count for less than the value of preserving the money obtained earlier.
The preservation of capital becomes more important than the increments
to be made from putting more at risk.
Some of this is explained by Bernoulli's principle of utility, which
says that utility or value resulting from an increase in wealth is inversely
proportional to the quantity of goods previously possessed. Therefore,
as traders succeed, they are less inclined to want to risk themselves to
make more. The only way around this is to keep concentrating on repeating
good behavior, and to stick with their trading strategy. That's
the essence of mastery rather than mere goal setting.
Mastery encompasses the ability to sustain momentum. It is not uncommon
for traders to blow up just as they are reaching their financial
targets. How come imminent success raises anxiety levels? Because success
represents entering the realm of the unknown.
Success actually can stimulate fears about failing and about the impossibility
of success. These increased anxiety levels may result in selfdestructive
behavior and a succession of losing trades that bring the
trader back to the starting point.
Uncomfortable with success, a trader named Dave began to conjure
up images of failure whenever he started to succeed at new levels. He
became convinced that his past successes were due to luck. His inability
to accept the euphoria of success set in motion a self-fulfilling prophecy.
Before long, believing that he had done something wrong, he would
make some frantic gesture to "save himself." More often than not, the
gesture would wipe out his profits for the month.
What can be done to sustain a series of successful trades or successful
weeks or months of trading? What can you do to perform at a level
commensurate with your natural abilities? Let's look at strategies that
worked for Dave, and have proven especially effective in helping other
traders.
First, become aware of the sequence of events associated with success.
To overcome his inclination to self-destruct, Dave needed to learn
to separate the events of the marketplace from his own physical and
emotional responses and his interpretation of those responses as reflective
of an impending catastrophe. He then needed to see how the trading
decisions he typically made as a result of these interpretations were
often based on long-standing systems of beliefs totally unrelated to the
requirements of successful trading in a particular market.
The second strategy for Dave was to choose what he had, to observe
and accept his anxiety without trying to change it. For example,
he was encouraged to notice that he had mixed feelings about succeeding
and making money and to understand that was okay. If, like Dave,
you try too hard to break through a repetitive pattern, you build up
tension and eventually reverse gears. You wind up producing the very
result of which you are afraid.
Accepting what you have means accepting your demons. In
Dave's case, it meant that he had trouble accepting success. To rid
himself of that demon, he needed to concentrate on playing the game
quite independently of his idea of what success meant. He needed to
notice the beliefs that kept him locked in the past. And then he
needed to let go of them gently, recognizing that too much effort
would pull them to the forefront of his consciousness and produce the
result he didn't want.
A third strategy for Dave was to learn to maintain a free flow of energy.
He had to get familiar with his feelings and bodily sensations of
anxiety, especially as he got closer to reaching his objectives. He also
learned to visualize his goals and then play beyond them while he was
experiencing anxiety.
Once a trader like Dave has learned to trade proactively, he or she
must make sure that successes do not influence motivation and lead to a
decline in positive focus. In the normal course of events, traders basically
trade in terms of regressing toward the mean, so that after a certain
amount of success their performance fades.
When you are completely engaged in trading, you are totally ab
sorbed. You don't focus on yourself or on what people think about you.
You feel fine, relaxed, and are enjoying the experience. The more skillful
you become in doing this, the more you can bring all of your abilities
into play.
When you trade from commitment—and do what you said you
would do—you generate an extraordinary amount of energy. You begin
to see opportunities in the market that you couldn't see earlier. You do
not need to struggle. All you need to do is to show up and participate
in the context of the new trading target. Trading in terms of an expanded
target means having the courage to look for what is missing in
your trading strategy. This becomes the source of the breakthrough you
can produce.
When you are totally committed to all the steps necessary to produce
the desired result, you are likely to experience the exhilaration of
"the zone," where everything flows effortlessly.
Read More : Sustaining Momentum
