Thinking Man’s Trader Suggested Ideas from Dr. VanTrap plus online test.
The first three areas prevent traders from ever starting (or finishing) the development of a trading system. These include computer/technology phobia, procrastination, and being overwhelmed by the whole process. The last two problems tend to prevent the trader from coming up with a workable system. These include perfectionism and judgmental biases in your thinking.
I’d like to focus on procrastination which is big hindrance for many system developers. So many of us have a hard time getting started—especially when it comes to the task of developing a workable trading system. Yet postponing the task creates even more problems.
What is behind procrastination problems of this sort? Often, a major cause is the fear of failure, especially since the result of completing the task is an opportunity to play a risky game like trading. For example, if you’ve tried trading without a plan, you know how risky it is and part of you may be so afraid of the consequences of trading that you are having difficulty starting to develop the plan. Or, perhaps you’ve quit your job to start trading full time, but you’re so afraid of the possibility of not trading well that you cannot complete your system.
If you’re uncertain of your ability to perform, either based on past experience or a general lack of self-confidence, you’ll probably find it difficult to begin. And the greater your time pressure to perform, the more fear you will create.
Sometimes the fear of success will produce the same result.
People fear success because it will bring something new. Suppose you become “rich” and, based on your experience, you don’t like all the implications of what it means to be “rich.” Perhaps your friends will no longer want to be associated with you or perhaps they’ll try to take advantage of you when you have more than they do. Or perhaps you think wealthy people are stingy and narrow-minded. You think “I don’t want to become stingy.”
Another reason you might procrastinate about developing a trading system is lack of interest in that portion of the task.
You don’t like the idea of playing around with computers, testing numbers, and doing all of the work. Maybe it reminds you too much of school. Lack of interest, like a fast growing weed sending out roots in all directions, can strangle motivation and make it impossible to even start a simple task. All you wanted to do is get about the business of trading. As a result, you just trade, but you have never tested what you are trading. You just prefer to make mistakes the hard way.
Perhaps the work involved in developing a trading system reminds you of someone you do not like. Someone you dislike told you to do it and you feel resentment—or perhaps someone you dislike always used to do things like develop trading systems. You don’t want to be like that person, even though you know you have to do the work, so you tend to put it off.
The more you dislike the idea of developing a trading system, or even doing certain parts of the task, the more you will tend to push it away. This means you’ll leave the toughest part of the job for that portion of the day when your energy is lowest, and you are likely to make a lot of mistakes.
Lastly, the most important part of developing a trading system is to develop the objectives for the system.
Once you have the objectives down, then the task of developing a system really is fairly simple. Getting your objectives down is 50% of the task. Until you have your objectives written down, you have no way of knowing what you want or of knowing when you’ve got it. How can you even monitor your progress, a major factor in ongoing procrastination, until you know exactly what you want? In contrast, once you know what you want, you can set deadlines for each phase of the project.
How to overcome procrastination.First, you must realize that procrastination comes from you and take control of the situation. Make a commitment to get the job done. Also concentrate your focus on starting the project (or the next phase) rather than finishing it.
Next, write down all of your objectives for your trading system. At this point, you should know what you want, the tasks involved in producing it, and standards you will have for knowing when each part of the task is complete. When you know what has to be done next, it’s much easier to concentrate on doing it.
Third, divide the task of developing a trading system into steps. Rank the steps in terms of priority and then in terms of your desire to do them. Set deadlines for completing each step and announce those deadlines to the world. If you find that one portion of the job is particularly onerous, then break it into subtasks and give yourself a deadline for each subtask.
Lastly, begin the next step. Concentrate on taking each step and then begin.
Remember that Lao Tse, the great Taoist teacher, once said, “A journey of a 1000 miles begins with a single footstep.”