Welcome back! In the last post I talked about how, since everything you experience provides a mirror image back of yourself, you choose the experiences and people that provide you the best self-image. This week, I’m going to talk about how, when everything you experience competes for your very limited focus, you choose what to focus on, and how that focus can guide you towards better decision making as a trader.


This post is part of a series on Brett Steenbarger's The Daily Trading Coach
View all posts in the series here.

Lesson 7: Change Our Focus

Dr. Brett kicks off this lesson with a simple sentence that encapsulates the entire crux of the matter:

…if you wish to change the doing, you must change the viewing.

He follows this up with an example from his trading, where thoughts of his negative PnL for the week distract him from his plan and ultimately lead to small profits, rather than the larger profit he would have received by following his original plan. I’ll add to that a similar lesson from my own recent life.

I’ve been playing guitar since I was fifteen (so, almost 20 years now), and often I’ll find myself idly picking up and noodling while reading or browsing the internet. A couple of years ago I started studying Classical Guitar with a teacher, and much more of my time spent playing guitar is more focused practicing. But sometimes I’ll experience something during my lesson similar to Dr. Brett’s trading session. Maybe it’s not my best playing of a particular piece, and as I’m playing I’ll start to think more about that than the piece itself. If it’s a piece I’ve been working on for a while, I’ll have it close to memorized, and I can continue through on muscle memory while my active brain starts circling all the mistakes I’ve made. And, unsurprisingly, that leads to more mistakes. Which leads to more thinking about the mistakes. And you can see where this leads.

It’s the same issue as Dr. Brett describes. You get so caught up in thinking about what you’re doing that you get in your own way as you’re trying to do it. There’s a saying that’s been paraphrased down through the 20th century that goes to the tune of “those who say it can’t be done should not interrupt those who are doing it.” Which becomes especially difficult when both of those people are you!

So how do you get yourself out of your own way?

You need to recognize what triggers that part of yourself. For Dr. Brett in his example, it was thinking about his PnL; how he had traded earlier in the week, and this distracted him from how he was trading in the moment. For me and my guitar lesson, it’s getting hung up on wanting to play well — especially in front of my teacher — or frustration from knowing that when I practiced that piece earlier in the week, it sounded much better. These sorts of strong feelings, that tap into and weaken our sense of self-worth (see last week’s post for a deeper discussion of this), take us out of the moment, and drain our focus from what we need to be concentrating on, whether it’s managing a trade or getting to the end of a guitar etude.

Recognizing these triggers is the first step. The second, and much harder step, is to learn how to manage them so that they do not interfere. Through our own personal combination of nature and nurture, we have ingrained response patterns to certain stimuli. At some point in our history as a species, these response patterns would truly have been the difference between life and death. But in the 21st century, fewer of us face those sorts of challenges on a daily basis.

This is not to dismiss fear and anxiety as illogical emotional responses in some situations. But it is to caution that just because a sudden trend reversal in a stock triggers your fight-or-flight response, you do not need to react to it in the same way you would if that response were triggered by the sudden appearance of a tiger in your office (yes, I have been watching Tiger King, why do you ask?).

So what’s the solution? Now that you know a certain emotional response is a trigger, instead of letting yourself get swept up in its current, you work towards simply observing the response, recognizing it, and letting the current carry it (and not you!) away. Of course, like all of the coaching lessons that Dr. Brett gives, this is much easier said than done. As I’ve said before, if this were easy, trading coaches wouldn’t need to exist, or publish books. Clearly that is not the world we live in, because here we are, trying to improve ourselves with Dr. Brett’s help.

So how do we coach ourselves towards this goal? In my last post, I quoted Dr. Brett as saying

You cannot eliminate losing days, but there should never be days that leave you feeling like a loser.

In this week’s lesson, he follows up on this thusly:

Negative thoughts are inevitable; the question is whether you buy into them.

So, as we begin our self-coaching, the first thing we need to understand is that our goal is not to eliminate these distracting thoughts. To aim for that sets us up for failure, frustration, and a whole new set of intrusive thoughts. Instead, as I said above, our goal should be to practice being an observer of these thoughts, rather than a participant. Rather than try not to have these thoughts at all, you should aim for being able to recognize them, but not get caught up in them. Just acknowledge them, let them pass by, and get back to doing what you were doing. Higher profits and better performances await us all.

So, how to do this?

Same way you get to Carnegie Hall: practice. Since reading this lesson I have found myself making the effort, while practicing, to notice when I start to get distracted. Sometimes it’s because I’m not playing well, sometimes it’s because I’m playing from muscle memory, and my mind starts to wander. Sometimes I can quickly tell myself “now is not the time” and refocus on what I’m playing. Sometimes I can’t, but that’s why I practice this every time I practice guitar.

Dr. Brett suggests a meditation practice in which, once you have achieved an initial state of calm, you deliberately invite these kind of distracting thoughts in, and practice noticing and dismissing them without letting them take you out of your calm. I am still working on building a meditation practice for myself, but I have started to try this when playing guitar: deliberately letting my mind wander, and making the conscious effort to refocus on the music. As I said above, it works some of the time, and hopefully will begin to work more of the time as I continue.

I have also found value in another of Dr. Brett’s suggestions: take a time-out. I’ve found it helpful, when I reach the limits of my current ability to control the thoughts, to put my guitar down and do something else for a little while. Whether I practice calming techniques deliberately, or just let my mind focus on something else, when I come back to the guitar it’s easier again to focus. While it can be hard to convince yourself to take a break in the middle of the trading day, by actively practicing this, and pairing it with calming techniques, you can avoid costly mistakes and begin to grow more skilled at observing and dismissing intrusive thoughts as they come.

We will never achieve perfection. Not as traders, not as guitarists, and not as people. But we can still set our aims high and work towards them, 1% at a time.

Thanks for reading! If you have any questions, please reach out to me on Twitter: @mikowitztrader