Feling like a GFC victim?
Feeling like a GFC victim? Take action and take control, says Louise Bedford.
’ve always felt I would die young. I’m not sure where that thought came from, but, weirdly, it has served me well. I’ve done everything to cram as much ‘living’ into my life as I can, just in case the next breath is my last.
Many traders have turned to commodity trading and index trading to chase a win. Go where the trend lies. Without a trend, traders are lost at sea with no compass and no one aboard who even knows how to steer the boat.
There are so many disasters in the world – tsunamis, earthquakes, floods. Sure, it’s statistically unlikely that one of these events will take you out, but still… People act as though they have 300 years to live instead of 80 (give or take a decade or two).
You are a good trader if you are following your trading plan. No ifs or buts. Even if you are making a loss at the moment, that will turn around when the market co-operates once again. The fact is, you are a good trader if you have the discipline to do what you set out to do.
If you’re in your 30s now, and live to be 80, you have fewer than 2500 weekends left. Doesn’t sound like many when you put it in that context, does it? You just never know.
FIGURE 1: S&P/ASX ALL ORDINARIES
I think about this whenever I ignore something I really want to do, and instead do something I don’t really want to do. I wonder whether ‘that’ was my last chance. I’ve even started admitting that when I’m alone I eat dessert first. And I’ve been advising some of the older, wearier, members of the audiences I present to that they should do the same thing.
Is this attitude morbid? Maybe. Does it help me revel in every minute of every day? Definitely.
So, whatever it is that you are really passionate about doing, I suggest you do it. Sooner, not later. Trying to time anything right is truly beyond most of us. Don’t pretend that you’ve got all the time in the world to achieve what you want to achieve. You probably don’t – unless you do it now.
This will make the size of the problem concrete. I know this is confronting. It’s only after this that you’ll be able to start I
If you’ve been putting off learning about the share market, or even learning how to trade a particular instrument, can you really guarantee that you’ve got a ‘start date’ written down? Or are you too busy blaming market conditions for your failure to get off the couch?
Many years ago I read a terrific little book called ‘The Forgotten Secret to Phenomenal Success’. The premise behind the book is that the real secret in life is to do what you set out to do. Simple? Have you seen how few people finish what they begin? They start with remarkable enthusiasm, but then they fizzle.
Although the markets are volatile, that should not be used as an excuse for not learning, striving and stretching to be the very best trader you can be.
Let’s have a quick look at the Australian market. Frankly, in terms of trying to find any decent long trades, my macro filter has been in the ‘off’ position for 30 weeks. (My macro filter is my guide to when to trade long or short and when not to trade.) It’s anyone’s guess when the time will be right to look for trades that are trending up. And any downward trends seem to be short lived because the market is so volatile. What’s a girl to do? I adjust my sails and go where the wind blows. I don’t fight against what I’m seeing. I certainly don’t tinker with my trading plan. Most of all, though, I don’t blame myself.
Is this guy a GFC victim? The recent market activity has driven some traders almost around the bend. I thought you might like to see my reply to a particularly deflated, frustrated and irritated trader who emailed me recently. He asked how he should handle his losses, especially because he hadn’t told his wife about the extent of his losses. In fact, he hadn’t even calculated how much he had lost, because he was terrified. Here’s what I said:
"A few things spring to mind, in no particular order: • Firstly I feel you need to bite the bullet and quantify your loss.
JAN/FEB 2012 Feling like a GFC victim?
dealing with the psychological aftermath of the problem – until you know the size of the problem you can’t really take any corrective action. • Have you heard of a Morning Journal? It’s where you write for
30 minutes in the morning about everything and anything. I feel that you need to complete a Journal like this for at least a week. Ask yourself these questions and write about it in your Morning Journal: a) "Why did this occur?" and b) "Is there anything that can be done to avoid this situation again?" Just brainstorm it. Don’t judge the outpouring. Just let it flow. Leave it for a few days, then re-read it. • What to do next will be derived from these initial steps. I’m actually not a big fan of self-forgiveness unless you’ve had a chance to really examine what happened. People try to forgive themselves prematurely, without looking for the lesson. • There are so many people who have had similar stories prior to journalists, and create resources that I feel will help people reach their potential as traders.
And I play and do things just for me. Just for fun. I go to the gym, have a wine with friends, and laugh so loudly in cafés that strangers turn around and stare at me.
I’m not a circus performer. There’s little to see. One thing that you will notice, though, is that I’m completely focused on what I’m doing at any time. I work to a written list. I’m a meticulous planner. I take pride in being productive and in achieving, as well as being a caring Mum and an excellent trader.
My life is just like yours. I juggle. I rush. I get out of breath. However, I find having a plan of action for all areas of my life dissolves the stress. It helps me achieve more than the average person.
Everything I’ve said here is available to you. The only person standing in your way is you. You can achieve more, do more, and have more fun. You just need to make it happen.
If you sense that you're going round in circles but not getting anywhere, you need to make some changes. When most people realise they aren't headed towards their goals, they tr y to run faster, or they simply give up.
getting serious about trading. You’re not alone, that’s for sure. I do feel for you. I’ve been there in my past too, so I know the toll it takes emotionally and physically. It’s all-encompassing. However, it doesn’t have to be your permanent way of dealing with life. • After you’ve had a good hard look at the facts, you’ll be in a better position to work out what to do next – whether you want to continue trading, or whether you feel it’s just too much of an ask. It is painful – so to persist may not always be the best answer. Once you’ve done all this, if you’d like to chat a bit more about it, let me know." Maybe you’re in the same boat, or maybe not. Either way, I think a bit of self-reflection never goes astray.
Can I watch? People sometimes ask if they can watch me work. I always decline, because they’d shrivel up with boredom. I work in rushes. Most of the day I goof around with my kids, talking about their hopes and dreams, immersing myself in their worlds. I’m with them 100 per cent, making sure their needs are number one.
Then I trade. No interruptions. No phone calls. No one asking for my opinions. I trade with total focus and silence.
Then I look after my traders. I point out more profitable ways of approaching the markets. I write articles, get interviewed by
If you sense that you’re going round in circles but not getting anywhere, you need to make some changes. When most people realise they aren’t headed towards their goals, they try to run faster, or they simply give up.
It’s the start of the year, so take some time to evaluate where you’re at. If you’re already feeling exhausted, reclaim some ‘you’ time right now. By the time most people stop for a breather because they’re burned out, they’re far off course. Make sure your ladder is leaning up against the right wall before you begin climbing.
Louise Bedford (www.tradinggame.com.au) has been a trader for over 20 years and is a best-selling author of books on the share market. She has prepared a free trading plan template for you. Go and pick it up now by registering at www.tradinggame.com.au.
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