Blog / Freedom
Freedom
In the public universe we can read a great deal about trading, technical and fundamental analysis, but one extremely important point is not getting enough attention.
That is FREEDOM, freedom to trade. Freedom to trade well.
For the most part it is about mental freedom.
For this reason it is very difficult to specify the requirements for mental freedom, as it is not directly measurable.
Each market participant have different tolerance during suboptimal mental freedom periods.
There are a lot of material requirements to participate in the marketplace competitively, like a good office, reliable trading hardware and software, good brokerage, well funded brokerage account(s)….
We might have great trading experience, great strategies, and other supporting systems, but if the COMPLETE MENTAL FREEDOM is missing from our market participation, than it might have very serious effects on our results.
A trader, who considers trading as a business, a job, need to strive to reach as high level of mental freedom as possible.
The more intuitive your trading and the more frequently you trade the more mental freedom is required while those, who participate in the market through semi-automated or fully automated trading systems, might see less performance degradation if mental freedom is suboptimal.
Some of the aspects that contribute to mental freedom as examples:
- Our wealth, and change in our wealth in the recent past.
A freshly retired market player, who lost 30 – 40% of his / her wealth due to decreased housing values and lost retirement accounts, will definitely feel these impacts during trading and will not accept high level of risk or take only minimal risk or nothing at all.
- Illness. If we get a cold, which leads to temporary fever, we might lose focus during trading hours. At least we know, that the effects will be temporary.
But if we get serious illness or a loved one, a family member
or very close friend get
serious illness, which lead to irreversible conditions, than it is
highly recommended to top trading during these periods or take
action, before we completely wipe out our brokerage account.
- Work, work-related conditions (If we happen to work besides trading) Stress during other work will drain our mental energy level and depending on the situation will play its effect out on our trading performance.
- Support from others, like family members, friends, colleagues..
Every people have different priorities.
Highly successful trading requires a lot of dedicated time to maintain our edge over the long-term. Trading is a Marathon game. You will need the mental support of others if you really want to get there. Isolated genius might not even reach profitable status level in this game. Strive to build your support people even before you jump into the deep waters.
- Current physical and mental condition.
Like the markets, people have biological cycles. Try to reach a generally good mental and physical fitness level. Yes occasionally we can be tired, fatigue, less focused, bored
that will cause weaker trading performance.
The higher level of self-control, you can attain during Your trading period, the higher profit potentials can be reached.
- Beliefs and self confidence.
If You do not believe that you first can become a successful trader, and than maintain and increase the performance during the trading career, than better to STOP trading NOW. This is the absolute prerequisite of successful market participation.
Yes, after trading successfully for X years we might still lose our edge, or our performance might degrade for many reasons. Having a mental freedom will help us overcome difficult periods.
- Bad, unsuccessful previous market experience, difficult trading periods with hard to bear
drawdown or losses.
Again, these are usually temporary setbacks for those, having
all the necessary prerequisites and the mental freedom as the
most important requirement of all.
For the really successful pro trader the daily job is not over, when the market closes.
As for any top performer, all of the other life activities, and relationships will contribute to the final results of market participation, either positively or negatively.
For this reason a trader need to consider the whole life a bit differently, where the actual trading time is only those limited hours, when the markets are open, when he / she performs the job, the art, the mission…but all other time, spent outside of the markets will also count, impact our results.
As one of my friend, Brett Steenbarger, a great educator and trader coach once mentioned:
“Trading is the celebration of freedom.”
Enjoy Your Trading.