Patience

Patience has always been one of my biggest problems...especially when it comes to trading.

It takes patience to let what's working, work. I've always had trouble balancing my long-term goals of "trading success" with my very real short-term needs to make money to pay bills.

Recently, I've had success in the markets. I am earning very respectable percentage gains that if left to continue compounding, will in the long-run amount to a tremendous fortune. Of course when this happens, my natural tendency is to want the long-run to hurry up and get here as fast as possible. Naturally, this is not possible, and this is where I usually run into problems.

They say the first step is "admitting I have a problem." So this blog post is my effort to throw my recognition and acceptance of this problem out to the universe. Now, the next step is to learn to practice patience. Keep my head down. Keep plugging away and duplicating what I know is working. Make it as automatic as possible. Focus on the process, not the results. The results must take care of themselves.

The other tactic I am beginning to practice is visioning that I've already achieved my goals. Allowing myself to experience what it would feel like to already be there. In which positive ways would my life be different? Imagine it. Feel it. One amazing result I've had during these mind games is to realize that in a lot of ways, I'm already living it. Maybe my money clip doesn't reflect it. But my attitude, and the way I spend my time does.

In two completely unrelated notes:  I recently joined Toastmasters International, a public speaking and leadership development program. I give my first speech tonight. Basically, just a 4-5 minute introduction to who I am and what I hope to accomplish in the program. I'm nervous, but also strangely very confident.

The other note is that the little contest I'm having with myself is off to a great start so far. You can read about it here.

Activity =/= Profitability =/= Success

A lesson I've learned repeatedly throughout my trading career is: Do not confuse Activity or Action with Profitability.

Too many times in the past when I've struggled, my natural response was to DO MORE: More action. More activity. More analysis. More study. More volume. More more more....

And while perhaps short term the results were favorable or encouraging, long-term the results would inevitably be the same: FAIL - back to the drawing board.

Recently, I found myself defending against my natural impulses again to DO MORE. Nearly all my September options positions have drawn to a close - with good results. (As soon as my last September positions are closed, I will post the results). But I find myself trying to tweak my well designed system.

I see that I have had great results in the past 6 weeks, but I worry that perhaps I'm tricking myself because the market pretty much fell asleep (which is good for options income strategies that maximize profit when the market goes nowhere). I've had great success targeting 30 - 40% gains in my positions. But I'm asking myself: "Did I get lucky?" "Am I being too greedy?" "Should I target 10% position gains instead - aiming for a high percentage of wins?"

To this point, I've successfully resisted the urge to tinker with my system. It's worked so far, don't mess with it. Let it prove to me that it needs to be fixed first.

The best way for me to fight these urges is to fill my day with other activities. To this end, I've been pretty successful. The beauty of my trading strategy is that it doesn't require me to monitor the market while it is open. So, I've used this time to immerse myself in the vast interweb of amazing knowledge, education, and insight within the blogosphere. I've also gotten involved with a start-up restaurant here in Chicago, as well as networked with some others in the Chicago trading scene to investigate opening a trading office where I could get involved in trader education, recruiting, risk-management, systems development, and mentorship - something that has always interested me.

I also have been reading books a lot more recently, which is a good escape - especially when the topics being read are educational, personal improvement, or inspirational in nature. It helps keep me focused and grounded.

It has often been said that in trading, the hardest part is "sitting on your hands and doing nothing". And this is in most cases the most profitable approach. I need to remind myself of this, and writing this post is one way I've helped remind myself of it's importance.

Stay focused on the long-term results. If I can continue to earn 5-10% returns each month - does it matter how much activity it required to achieve it? Does it matter how many trades I did, or how many hours I stared at a trading screen? NO.

The only thing that matters is the bottom line.