Is being POISED necessary for achieving high performance in trading?

Once again, POISED is a balanced state of readiness to act in one's own best interest and function in the service of performance values regardless of shifting thoughts and emotions.

The Pre-trade routine is the first component of POISED and is likened to the pre-shot routine in golf, it is deliberate, sets in motion a sequence of repetitive actions that helps a trader SEE opportunity, FEEL confident and TRUST their ability to execute at the right time. Preparation for a trader can include items such as a healthy breakfast, physical exercise, positive thinking or meditation practice, overnight market research, reviewing economic data releases, preparing potential trade scenarios, clarifying a daily execution goal and some form of emotional regulation routine.

Poised traders we coach enter their pre-trade perspectives into a digital document or shared calendar to enhance accountability, tracking and follow through with written insights. We’ve come to experience that if it’s not written or recorded somewhere, a trader can’t track what he/she did, and more importantly, they miss out on an ingredient of deliberate practice that supports development of expertise, namely, reviewing the path to making errors.

Our rationale is that in order to grow the mental muscle of confidence, we need the trader to do relevant tasks that demonstrate to themselves that their “walking the talk.” We’ve used Google apps, specifically the calendar and document applications that allow not only the trader to record and track progress, but when shared, allows a supportive coach to monitor and motivate dedication to the process. For example, traders can easily cut and paste pictures of charts with text and support/resistance lines into a online document for a richer collaborative experience, and even print it out and place it near their computer to help them adhere to their plan.

One trader experienced tremendous benefit from the pre-trade routine process by developing a market narrative on five different markets each day. He would rank the potential opportunities in order to help him scale his trade lot sizes ahead of the day. This enabled him to execute more efficiently when the scenario in his narrative took shape.

Another tool in the pre-trade box traders have used is heart rate biofeedback to train themselves in the art of emotional risk management. This software visually displays a chart formation that is similar to what a trading software program depicts. It provides a concrete representation of their emotional coherence (i.e., optimum state of readiness to execute decisions). By doing this for five to twenty minutes each day, a trader develops excellent self-regulation skills that assists them in beginning each day within a known and acceptable emotional range.

As you can see, getting prepared for the trading day takes sustained effort. It happens for an hour to two before the first trade is ever made; and can be likened to stretching before and after you go running. The best traders and algo systems are ready to take your money right now, thus, a trader needs to be at their peak state of performance prior to the open. POISED is not an option, it’s a necessity!

Do you believe a pre-trade routine (P) in trading is necessary for realizing consistent profits?

Poised 2 Perform: What does it have to do with trading?

Even Keel, a.k.a. POISED 2 PERFORM, is a trader-tested performance system that when deliberately practiced, prepares a trader to better navigate uncertainty and manage the challenges of opportunity. Poised, is a balanced state of readiness that enables a trader to execute coherent decisions with efficiency and confidence.

In future posts, we will be sharing a brief overview of how to organize your trading process via the POISED structure to help you think through and bring shape to your own performance routine. Our upcoming book will provide a more in-depth account of this structured, yet flexible, learning process, and its impact on enhancing a traders psychological competence and ability to secure consistent profitability.

Dedication to continuous learning, like the rising and falling of ocean waves, is the driving force behind a traders consistent performance improvement. On a daily basis, traders we work with review their decision making process to sharpen their edge and prepare themselves for the next days opportunity. This process of readiness, regulation and review, is a circular feedback loop aimed at keeping a trader even keel and moving closer toward opportunity. 

The POISED system was developed in Chicago, real time, with real traders, on real markets with real money. We engaged traders in daily dialogues during and after market hours employing collaborative web-based technologies that enabled traders to access subtle nuances of their moment-to-moment decision making.

The rationale that supported trade execution and risk management became the mental practice field where new thinking and refined strategies were born. It became evident to us as coaches, that through deliberate mental and behavioral routines prior, during and after active trading, a professional trader can consistently grow their confidence and decision making prowess to secure proportionate and stable profits. 

Next post: P (Pre-Trade Routine)

Training Components for Elite Traders

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Being an Even Keel Trader

Poised 2 Perform from Ken Celiano on Vimeo.

PSYCHOLOGICAL CAPITAL: The Mind of a "Hopeful" Trader

Being a successful trader requires enduring the absurd and unexplainable! During my academic days, I read The Myth of Sisyphus by French philosopher Albert Camus. It was a poignant depiction of a figure in Greek Mythology named Sisyphus, who was condemned to repeat forever the same meaningless task of pushing a boulder up a mountain, only to see it roll down again. One can conclude that Sisyphus' existence was one of futility; the experience of being chronically ineffective and lacking any measurable success. 

