COACHING
FX
a big loss; a sustained period of drawdown; making an error; and so on - then their explanatory style would promote less perseverance, and may be result in those traders not achieving their full potential.
How do you currently deal with setbacks ?
What meaning do you give to mistakes, losses, setbacks ?
How could changing your perspective of such events enhance your performance?
TWO OTHER DIMENSIONS TO TRADING RESILIENCE
Psychological resilience is critical to long term trading success, however I feel that there are two other dimensions
to a traders level of resilience
that are important and impact on a traders psychological functioning.
Martin Seligman, author of “Learned Optimism” of any event is the meaning you give it.
The research done by Martin Seligman (Learned Optimism 1990) suggests that individuals with an optimistic explanatory style not only consistently outperform those with a pessimistic explanatory style but are also happier and live longer. An optimistic explanatory style, particularly about bad events, encourages perseverance: pessimistic people are more likely to lose confidence and motivation after a poor performance than optimists, and encouraging optimism in traders can therefore lead to perseverance which is of course a key part of resilience. With pessimistic traders when a negative event occurs - for example,
• Trading capital The size of your trading capital is significant because it is not only a determinant of the size that you can trade and the positions that you can take, but also more importantly contributes significantly to how you feel, your level of confidence and composure for example, and subsequently often the decisions you make and the risks you take, or don’t take, as well as your ability to cope with future losses.
• Physical energ y Your physical energy impacts on your ability to mobilise and to sustain high intensity emotional states such as motivation, confidence, enthusiasm and focus, and to maintain composure under duress. When times are tough you often employ significant
amounts of mental and emotional energy to cope with the situation and so your FX TRADER MAGAZINE October - December 2011 19
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