The One Emotion You Need for Peak Trading Performance

One trading emotion is directly responsible for consistent trading results or failure. To illustrate this emotion, I am using a golf example. From my experience playing professional golf, I know that tournaments are won and lost in the mind, not in the golf swing technique.

Your thoughts direct the actions you take.

Our minds record every experience we encounter. When we face the same situation in the future, it reminds us of what happened before.
This sometimes has devastating consequences, like it did with Greg Norman. And it can happen to you. Past experiences do influence future behavior.

Here is what happened

Greg Norman was playing in the 1996 Masters tournament. He led the tournament for three rounds. He was playing flawless golf and on track to win. Then, all of a sudden, his game fell apart. He blew a 6-shot lead, giving away victory to Nick Faldo in dramatic fashion.

He snap-hooked his first tee shot at the beginning of the last round, making a bogey on the 1st hole, and his victory ended right there. From that moment onward, he struggled most of the day till his lead painstakingly evaporated, leaving his fans stunned and in disbelief, and it all happened in the blink of an eye. It was one of the most embarrassing moments in golf for anyone to endure.

Collapses like this happen frequently with top sportspeople, and it also happens to traders all the time. Worse, many traders don't know why collapses or losses occur without an updated trading journal. Many traders don't have one.

You would think Greg Norman could control his emotions; after all, he was on top of his game and world golf at the time. Yet he succumbed to the pressure in the heat of the battle with a disastrous last round.

How could this happen? And why did it happen?

There is a great lesson you can learn here. First, the answer lies in his past experiences of losing in the same tournament. In 1987, Norman lost in a playoff for the Master’s title to Larry Mize. He also surrendered 3 round leads in all the other majors in previous years.

Fear of Losing
Greg lost focus on the present situation or moment. The past losses altered his behavior at the most inopportune moment in this tournament. And he repeated what happened in the past.

We cannot control the past, nor can we control the future. We can, however, control the present situation we face. And this is where Greg’s focus should have been and stayed.

The present gives us the edge over our competitors, so performance seldom wavers. Had he stayed in the present moment, his thinking and shot execution would have been much different, and he could have won. The present moment is often referred to in sports as “playing in the zone.”

When you experience this zone, it's a feeling everything happens subconsciously. Your mind is in a quiet state. It’s like you’re in a cocoon or trance, unaware of what is happening around you. You are mindful, not thoughtful.

This is the true edge you need in trading.

Watch this video. It displays total “present focus’ with no outside distractions. All the focus is on the prey till it’s caught in their jaws.

You can also experience the “true zone’ in trading by pouring your focus into the present moment, unaware of what is going on around you, and your mind is not thinking of undesirable outcomes of the past or future;

your trading decisions become more precise and concise.

Trading without this present focus causes mistakes to happen when you least expect to. Our emotions are always vulnerable no matter how good a trader we are.

The slightest miscalculation in technical analysis can shift your thinking out of the “present zone” into the past or future. Focus on the current state of the market and what the market bias is telling you at that moment. Allow your mind to think freely. Ask yourself a few questions.

Are You Thinking of Past Trades or the Future Outcome of the Trade?
Have Past Losses Traumatized You?

Your answer to these questions tells you where your focus was in the trade.

How Do You Focus in The Present Moment?

1. When you trade, fear and excitement are present. Emotions are not optional, and you can’t “switch them off.” When you think, emotion is managing the quality of your thinking, so you must keep your emotions in check when trading.

> It doesn't help to deliberately suppress emotions because they will surface when you don’t want them to. Be aware of the thoughts and feelings you experience.

> Any doubt or fear indicates anxiety in your thinking, and the wrong outcome is bound to happen.

> Your inner self-talk may be positive, which could shift your thinking into the future. Fear and excitement take you out of the present and into the future or the past.

2. Your emotional thermometer. Where is yours?

You can regulate your emotions and don’t pretend they are present; be mindful and not thoughtful of them and keep them at an even keel. This takes practice and is achievable. It’s better to do this than to continue losing your emotional discipline when you need it the most.

> When our minds absorb the present, we enter a flow state of mind, better decisions are made from neutral emotions, and a greater chance of improved performance is possible.

> Accepting that life is uncertain and so are the markets and embracing emotions around probability is possibly the best answer. Trading demands a mind shift to ‘probability thinking’ and a present state of being.

Take stock of your thoughts:
* Write down your thoughts before you trade.
* What are you thinking while you trade?
* Why did you lose the last trade or string of trades?

The exact opposite is also worth taking stock of. For example, you won 9 out of the last ten trades. You are flying, and this also presents a problem for future trading. The joy of winning can and will bring you down, making it easier to make silly mistakes
It's like hanging onto a losing trade, thinking it will come back, and it gets you deeper into the negative figures. Watch out for this.

These events and decisions should all be noted in your trading journal as you take each trade and why you did not take a trade.

Do You Manage a Trading Journal?
Without an up-to-date journal, you never will know what you are doing at any time. Nor what you need to correct. It would be best if you had accountability for your actions.

If you are not doing this, you let your thinking fall into the past or a future outcome.

I hope I have given you some food for thought in this article.
It’s a subject I take very close to my heart in helping traders outperform themselves.

Believe YOU can do it, and YOU will accomplish more than You Think!

Are you Serious about training to become the trader you can become?