TRADING PSYCHOLOGY Zen And Emotional Control This occupational psychologist explains that trading combines market knowledge and emotional discipline and that through meditation techniques, a trader can develop better emotional control. by Richard D. McCall Traders in the futures and commodities markets can probably empathize with Mike Hoban, an aspiring basketball player from Strongsville, OH. In early 1995, fate dealt Mike an opportunity when his name was drawn from among millions of other contestants in the Footlocker "Million-Dollar Shot" sweepstakes. Winning the drawing entitled the would-be hoopster the right to make one potentially life-changing three-point shot during the half-time festivities of the NBA Rookie All-Star game in February. If he made the shot, he would walk away with a cool $1 million; if he missed it, he would walk away empty-handed. It was that simple. By his own admission, Mike is a "pretty good" shooter, having had his share of three-pointers in his young career. In fact, during his warm-up before the actual event, he was knocking them down with regular consistency. When it came to the moment of truth, however, his shooting prowess seemed to leave him. Despite some of the best coaching and advice available (from Dan Majerle of the Phoenix Suns), Mike Hoban's shot fell short of the rim by almost three feet, bringing a quick end to his dreams of millionaire status. Why did Mike's well-practiced shooting "system" fail him? The answer is simple and can be summarized in one word: Risk ! How can such a subtle obstacle as risk have such an overtly negative effect on the emotions, behavior and apparent skills - in other words, the inner game - of highly practiced individuals, be they basketball players or market traders? A brief examination of how we learn behavioral skills may shed some light on this subject. |
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