The human mind is constantly wandering and traders are no different. Trading regularly requires an abundance of concentration and there are times when the massive burden of information and pressure can lead to lost concentration and focus. Before you start making trading decisions and blowing up your trade here are some suggestions to limit the damage.
The first step to improve your focus is to identify the mental breakdowns that cause you to lose focus.
For example, a trader with very high expectations for his performance is likely to become easily frustrated, lose control emotionally, when he believes that those expectations are not being met.
Below is a list of the top mental errors that can reduce your focus.
1. Perfectionism — When you don’t perform perfectly you lose composure because you become frustrated and then focus too much on your errors instead of the tasks needed to perform well. Remember that the market is perpetual and there will always be another trade. Don’t miss it fretting over the last one.
2. Social approval or worrying too much about what others think — Worrying too much or mind reading into how you think others may judge you distracts you from your performance. You lose composure because you are too concerned with how others may perceive your performance. This can be a problem in todays wired world where the insecure traders take pleasure in being critical of anyone trading successfully. It could also be friends or partners that have irrational views about trading and money.
3. Irrational Beliefs — Irrational beliefs cause you to stay stuck in old, ineffective patterns of behavior. Some people believe having money or being rich is evil and as a result embark on extensive self sabotage in their trading performance.
4. Fear of Failure – Fear is based on your intense need to win and causes you to worry too much about losing or failing. This can lead to you play defensive and tentative instead of composed and free.
8. Dwelling on Errors — When you get too caught up in mistakes and dwell them, it becomes easier to get frustrated and lose emotional control, which will not help you stay composed after errors.
Here are some tricks for helping you re-gain composure during a trading day
To gain maximum composure you must accept that you are going to make mistake and experience setbacks.
Remember you are human and that you can’t be perfect. Learn to be more accepting of mistakes and encourage the ability to move forward and focus on the next trade.
When you do make a mistake have a strategy that helps you regain composure.
The 3 R’s for composure help maintain composure after a mistake or error.
The 3 R’s for composure stand for: Recognize–Regroup–Refocus.
The first step is to Recognize that you are dwelling on the mistake, which limits your ability focus on your trading.
The next task is to Regroup by interrupting the chain of thought. This requires you to battle your own emotions and dispute your irrational thinking. For example you may have a positive affirmation for this.
The last step and most crucial is to Refocus on the next play. Ask yourself what you need to focus on right now to do your best on the trade? The answer will help you refocus on the task-relevant cues for the next play.
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