Mike,

A few nights ago I watched Alex Rodriguez pound two homers against Boston. As I watched, Alex was calm, collected, and observing what was being thrown at him. I wonder whats going on in his head during those moments, when he’s just waiting for the pitcher to release the ball?

“Absolutely nothing” I said. “Alex is just intently focused on the ball.” He’s not thinking about mechanics, he’s not thinking about what precise angle he must make contact, he’s not thinking about the pressure to justify his salary by delivering results when the game’s on the line. He’s not doing any of that. All this has been done in the back-end through hours of practice and psychological prepping. When he’s at the plate he’s not thinking, he’s performing.

I believe that this moment is also equally comparable to a trader who waits for his next trade. Many times as traders we sabotage ourselves because we have not internalized the process. For example, you can’t ride a bicycle if you have to mechanically focus on your balance, switching gears, pedaling, and holding the handle bar, etc…

I feel that trading should be one smooth process, not a mechanically driven chop house, where your every move is literally “thought about”. If you’re busy thinking, then you’re not performing. Maybe you can hit the point more eloquently. What do you think is going on in A-Rod’s mind before he swings the bat? What can we learn from this? How can we replicate this?

Bella Responds

All questions that involve the Yankees get preferential treatment in my inbox 🙂 . Great question! Oh, and it would be nice if the Yankees starting pitching improved when the playoffs start.

I was interviewing with Michael Martin the other day for his book. He asked me my trading thought process. And I shared this in Dr. Steenbarger’s book The Daily Trading Coach. When I am trading I want to be in a zone where I am just intaking the data. I don’t want to color the data that the market is offering me with a bias or hope that my position will trade in my favor. My mind is calm. What is the truth about the data? And if I can get to a spot where I am honest with the data the market if offering then I make my best trading decisions.

But I am thinking while I am trading. When NKE approached the 80 level after earnings I was thinking. Where should I buy? What do I want to see to load up? What if NKE drops the level and quickly rebids?  But I’ve trained my mind to consider the most likely subsets of the trade and quickly formulate trading plans. This might take all of a few seconds from beginning to end. For a newb this could take an hour 🙂 . And then I process the information the market is offering and make trading decisions. I’m not worried about being wrong or taking a loss. There is this thought: what is the right thing to do based on the information that the market is offering. When I see something that offers me an edge (this is the not thinking and performing part) then I execute.

I’m a former competitive athlete so I developed the skill of a calm mind while competing. While the market is offering me millions of bits of information every second, I have the mental skill to process the information important to me and calmly make decisions. I’m not concerned with a future result. I’m focused only on what is the right trade to make that offers me an edge based on the information from the market. But this is a skill. You’re not going to develop this skill by reading this blog or by thinking about adopting a calm mind in the middle of a trade. You will have to do numerous visualization exercises (see video from Dr. Pearlman) to develop this mental skill.

What r u thinking while trading?

Mike Bellafiore

Author, One Good Trade