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They say on the scorecard in golf that there’s not enough room to draw a picture, only a number. It’s true. Any golfer knows the feeling of snaking in a 30-foot putt for par after struggling the entire hole, but the end result is the same as if you had hit the green in regulation and 2-putted. Trading can leave us feeling the same way. Sometimes you haven’t stopped out yet but you’re stuck in a losing position just looking forward to the next trade when all of a sudden something good happens. Maybe it’s a market reversal or a headline pertaining to your stock which gives your trade the push it needed. Take what lessons you can from the trade, and move on to the next one. Give each hole (trade) your very best and look to learn something from it, but don’t overanalyze it. The end result is a profit or a loss, so take it and move on. You’re better off putting more analysis into a month’s worth of trading than looking at every individual effort under the microscope.

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Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Technorati Tags: Golf, Scorecard, Par, Trading, Trading Psychology

As I got more into competitive golf as a kid, I realized that all of my hard work and practice also meant that I had more on the line in a pressure situation. Whether it was the Junior Club Championship or just a friendly match with a school teammate, I realized that I needed a crutch to lean on when I got nervous. My answer was the pre-shot routine. By having something else to focus on instead of the situation, I was crawling into a shell and less concerned about what was on the line.

The pre-shot routine in golf is simply the ritual you go through before you make a swing. Watch any player on TV, from the tee box to the green, and you’ll see the same motions every time before they hit the ball. It might be the number of practice swings, the way they walk up to the ball, or how many times they look at the target. The actions themselves are not important, but focusing on that routine is.

When you’re able to concentrate on the things within your control, everything else becomes a blur. Watch the NBA playoffs - every free throw shooter has one too. It’s a safety cocoon that even traders can enter to free themselves up to perform their best. For me, my trading routine involves doing my nightly homework and setting up my conditional orders the following morning. This gives me a feeling of being prepared, so that once I get the signal to place a trade, I’m able to do it without hesitation.

By the way, subscribing to this RSS feed will mean you won’t ever miss a post!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Technorati Tags: Golf, Pre-shot Routine, Trading, Trading Psychology, NBA

The 13th hole on my home course growing up was a tough driving hole in the spring and summer. It played into the prevailing south wind with thick rough on the left and an intimidating pond on the right, forcing me to pick a very specific target to aim at in order to avoid trouble. Every day I would select the chimney of a house in the distance as my target, focusing on it alone as I hit my drive. Not only did this give me something to aim at, it took my attention away from the areas (left rough and right pond) which were sure to bring doubt into my mind. I found that I hit the fairway on the 13th as often as any other hole on the course, all because I was so specific when choosing a target. Trading with a specific game plan will have the same effect. There are countless bad things that could happen to your trade, but planning your trade and focusing on your key levels for entries and exits will help you avoid trouble and fear.

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Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Technorati Tags: Golf, Trading, Trading Psychology

Rotella has a chapter in his book with the title, Conservative Strategy, Cocky Swing. The idea is to select a conservative strategy which will allow you to confidently execute it. Trading offers many different methods to find profits (even if they’re all hard to find), so why not pick one you’ve got confidence in? Every golfer can relate to those holes which tempt you to stretch your abilities. Some holes require that you hit your very best drive in order to cut the corner, but standing on that tee box with a shred of doubt will almost always leave you in trouble! Laying up with a 3-wood will give you a much larger target, and you’ll swing more confidently. Similarly, you can trade too big for your own good, but that will likely just lead to mistakes and errors in judgment as every tick is just too expensive to bear. Back down your size a bit and approach the trade with a clearer head – you’ll find that your exits will improve drastically because you’re thinking about the process rather than the result.

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Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Technorati Tags: Trading, Trading Psychology, Golf

Bob Rotella wrote the best golf book I’ve read with Golf is Not a Game of Perfect. It’s full of great stories and lessons about how to perform at your highest level, whatever that may be. Trading isn’t about being perfect either! No matter how long you’ve been at it, no matter what your strategy, no matter how well the market is trending, we’re going to make mistakes as traders. Accepting that fact on the front end makes life so much easier! Do your best to minimize your errors, play to your strengths, and count up the score when you’re done.

By the way, subscribing to this RSS feed will mean you won’t ever miss a post!

Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com

Technorati Tags: Golf, Golf Book, Trading, Trading Psychology, Trading Strategy