Challenges Outside of the Market

M

MiamiHurricanes

There are static and dynamic aspects of everything in life. For financial players the most significant may be found outside the market itself and in our individual lives (non-market related).

I have found a substantial component of achieving a high level of performance lies in the ability to maintain consistency by managing these non-market related aspects of life such as confidence, family/friends, relationships, office politics, personal financial situation, etc.

Specifically, I have been having a tough time with friends and relationships and I think that this has affected my performance...

But there are financial market challenges as well: Changes in volatility, NYSE Hybrid, degree of difficulty in generating alpha, structure/globalization, evolution of securities/instruments, etc.

For those that have a discretionary element to their trading approach, how does one assess whether it is the markets or things outside markets contributing to success or causing trouble? What are some of the best techniques for managing your outside life?
 
I think trading is not a business to you. Instead, its more of a philosophy, ideal and way of life.

When a business closes its doors for the day, the employees and managers go home. Even the owners will go home at some point leaving the business behind.

So what do you do when the markets close for the day? Do you continue to sit there and do your thing? Do you find yourself still doing your thing on holidays and weekends?

You have to draw a line in the sand. This is free time and this is business time and the two shall never cross. You allocate one bit of time to each that shall never cross into each other.

During the business time, no personal phone calls. No personal emails. Purely focus on work. During freetime, nothing business related. You focus on pleasure.

This is the advantage of those who work at an office. Once they walk out of the office, thats it for the day. When you have your life at home, your life becomes one big work day.

Quote from MiamiHurricanes:

There are static and dynamic aspects of everything in life. For financial players the most significant may be found outside the market itself and in our individual lives (non-market related).

I have found a substantial component of achieving a high level of performance lies in the ability to maintain consistency by managing these non-market related aspects of life such as confidence, family/friends, relationships, office politics, personal financial situation, etc.

Specifically, I have been having a tough time with friends and relationships and I think that this has affected my performance...

But there are financial market challenges as well: Changes in volatility, NYSE Hybrid, degree of difficulty in generating alpha, structure/globalization, evolution of securities/instruments, etc.

For those that have a discretionary element to their trading approach, how does one assess whether it is the markets or things outside markets contributing to success or causing trouble? What are some of the best techniques for managing your outside life?
More...
 
thx for the comment, BTW, it has not mattered office vs. home office - I do have trouble with the work day not ending because I follow intl markets/FX.

I do have my ringer off during market time, but do check e-mail some times (mobile device). it hasn't been that because something that happens with a friend or 100x moreso with a smoking hottie can pierce for days...

I just think that in performance orientated areas (athletics, military, financial world) this stuff can matter... whereas in a lot of jobs you can show up with a terrible attitude/distracted and skate through the day.

To clarify more, it seems like the more you want an over-the-top social life, the more you mix it up, and the more these issues can have an impact (I am not trying to be successful in markets to have a great model train collection)...

Guess I started the thread because I think sometimes I attribute variation in performance to market related dynamics when they are not really the source and it is these outside factors causing way more of an impact.
 
I can fully appreciate what you're saying from personal experience

I'm going through a difficult upheavel in my personel life (few friends, stormy love life) and it effects my confidence.

Were human beings at the end of the day. And unless we shut down our emotional side and make our lives and self image purely about trading, then I think people who have less social support - like you or I -will have a challenging time.

I'm actually refocusing a good part of my off time towards self improvement - going to the gym, reading self help books, meditating, trying to make more friends.


I suggest you work on getting a more rewarding social life - friends family, gf. Opening up to others, taking chances.

As far as trading - keep it simple until you've got a clearer mind.

My 2 cents
 
thx, it really could be any and everything as a source of distraction or trouble - and then one finds something in the market that may or may not have changed as the cause of lower performance. I think about this a lot when you look at the history of markets or hedge fund performance in '06 and recent changes in the market, etc...

RE self-improvement, sports are one of the best releases - especially since barring an exchange floor, most are likely quite stationary throughout their coverage. For me, I try to get more and more healthy and lift a lot - 2x benefit of feeling good/best shape of my life and higher confidence in social/nightlife...
 
yea, lifting is great. It has a huge impact on mind, body and spirit - like you say.

I've realised the markets are like a ink plot picture used in psychoanalysis.

Your interpretation can be as detailed or simple as you make it.

At the end of the day, the only way our interpretation can be gauged is by the size of our account.

Simple works. Why overcomplicate?

I'll tell you why - ego. Out to prove yourself to yourself. Or others.

The wheel has already been invented. All you have to do is learn how to use it.
 
Well, there are a lot of stuff you are able to do. Such as, keep your stress a minimum. Get more sleep, exercise, etc. You will eventually feel better about any situation if you do little changes to yourself every month or so.

For more, read couple of articles. They are usually on ow to mak your life better.:)

ririanproject.com
 
Quote from MiamiHurricanes:

There are static and dynamic aspects of everything in life. For financial players the most significant may be found outside the market itself and in our individual lives (non-market related).

I have found a substantial component of achieving a high level of performance lies in the ability to maintain consistency by managing these non-market related aspects of life such as confidence, family/friends, relationships, office politics, personal financial situation, etc.

Specifically, I have been having a tough time with friends and relationships and I think that this has affected my performance...

But there are financial market challenges as well: Changes in volatility, NYSE Hybrid, degree of difficulty in generating alpha, structure/globalization, evolution of securities/instruments, etc.

For those that have a discretionary element to their trading approach, how does one assess whether it is the markets or things outside markets contributing to success or causing trouble? What are some of the best techniques for managing your outside life?
More...

I can't remember the specific study but it is a fact the our personal lives (things outside the market) had positive or negative impact on our job performance.

Therefore, I will assume the same is true for traders.

The determine how much of an impact your personal life has on your trading performance requires you to keep a detailed trading diary along with a personal diary.

For example, my worst trading performances have occurred the first 1-3 trading days after returning to trading after I took some time off due to the death of a close family member.

I have a friend that has been profitable 7 out of the 8 past years of trading.

That one year of loss wiped out two profitable prior years and occurred when he and his spouse were going through a heated divorce, custody battles over their kid et cetera.

Once he got that resolved...he's been profitable ever since.

My point, some things are manageble while others aren't and you just gotta cope with it the best way you can.

I'm just guessing but I think the following situations will have a big impact on the performance level of most traders:

* Death in the family
* Marital problems
* Physical or Mental Health problems
* Financial problems
* Stress related to a scary event (ex. a trader that survived the 911 attacked)

In fact, I know some profitable traders that every one of their drawdown periods (the few they had) was directly related to something personal occurring in their personal life and had absolutely nothing to do with their trade methodology.

In other words, once they resolved the problem...soon afterwards they were back on the winning track.

One of the best techniques I think involves talking about the problems with a close friend or relative and/or asking for help.

Asking for help is tough because of being ashamed depending upon the problem.

Last resort is to get professional help especially if the impact on your trading is at the point where it risk going broke.

This is a reason why I myself put so much emphasis on the psychological aspects of trading and it helps my performance along with allowing me to quickly recover from losses in comparison in the past when I underestimated its importance.

Mark
 
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