The Secret to Being a Trader Who Thrives Under Pressure

We’ve all seen them. The clutch performers. The athletes who seem to thrive when the stakes are highest. While others break under the pressure, they make big play after big play to win games. But what’s their secret? And more importantly, how can you use it to become a better trader?

Other than the big names like Michael Jordan, Kobe Bryant, and Tiger Woods- who all seem to have an ability to thrive under pressure that defies the limits of mere mortals- there is perhaps no bigger clutch player than Robert Horry, who is a retired basketball player. While his NBA career was only modestly successful if you look at his numbers, he developed a legendary ability to hit the big shots when they mattered. He even earned the name “Big Shot Rob” because he made so many key shots in important playoff games, helping 3 teams win 7 NBA championships.

I watched Horry play when I was a kid in the mid 90’s, and always marveled at his ability to thrive under pressure. That’s why I was interested to learn his secret when I became a trader. I wanted to know how he did it so I could elevate my trading game. And then finally came an interview where he actually openly talked about it. And you know what he said? “It’s just a game.” That’s all he said. That was his secret. While other players made it a matter of life and death and put huge pressure on themselves to perform, Horry remembered the simple truth that it’s just a game. Sure his ability to play this game directly determined how much money he would make, or whether he would remain an NBA player or not, but at its essence it was just a game. It’s not life and death. And there are many more important things to worry about. So why put extra needless pressure? Just go out, catch the ball, and release. That’s what Horry did and he became a legend.

As traders, we often forget to take this perspective. At times we look at a trade as if it’s life and death. As if everything is riding on it. But it’s not. If we’re doing a correct job in terms of risk management, any given trade is relatively insignificant. It won’t make or break you. And at its essence, trading as a whole is just a game. It’s an incredible game that can reward us richly and cause us to grow as human beings, but it’s just a game. And the more you can remember that when you’re making it out to be a matter of life and death, the better you’ll do. Because there really are more important things to worry about. Like your health, and the health of your family, and your friends, and so many other things. When you stop to think about the grand scheme of things, you realize that you’ll be okay even if you lose on the next trade. And you’ll be okay even if you go through a drawdown. There are people experiencing much much tougher things in life. This is just a game.

So what it takes is a delicate balance. Like everything in trading, we have to to learn the key ability to balance seemingly opposite and contradictory things. On the one hand trading has to be your life. And on the other hand you have to remember that it’s just a game. It has to be your life from the sense that you have to dedicate yourself to it with great passion and commitment, often sacrificing many things to achieve your goals. But you can’t let this dedication become something that enslaves you. You can’t let it weigh you down with needless pressure as if there’s nothing more important in life. Because there are more important things, and as you remember them when the pressure is on, it’ll lift a weight off your shoulders and you’ll realize that it’s all okay. And ironically enough, with this attitude you will thrive. You’ll be in a more relaxed state of mind, available to respond correctly to the moment without extra pressure. And as you trade better, you’ll feel even more relaxed and confident and a virtuous cycle will ensue.

So remember, it’s just a game. Dedicate yourself to it and seek excellence, but don’t give it a power over you that it doesn’t have. That can make all the difference in your bottom-line. In the next post I’ll take a look at another way to thrive under pressure as a trader. So stay tuned for that next week. Until then let me know if you guys have experienced better trading when you remember not to take it too seriously and remind yourself that it’s just a game.

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