While reading Vaillant's excellent book "The Wisdom of the Ego", I came across his list of sources of resilience.
He mentions the following (I added explanation for some of them, so they are clear):
1. Attributional Style - to what do you attribute your experience? Do you take responsibility or blame the outside world?
2. Temperament - are you a cry baby? a pitbull? a fighter? a door mat? a victim? an aggressor? etc.
3. Ability to internalize social supports - do you make the best of support you experience in your life?
4. Psychosocial maturity
5. Hope and faith - is your life-outlook hopeful?
6. Social attractiveness
7. Ego mechanisms of defense - do you cope in healthy ways?
8. Absence of risk factors and presence of protective factors
10. Timing and Context
11. Self-esteem and self-efficacy - do you know who you are? do you take healthy pride in yourself? do you feel you are lovable?
What surprised me is not the items on the list, but the fact that trading is in direct conflict with many of these sources of resilience.
Hope and faith should not be a part of one's trading. Hoping can result in hanging on to one's losers for too long..etc.
Ego mechanisms of defense - these do not work in the markets. In fact, they can be quite damaging.
Absence of risk factors - trading is all about evaluating and accepting risk factors. Cannot trade without taking on risk.
Luck - luck can make a poor trader feel confident, and a good trader doubt himself.
Effectively, this means that trading undermines our natural resilience... but we need lot of resilience to trade well! It's a Catch-22.
I feel the answer lies in focusing on the sources of resilience that we do control:
- take responsibility for your attributional style. It's not the market, really. It's you.
- work on yourself, magnify your strengths and manage your weaknesses.
- get the most out of your social support (including trading communities such as this one).
- do not trade until you have a strong sense of who you are and what you're doing.
- accept risk and embrace the probabilistic nature of trading.
"...the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader." - Mark Douglas
The following 3 users say Thank You to Anagami for this post: