Champions Focus On The Process

I don’t care who you were cheering on in the Super Bowl, or even if you weren’t watching. And whether it was Atlanta that lost the game or New England that won it; there is one thing that I have heard that rings true. Despite the amount they were trailing by and the mistakes made, Tom Brady remained focused on the process, and just looking at the next play. And that is the hallmark of a champion.

From the accounts I have read, that is what Brady was telling his teammates throughout the game and at halftime. Focus on the process. Just think about the next play. He had confidence in the process – it has worked for them in the past…

Traders and athletes are very similar in many ways. You need to have a process that is repeatable and that you have confidence in. In trading that confidence can come from where you got it (lowest) to having tested it out thoroughly with real money (highest). You can also get that confidence from back-tests and paper trading, which can be very useful for the beginner trader.

That’s the easy part. The hard part is actually sticking to the process, especially when things are going against you. That is where true success shines through. Brady and team could have easily folded, facing the biggest deficient in Super Bowl history. They had a great season and certainly have the rings to show just how good they are. Or they could have tried extreme measures – hail-mary’s and the like – that likely would have back-fired.

When you are following your rules and trades are going against you, it can be easy to give up on the process, or trade bigger, or listen to that “hot-tip” that you would have certainly ignored a month ago when you were doing well. That is when it is most important to follow your rules and stick to your process.

I have seen top traders say that they could give away their rules and yet others wouldn’t be able to get the same results (I believe some of the original Turtle Traders fall into this group). The reason is that people’s discipline sucks.

John has talked about ways to deal with this. The first thing is to be aware of it. Make sure you have a real process that you follow. Develop confidence in the process. And then stick to it. Again, that last part is the hardest, but there are ways to make that easier that we will look at next time.

Not sure where to start in building a trading plan and/or process of your own? Join John and the Trading Team in our daily Live Trading Chat Room where you’ll pick up tips and tricks to help you build a trading plan you’re confident in. CLICK HERE to learn more.

Chris McKhann

Chris McKhann

Chris McKhann has been involved professionally with the stock market for more than 15 years and specifically with derivatives for 12 of those. He started as a stock broker, but quickly moved on to options and futures trading. He spent some time as the Derivatives Product Manager for TD Ameritrade. He was the chief analyst and hedging strategist for OptionMonster. He has been an options trading educator and content provider for many years. His writing and analysis has been featured on Reuters, the Wall Street Journal, Forbes, TheStreet, CNBC and internationally. He has also designed and traded option and futures strategies for prop trading firms and hedge funds as well as managed accounts.

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