Trading Angry? F#*k Yeah!

A common assumption is that a trader needs to be operating with a calm mind and relaxed body in order to trade with maximum focus and ensure peak performance.

Generally, I agree with this idea. Relaxation and positive affirmations have been some of the main tools I've recommended when asked for assistance with mindset and psych issues. And for years they have been a key part of my plan - relaxation and calming sessions prior to trading, along with breathing and relaxation routines during session and a recovery routine for when it all hits the fan and I need time out.

Now I'm no psychologist, but I'm not sure that this is always the best way to achieve peak performance.

Quite possibly it is, for most of us, most of the time.

But from personal experience I know that there are times I benefit greater from the very opposite of a calm, peaceful and relaxed trader - what I call trading angry.

It's important to realise that relaxation is not our end goal. I'm a trader! You're a trader! And this site is not YourMeditationCoach and is not dedicated to your spiritual journey towards enlightenment. Our end goal is peak performance as a trader.

We should aim to place ourselves in whatever state allows us to best maximise our performance. And while that may often be a state of calm and peaceful relaxation, it's not always going to be the case.

Other traders have recognised the need to alter their state to maximise performance.

The most famous from recent memory would have to be Don Miller's use of a fictional drawdown, as explained in his post here: http://donmillerjournal.blogspot.com/2008/07/cornerstone.html. Don has recognised a need for managing his state, and has developed an effective solution. And while I can only speculate as to the nature of his personal state, I'd imagine it's closer to that of an aggressive comeback mentality, than to that of a relaxed and calm trader. (Don, please correct me if I'm wrong!)

I suspect that if you talk to most pro-traders there will be very few who constantly operate in a calm manner. Rather I expect that most will actively attempt to manage their state dependent on the personal and market-related circumstances they currently face.

What about me? How do I personally trade angry?

My default state is one of relaxation. But there are times I purposely choose not to do that. One of those is when I find results not matching the opportunity presented by the market.

If I miss two or three obvious trades through hesitation, or perhaps scratch two or three early when it was not warranted by price action, then my relaxed state is obviously not helping and it's allowing decisions to be influenced to some degree by a fear of loss.

Upon recognising this, it's time to first ask myself what exactly I'm fearing and why; secondly to write that down (it's great information for later review); and thirdly to then work to change my state to one of more focused aggression, which allows me to more actively engage the market while still remaining risk aware. It's time to trade angry!

Trading angry for me is not loud yelling and abuse and smashing keyboards - it might be for you. For me it involves the following quick changes of state:

• Physical

  • Get the blood flowing through a short sequence of high intensity exercise, such as shadow boxing.

  • Follow this with five deep and slow breaths

  • Give myself a high-five (nothing builds instant confidence like a high-five!!)

  • Return to the trading desk, but ensure I remain slightly uncomfortable through the following methods:

    • Sitting on the forward part of the seat only so that my back is not supported by the backrest and my arms are not supported by the arm rests

    • Keep my back erect

    • Lean slightly forward into the screen

• Mental

  • Establish a F#*k You mindset. Apologies for the swearing in the title and on this line, but no other word describes the mindset quite as accurately.

    • I invoke anger at a particular person from my past who wronged me in quite a significant way. Forgiveness is great, but I'll save that for sometime in the future. Right now, I find this anger a great source of motivation.

    • Sometimes (but not always) I put on some punk and hardcore tunes. Maybe a bit of Frenzal... http://www.youtube.com/watch?v=6_BTtpupOCQ
      

• Maintenance of State

  • I find I regularly need to get up for another quick energising exercise session. Maybe that's just me though?

I'm hyped up and energised. It's time to take action and engage the markets (again I stress... with awareness of risk and session drawdown limits).

So consider the state that leads you to greater performance in different circumstances and market environments.

• What state do you need to be in when faced with a slow and sideways market?

• What state do you need to be in when faced with a fast trending market?

• What state do you need to be in when faced with an intra-session drawdown?

• What state do you need to be in when faced with a multiple session drawdown?

• What state do you need to be in when faced with a new intra-session P&L high?

• What state do you need to be in when faced with a new account equity high?

• What state do you need to be in after recognising hesitation?

• What state do you need to be in after recognising overtrading?

As a default, or if you're unsure, I always recommend a state of calm relaxation.

But with experience you may find something better.

Don't be afraid to try it.

Common advice is not always the best advice.

Sometimes anger can be used as a great motivator and a tool for focused engagement.

Lance Beggs

CAUTION: Self awareness is essential. This is all about getting in the optimum state for peak performance. If anger is causing overtrading (excessive low probability positions) and results are not forthcoming, then it's not the right state. Step away and reassess.