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  The first post in this series took a look at how one of the greatest challenges to our trading psychology comes from failing to navigate the process of expertise development.  Too often, traders put their capital at risk before they have properly undergone a process of learning grounded in deliberate practice. In many performance fields that learning process continues throughout one's career .  As soon as a surgeon masters surgical techniques, new approaches to surgery (microsurgery, robotic surgery) come along and promise better outcomes.  That means that physicians always participate in continuing education, updating and upgrading their skills. Similarly, in business, consumer interests, needs, and demands are ever-changing.  As technology changes, what consumers wanted yesterday (high performing cars) ends up being very different from what they want today (electric motors) and tomorrow (self-driving vehicles guided by AI).  The successful business thu...

  There is a common assumption among traders that if they are falling short of their performance expectations, it must be because of their mindset.  If only they can maintain a positive mind frame, the thinking goes, they will be able to succeed.  There is an element of truth of this, and there is an important sense in which it is seriously misguided. Research suggests that, when we are in our best frames of mind--and especially when we are operating with optimal well-being--we will be more productive and also more creative.  We will engage in our best trading when we are trading consciously , with what I have called a high mental Sharpe ratio .  The right kind of trading interests us, gives us energy, and doesn't deplete us.  The positive mind frame is both a contributor to good trading, and it is also the result of good trading.  Importantly, the proven change methods of psychology can help us find, not only positive emotional experience, but a deep...

  A heroic life is one driven by a noble purpose, an all-absorbing sense of mission.  Past posts have asked the question, " What is the Path to Your Greatness ?" and explored what makes for greatness in life and trading .  When we think of life's heroines and heroes, we inevitably focus on people whose lives have been devoted to a noble purpose and who have persisted in the face of challenge to accomplish things that make the world better.  Not all obsessions are paths to greatness--plenty of traders become obsessed with the ups and downs of markets but never invest in the skills, tools, and processes that would build their mastery.  It is difficult to imagine a great life, however, that does not have an overarching sense of mission that becomes a singular focus and theme.  A great life cannot be lived randomly or comfortably.  It has to be mission-driven, in which activity is organized around constructive purposes and challenges. As Ayn Rand pointed o...

  Back in 2014, I wrote about the Momentum Curve and how it is useful in visualizing market breadth and strength/weakness across different time frames.  It's almost nine years later and I have maintained the Momentum Curve database.  The dataset goes back to 2006 and captures the percentage of stocks in the SPX universe that are above their 3, 5, 10, 20, 50, 100, and 200-day moving averages.  I then look at what the market did going forward, from 1 to 50 days, following various configurations of the curve. In June, I will be participating in my first webinar in quite a while, as part of the TraderLion conference.  The session will be a group coaching session, in which attendees can bring in their questions and challenges and I will respond with best practices in evidence-based psychology and among successful portfolio managers.  Preceding the coaching session, I will review the Momentum Curve and its application to the present market.  This will offe...