Friday, November 28, 2008

Thoughts on Giving Thanks

Researchers have identified several components to psychological well-being, including our overall happiness, our energy level, and closeness in social relationships. Another important component to well-being is contentment: one's satisfaction with life. The literature finds that contentment is different from happiness. The former reflects a global appraisal of one's life situation; the former is an emotional experience. We can do many things that make us happy and yet not achieve overall life satisfaction and fulfillment.

Too many traders equate contentment with complacency. They are afraid of being satisfied, because they assume that this will reduce their motivation to move ahead. As a result, they never find contentment; they are never satisfied.

In my own experience, I trade best when I have reached a particular point of peace within myself. If I miss a move or exit a trade too soon, it's no more that a temporary frustration. There will always be other opportunities. I don't need to catch each move in its entirety to be OK with where I'm at in my trading and in my life.

When I fail to find that internal peace, wanting to succeed becomes need to succeed. I find myself trading out of that need, chasing moves and overtrading. I'm not trading from a position of emotional well-being; I'm trading to try, vainly, to find well-being. But no happiness from winning trades can sum up to life satisfaction.

The content trader operates in a universe of plenty. The trader lacking satisfaction operates in a universe of scarcity.

Thanksgiving is more than a day in the year; it's a state of mind. And I suspect it's a state that has much to do with long-term success. The contentment of giving thanks is not laziness or complacency; it's the state that clears our minds for creative insights and the perception of opportunity.
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5 comments:

Lavonne said...

Dr. B.,

I always find information that resonates deeply on your site. I have an "issue" with scarcity, stemming from childhood experience...and I think this issue is fueling my tendency to close out winning trades too quickly.

I recognized the trading problem four or five months ago, but haven't been able to overcome it. While I have more winning days than losing days, and a trade win:loss ratio that fluctuates between 2.5:1 and 4:1, I consistently lose money because my stop-induced losers are larger than my wins.

On Wednesday, I decided I'm going to trade exclusively in simulation mode until I feel I've made measurable progress on the issue. I'll be working on some exercises dealing with attitudes about abundance/scarcity and I will be doing your recommended meditation/visualization exercise before each trading session.

Last but not least, I'll be monitoring your blog for more helpful information to guide me along my journey.

Best always,
Lavonne

mike said...

Dr. Steenbarger,

One of my favorite quotes from John Wooden is: "Success is peace of mind which is a direct result of self-satisfaction in knowing you made the effort to become the best of which you are capable."

Thank you for your post.

Mike

Brett Steenbarger, Ph.D. said...

Hi Lavonne,

Thanks for the feedback; you're absolutely right to identify that the problem could be closing winners too quickly, not just hanging onto losers. It's a solvable problem; feel free to contact me at the email address listed on the blog page section "About Me".

Brett

Brett Steenbarger, Ph.D. said...

Great quote, Mike. It's a rare insight; thanks--

Brett

Antonis Protopapas said...

Lavonne I wish you the best of luck, dont quit!

Thank you for the quote mike.

I agree with what you say in the article Dr. if we catch every trade there is ive learned that i will have no life and no where to spend my money on. Its very simple.. After we reach contentment every winning trade over and above that i would guess would be more fun as it is not needed. Thats a good place to be as a trader.