“For most of us, the task of beating the market is not difficult, it is the job of beating ourselves that proves to be overwhelming….” – Martin J. Pring
In Part 1 of this series, I discussed Structure as being an essential applied element of being a successful independent trader. Like any successful business, having a well defined plan and structure is a necessity and we must see ourselves like a business in the context of our trading. The structure one creates is not static, but a creative and ongoing process in response to our evolving goals and methods.
When one operates in the public workplace, structure is already in place and you are held accountable for handling your job. It is quite another matter when one chooses to become an independent trader who has to develop and create a new structure and manage oneself with systematic discipline.
If you’ve already begun the process of creating your structure you’ll come up against a variety of patterns, some quite toxic, that are holding you back in your business life. Thus, how we manage ourselves as individual traders with personal integrity becomes the next critical issue.
Seasoned trader Martin J. Pring observes:
“For most of us, the task of beating the market is not difficult, it is the job of beating ourselves that proves to be overwhelming… Success based on an emotional response to market conditions is the result of chance, and chance does not help us attain consistent results. Objectivity is not easy to achieve because all humans are subject to the vagaries of fear, greed, pride of opinion, and all the other excitable states that prevent rational judgment. We can read books on various approaches to the market until our eyes are red and we can attend seminars given by experts, gurus, or anyone else who might promise us instant gratification, but all the market knowledge in the world will be useless without the ability to put this knowledge into action by mastering our emotions.”
I would define “mastering our emotions” to mean our ability to manage and hold ourselves accountable for what we say we are going to do and not do. It is managing our weaknesses and strengths from a position of integrity, as integrity is the foundation on which successful businesses are built.
As independent traders, it is crucial to say what we mean and mean what we say. Integrity is keeping your word, and, to the degree that we lack integrity, our ability to perform successfully in our trading will be compromised. For example, our rules might prohibit random/impulsive trades, impatience, doubling down, focusing on money alone, etc…, yet we can’t seem to abide by our established guidelines and self-imposed rules. Therefore, a precondition for being a good to excellent trader is to enhance our integrity. Indeed, some would say integrity is a precondition to wisdom itself — and what trader doesn’t need that!
If one is able to follow the rules and structure they have created they are said to be in integrity and will provide the possibility for optimal performance. It must also be pointed out that having integrity does not guarantee success. Yet the lack of integrity, the inability to honor what you say you are going to do and not do, your inability to follow through on your commitments you have made to yourself, will have negative consequences on your ability to perform well and achieve your goals.
None of us have perfect integrity. However, there are creative techniques to manage those weaknesses that are ruining our trading and profitability. In the next week or two spend some serious time looking at your strengths (what you do well) and your weaknesses (those areas that are keeping you from being the kind of trader you would like to be) and write them down. Said another way, take a look at where you are in integrity and where you are out of integrity.
In Part 3 of this series we will look at practical and specific ways to handle what appear to be unmanageable weaknesses and ways to maximize your strengths.
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