I got pinged with this from the trading community:

“Mike, what do you do when you’re a practicing trader, working, saving, and studying to begin trading live, and you feel your motivation begin to peter out. You have this goal, but the road there seems like it will outlast you.”

It reminded me of how I needed to talk to one of our better traders about these comments in his monthly review (which all traders at SMB Captial have each month):

“Last 1 & 1/2 weeks—production started to drop off—lacked energy, admittedly started to dog it on my overnight preparation, didn’t research and attack health care sector plays as voraciously as I could (I usually do a lot of work on sector plays—solar, social media, nat gas, coal, to name a few), didn’t want to get out of my comfort zone to trade high beta’s and thin momentum stocks, didn’t respect loss as much and would load up on random plays on a whim (taking shots).”

Traders are often wired to grab on too tightly. They are wildly ambitious. Some are even irresponsibly driven. Failure is not something they can tolerate. If they could, they might not have ever tried this silly sport of trading, which carries with it more potential rejection than a NYC bar! The traders above strike me as holding on too tightly.

I see this with my SMB partner Gilbert Mendez (GMan) at times. I saw this with “Dr. Momentum,” a trader I discussed in my recent book, One Good Trade. I see this with the developing trader from our desk who wrote about his performance above.

What is progress, and what is failure for the new and developing trader? Is it a month where you did not exceed last month’s Profit & Loss (P&L)? Not necessarily. Is it not making money in your first six months of trading? Maybe not. Framing your progress incorrectly breeds unnecessary stress and regret.

See related: Why P&L Doesn’t Determine Success

Every day that you trade you get better. Every day where you gain screen time, you improve as a trader. Often, when reading the new regrets of a developing trader, I think of that great Dave Matthews lyric, “Where are you going?”

I have found five suggestions to be very helpful to me as a trader, which relate to the comments from the developing traders above and their inability to sustain their energy.

  1. Make sure you take some time off
  2. Do things outside of work so that you do not value yourself only from your trading. Trading is the game we play; it is not who we are
  3. Be grateful for the privilege of trading. It really is so cool that we get to do this for a living. Be thankful for this opportunity, no matter how short or long
  4. Stop judging your trading by your profit & loss (P&L). For example, that trader on our desk had a better month than the prior, though he did not make more money. He worked on his sizing, and there was less opportunity this month than in the prior one, so comparable results are an improvement. He gained another month of experience
  5. It is OK to fail. How is Oprah doing with the OWN Network? Remember that Michael Jordan commercial about all his failures before triumph? Oh man, if you only knew how many stupid mistakes I make every week as a trader! Failure is a blessing and a chance to learn

They say an artist is the only one who can truly judge their work. You know what you need to work on as a trader. Are you doing it?

If so, then isn’t that so much more important than your P&L? And if you are doing all you can, then why are you so concerned about your results?

By Mike Bellafiore of SMB Capital

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