The Overanxious Trader

BellaGuest Blog2 Comments

I was reviewing a monthly review from a mentee, Shark (sometimes Shark Daddy or Sharkalicious or Shark Shack), that I thought could use the thoughts of Dr. Menaker, trading psychologist.

Shark wrote:


Too excited on days I want to do well. I force too much. I had such high expectations for myself coming into earnings season that I started to force things. I didn’t let trades come to me. I was too jumpy. I was too eager. I wasn’t selective enough. Oftentimes I write too many tickets and don’t select bigger picture plays that will actually pay me. I think this happened a lot where I would write a bunch of tickets and end up breaking even on a lot of days after fees.

Here is Dr. Menaker’s response:

Whenever a trader mentions performance expectations, I take notice. Of course, we all want to do our best, and some of us perform best when facing a challenge, like a clutch-performing athlete in a way. But trading is a bit different.

Having expectations is not a problem per se; it’s what we do with the expectations, and how we respond to the expectation that is critical. The issue here for some people is that expectations can become “demands”. For such people, these demands become internal demands, narrowing one’s field of awareness and easily translating into a rigid mindset. A rigid mindset is a dangerous mindset for a trader; we need flexibility and patience, not rigidity.

Another possibility for this trader is that writing too many tickets, or overtrading is simply a way to justify oneself and deal with performance pressure from high expectations or internal demands to perform. In such a case, one needs to learn to tolerate the discomfort that comes with performance pressure. Many people will try to escape the discomfort by “doing something”, like getting into a marginal trade. But that rarely does the trick and often leaves you more frustrated in the end. Learning to be patient, to wait for the fat pitch, is one of the most important skills a trader can have.

Patience is not simply the ability to wait; it’s the ability to have the right attitude while waiting.

You can be better tomorrow than you are today!

Mike Bellafiore

One Good Trade
The PlayBook

No relevant positions

2 Comments on “The Overanxious Trader”

  1. I do what Dr. M. and Shark describes too.  On days I am anxious to trade but can’t find a trade for a long period of time, I feel like I should be trading because that is how I earn my living.  So I overtrade.  I actually can do quite well on days when I have low expectations due to market conditions.  I don’t expect to find any trades so it is easy to be patient and sit.  I’m glad Dr. M. pointed out the dangers of a rigid mind-set when you have high expectations.

    But if I dig myself into a hole, I can really zero in on my focus to dig myself out of that hole.  So anxious to trade creates one set of behavior (overtrading without patience) and anxious to change red to breakeven or green creates another set of behavior (narrow focus).

    I used to think of patience as a character trait (he’s a patient person) but now I think of it as a behavior that comes and goes.  Real patience comes from relaxed concentration IMO.  I’m still struggling with identifying when I’m exercising real patience and when I’m only exercising strict will power not to overtrade which is not nearly as effective.

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