Soft skills are funny in that they are called "soft" yet in trading stocks, the psychological, mental and personal reward in developing soft skills are at the apex of professional trading.
Personally, I have a hard time maintaining composure, in fact for months on end during a draw-down. I can lose composure and be an absolute slave to emotion, beating myself up and trading like a lunatic. Some of this behaviour stems from a poor upbringing, others from a low self-esteem which is in the process of being improved.
Most important life and psychological skills are overlooked when people look up "how to trade in stocks". Typically, we are bombarded with strategy after strategy, indicator after indicator and a throw-away chapter full of axioms and rules, most of them superficial in that we "know" what these axioms mean but sometimes it can years of trading to truly figure out what the really mean.
I've really struggled to find trading books that talk about:
- Dealing with losses and how it impacts your self-esteem
- How to develop and maintain confidence and personal consistency
- The best way to practice trading and gain experience without damaging your mental health
- Techniques and methods to maintain a positive outlook despite many setbacks
I recognized that many of my prior blogs dealt with failure and what was "stopping me being successful", to the point I brought it up in my recent therapy session.
What my psychologist said to me was pretty deep and really struck an important cord after she dropped "So what are you doing well?". As I scrambled to let her know just how much of an idiot I am, she slowed me down and said, "How often do you look back at what you've done well in your life and where you are now?".
It reminded me of a call I had with Mark Minervini two years ago when I hit a trading rut. Out came the charts with all my mistakes, issues, hang-ups and excuses. Mark said to me on the call "Congrats, you are becoming an expert at failure!". At the time I was really offended, but now I see how simple and true it is. Focus on failure and it's bound to show up. As in trading, as in life.
I realized at this point that subconsciously, I was dwelling on failure and it was impacting my self-image, to the point where I constantly questioned if I can do this for life or if I will never "make it".
Focusing on What we are Good at
After the session, I drove home, market about to open and recognized just how far I had come in my trading:
- I learned how to cut my losses extremely quickly and just how powerful it was
- I had made over 10x what I have put in, life changing money for most people, I could quit work at any time I wanted (within reason)
- Learning about the stock market, psychology and strategy had made me extremely good at my day job
- There is no such thing as losing, there is only learning
- That knowledge is not power, the proper application knowledge is power
- Success will only happen if I truly embody and live authentically
The self-knowledge one gains from trading, if you dare to peak under the hood is unparalleled in almost all industries. Looking back at not only the monetary benefits traded had provided me, I also took some time to open my eyes to what I learned about myself, some more (pretty raw) examples:
- I was chasing money and it was hurting me
- All I wanted was the result not the work or process
- Everything in my life became comparative
- It felt like I was on autopilot and being a complete slave to my emotions
These subtle reflections helped me look outside of trading and the frustration that comes with it and learn to truly be grateful for things outside of it. My wife, my health and my job were not worth totally sacrificing to satisfy my ego.
If I can Make Some Recommendations
I've spent a significant amount of time, effort and resources learning how to trade stocks and crypto in the hopes of making huge amounts of money and measuring up to the standards I feel society values more than my own - yes it's a mouthful.
By running a race on other people's ideological terms, I have both disconnected from the fun and process of trading and learning and created an unfortunate obsession with money, material wealth and other superficial notions which are a parasite to positive trading.
It's easy to get pulled into this world because of:
- Social media
- The fear and hype news cycle
- Expectations from others
- Projected expectations of our self perpetuated by society
- Primitive forces ingrained in our DNA (heuristics)
If we think about it though, what is it in trading we are trying to fulfill? Is it to learn a method of profiting in the stock market and having long term financial success? Or is it something else?
One thing that is for sure. If you let expectations push you around, do not take time to be good to yourself in other elements of life and fall into a habit of self-loathing and regret - trading will become a noose around your neck. Adopting a growth-orientated mindset and being kind to yourself is the only game in town.