In my daily dialogues with professional traders, I've heard the voice of futility countless times. However, those that found a way to endure the temporary despair of markets rolling over them, seemed to possess important qualities of mind that helped them transform futility into hope and eventually positive returns. In this post, I will highlight a few of the ingredients of how to grow this Psychological Capital called hope. My hope, is that you use the knowledge to inoculate yourself from suffering the fate of a Sisyphus. 

Hope is defined as a positive motivational state where two basic elements - successful feeling of agency (or goal oriented determination) and pathways (a plan to achieve those goals) interact. Cynicism and doubt, the polar opposites to hope, are the usual states of mind that grip traders facing a long series of losses or a neutral or worse, negative equity curve. It's tough to sustain hope when the brutal facts tell you you're a Sisyphus (a trader getting rolled over by the markets again and again...).

Questions to consider 

Are you strong willed? Are you determined to achieve your goals? Do you feel you are in control of your own destiny? Can you go relentlessly for hours, days, or even months until you have accomplished what you set your mind to do? Is it difficult to distract you away from your targeted endeavors?

If your answers are mostly "yes" then you exhibit the willpower component of hope.

However, having such will is necessary, but not sufficient. When the way is blocked, you must also know the pathway and alternative pathways to carry out your willpower. You have to have the willpower and the pathways (i.e., the "way") to have a high level of PsyCap called hope.

Thus, you must also answer affirmatively to questions such as: Do you proactively determine your way to accomplish your goals? Do you tend to figure out and evaluate alternative paths to the same destination? When you're challenged, or when your efforts are frustrated with obstacles, do you invest in tactics that can circumvent the obstacles? Do you engage in deliberative practice routines prior to live trading that grows your psychological flexibility to make rapid adjustments when market conditions suddenly change?

If your responses to these general questions were mostly affirmative, you likely have enough hope to endure temporary adversity on your way to profitability. Those less hopeful traders need to work on their inner market components of willpower and/or pathways to action. In my experience, traders prone to hopelessness, cycle negative beliefs linked to historical losses and the poor decisions that guided there outcome. These defeated traders are increasingly prone to engage in superstitious thinking that grows the grip of cynicism and doubt. Thus, they come to dis-believe in their ability and project this apparent truism outward into the market only to have it return confirmation via taking their money over and over; a Sisyphus in the making. 

Successful traders are inherently hopeful as they positively anticipate making more and more money. Over time however, this positive expectancy can deteriorate if they don't manage losses smartly or sustain the belief about themselves that they are a good "manager of risk." The belief "I'm a competent trader." because I make money can shift quickly for some, into "I'm an incompetent trader." because I can't make money consistently. There is tremendous dissonance that occurs when a struggling trader holds two incompatible thoughts side-by-side; a war ensues in the mind that gives rise to distortions of thinking that negatively impairs decison-making and emotional regulation. 

I have witnessed defeated traders align with the beliefs "I just can't make money," "I can't get a break," "No matter what I do, the market just takes more and more." They become desperate, like Sisyphus, seeking to get that boulder to the top, to confirm "I can do it!" At Even Keel, we work with this type of hopelessness in a very delicate, yet direct manner by challenging traders distortions of who they think they are. Our coaching interventions help work through their resistance to accepting a psychologically healthier view of themselves, and gets them to divest interest in being a Sisyphus. Working with a traders belief system is a necessary component to enhancing overall performance. Unfortunately, traders invest to much attention in the outer market of price, volume and time; the result can lead to futility, hopelessness and a waste of time especially when expected returns don't add up. 

So where's a trader to go? 

We suggest, to the inner market of their mind. But the noise of the mind like that of the market needs the right context to make sense of what's happening so they can eventually take advantage of opportunity. Psychological capital is real and needs legitimate focus in the development of serious-minded traders. Markets are put into profiles for a trader to navigate effectively. Similarly, strategic dialogue employed by a trader coach can help contextualize the mind of a trader so they come to see how mental distortions temporarily take them out of the opportunity flow. Without this investment in self-understanding, trading can become a hopeless pursuit just as futile as Sisyphus pushing a boulder up a hill only to have it roll back down again and again...

Remain Hopeful ~ Coach Ken