I’m undertaking a 1000-day reinvention project, blogging here daily to track my progress. In Saturday Reflections, I take time out to reflect.
I came across trading book recommendations for beginners in r/Daytrading. I’m not a day trader — not yet anyway — but what happens on the order of minutes in the stock market is similar to what happens on the order of days and months. And the human psychology that affects trading decisions can help or hurt you on either time scale.
I just finished reading Trading in the Zone by Mark Douglas last week, and now I’ve started on Best Loser Wins by Tom Hougaard. Both of these books emphasize developing an effective trading mindset rather than specific trading practices (although they do both tout the use of deciding on stop losses ahead of time).
Of all the activities I’ve tried during this now two-years-long reinvention project, trading (whether options or stocks) is the most engaging, the most frustrating, and, I think, the most likely to turn me into a vampire, in the L.A. Paul total transformation sense. Because if I am going to succeed, my mind and, more important, my behaviors must be totally revised. I must become a different sort of animal.
I’ve shared this tweet before, and it’s become a kind of north star for the aspirations I have towards changing my life via trading:
Arrakis Global makes a bunch more points about the transformation they have seen, but these first three are the ones I most want to experience.
at each moment, you can begin anew
In his book Best Loser Wins, trader Tom Hougaard reports what golfer Luke Donald told him, when Hougaard asked, “Is Tiger Woods a better golfer than you?”:
I don’t think Tiger is a better golfer than me, if you measure it in how well we putt, or how far we hit the ball, but Tiger Woods does have an amazing ability to forget his mistakes and move on.
For example, we can be on the 15th and both make a bad putt. By the time we get to tee up on the 16th, it is as if Tiger has wiped his mind of whatever happened on the 15th, and he is totally in the moment.
I, on the other hand, will still deal with the mistake I made on the 15th, and it will affect my performance on the 16th.
In trading, and maybe in life, you need to be able to forget your mistakes and move on.
If you keep looking backwards, and thinking you need to make up for what happened in the past, you won’t pay attention to what’s happening now. You’ll miss out on opportunities. Your attention will be distorted by pain you felt before; pain you need not re-experience right now.
You will judge what you might achieve in the future based on what you achieved in the past, or what you failed to achieve.
You will try to make up for what happened before, instead of coming to this day with a fresh and open attitude.
There is a lesson here for life in general, not just for trading.
beginning again
I feel bound by my past, in so many ways. Can I forget it? Forget the mistakes? And move on? Begin again? What a sense of freedom I feel thinking that might be possible.
I started to list all the things from the past that still grab my attention today, that pucker my mind up like my epiretinal membrane puckers my left macula. It made me feel so much dissatisfaction and shame, so much dukkha, to use a Buddhist word.
I don’t need to do that. The past has gone. Each moment in trading is a chance to begin again, just like each moment in life.
In his dharma talk Begin Again, Buddhist teacher Gil Fronsdal says that each day offers a chance to start again:
When I was living at the Zen monastery in Tassajara, I worked in the kitchen for a year. After a while, I understood something about practicing in the kitchen. Depending on the time of year, we had to make between three and six meals per day. There were anywhere from forty to one hundred people who would eat those meals. That’s a lot of people who won’t like you if you screw up with the food [laughs]. Sometimes the meals we made would work out. Sometimes they wouldn’t. There was always food. After a while of doing this, I discovered that I wasn’t fired, which was nice. I discovered that each day, when I woke up, I got to try again. Every day was a new beginning. That was yesterday that we burned the rice. “Oh! Today we get to try again.” It’s a new beginning. There is food left behind. It’s either in the compost or in the toilet. Wherever food goes, it’s gone. Now, we get to start again with a whole new recipe, a whole new batch of rice. The idea is starting fresh, to wake up and start again.
Of course, as a Buddhist, he suggests living in the present:
[It] is also a big burden to spend a lot of time carrying the past with us. It is a big burden to invent the future and live by it. Things can be a lot easier if we are more in the present. There is a particular way of being in the present that I have found very meaningful, which is that – probably much more often than you realize – you get to start over in the present. You get to start all over again!
The most difficult part of the past, for me, is the mistakes I’ve made. I’m sure I’ll make more. It doesn’t help me to dwell on them, though.
Fronsdal wraps up his talk:
Maybe, from time to time, you make a mistake, you have a regret, or you have some difficulty or challenge that seems too big. You can just take the next step, and you don’t have to carry the burden of the past with you. You can take the next step, and not worry so much how tall the mountain is. Just the next step. Start over. Maybe starting over will give you your freedom.
It would be crazy if, by figuring out how to succeed with trading, I were able to start living in the present instead of in the past. That would be a true transformation.