Concentration Game

In my previous article I briefly mentioned concentration and spoke about how we become mesmerized on one indicator waiting in vain for a positive signal to generate whilst we ignore the others which could be pointing to a more negative outlook than what we would prefer.

Concentration is quite tricky to deal with. It requires you have the right balance between being passionate about something and being overtly obsessive around it. The way in which I like to compare it to is seeing concentration as a microscope, magnifying the smaller parts of an entire form of matter.

But quite often we get stuck with this. We've all experienced it once in our trading journey, for most of us it’s happened at the beginning when we were still gullible to the scrupulous dealings of sales people claiming that you, without any experience or knowledge of financial markets are able to master it within an hour of reading one guide.'

Our concentration is not focused on the amount on the skill but rather the monetary reward at the end of it. We sublimely assume this to be the truth and convince ourselves of the bags of money we going to packing away in a relatively short period of time. Rubbing our hands together, we couldn't think of an easier way of creating money.

However reality sinks in quickly when we start incurring losses we weren't expecting to accumulate.  How could something which is portrayed so effortless be so much more problematic? We start drawing negative inferences from these experiences and begin to perceive ourselves as inadequate and begin a long downward spiral of confidence deconstruction. Eventually the after effects spill over into our daily lives and all the good stripped away.

What we've done here is focused on one indicator, money. By using money as our indicator of success we have allowed ourselves to become susceptible to this draw down process of our own emotions. We will continue this process until we reach a point where we understand that money should come secondary in the journey to profitability and skill set should take the front seat.

Take a look around at all the successful people in the world. They will tell you the countless number of hours, days and years they spent committed to their skill only to reap the rewards much later. They didn't produce it with the intention of becoming the world’s richest person; they did it because they were passionate about the field they were in.

A great example is Steve Jobs, former CEO of Apple. From a young age Steve wanted to change the world by using technologies to make life easier.  Starting from humble beginnings in his parent’s garage building the Apple 1 right to the last product he saw through, he dedicated his life to changing the world.

His meticulous attention to detail in his products makes Apple brand the most sort after products around in the world. He would breakdown every component of his products and designed it individually and made it fit perfectly until every component made the complete package.

Steve knew he was going to change the world but he didn't quite expect how big of an impact he had on the face of technology in the 21^st century.

Trading works on the same concepts, we have to breakdown every aspect we wish to master and conquer them individually. Instead of concentrating on the monetary gains, try focusing on building the skill of understanding what makes a market tick. Which indicators work in different market conditions, how well do they work, when do they work, the advantages and disadvantages and how to apply them. These are just a few things you should try to concentrate on.

When we concentrate on making money the emotions of fear and greed take hold and steer our trading results in the direction of which ever emotion is prominent. When we are emotionally distressed we tend to react more on impulse rather than rationality making us prone to making mistakes.

   

I've witnessed personally in my trading when I use to think about the money side of things how I acted more on emotions rather than using my skills I’d built on.  But I decided that it was time to concentrate on the important things, my ability to trade better. No matter how long it takes me, I have a goal in place and that’s to become consistently profitable, but in order to obtain this I need to attain a strong skill set to reach it and until such time I would regard my goal as incomplete and in progress.

When last did you focus on a particular aspect in your trading process? Instead of heaping it into a pile and procrastinating about the day you going to deal with them, take it one step at a time, committing enough time and practice to master them individually.

If you would like to contact me you can through my email at cadetrader@gmail.com or if you wish to follow me on twitter and get the latest updates of news, interesting commentary and general trends in the market, my twitter handle is @CadeTradeR if you follow this link it’ll take you directly to my twitter timeline: https://twitter.com/CadeTradeR

 I've been receiving great feedback over the last few weeks and have enjoyed sharing stories with fellow traders. Don’t hesitate to comment I really appreciate it.