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Bad Trading Day? Pick Yourself Up and Move On

Alden Cass

Everyone in society goes through an occasional bad day. They happen to the best of us, from professional athletes to major hedge fund traders.

Bad days can appear in short spurts or can linger for relatively long blocks of time. In Major League Baseball, we watched the New York Yankees go into the All-Star break with a very disappointing record and place in the standings. This is a team comprised of the best athletes in the sport and they all realized that they were underachieving. Since the break and as of last week, the team had won 11 out of 14, and the Yankees narrowed Boston's American League East lead to seven games. They have turned around their slumping ways.

Many traders who have come to me in private practice for performance coaching have told me that they struggled to let bad days go. Losses would trigger in them images of poverty, the loss of a job and huge doses of anxiety and self-defeating thoughts about their competence as a trader. Consequently, one bad day or afternoon would, on occasion, spill over into a week to two-week stretch of digging out of a hole.

Having worked with perfectionists for so long, I have noticed that they are always the most critical of themselves for mistakes or poor performance. They don't need their desk manager, risk manager or their spouse to tell them that they are underperforming. They feel it and they realize it before anyone else. Loss or failure weighs on their minds and limits their confidence on future trades. It is hard to end this vicious cycle, but trust and faith in your skill is a good start.

The Yankees have to take each loss as if it is a meaningless part of a bigger picture, the World Series. As a trader, you have to remind yourself of a few key points to make it through a long season as well:

• As I often tell my traders, a bad day is part of the game. It is just a meaningless data point in your long season as a trader. Huge losses can be chipped away over one or two good days of disciplined trading. Even the best traders have horrific mornings or afternoons. That is part of their season, so why not allow yourself the comfort of realizing that losses can be overcome?

• Mistakes are really learning experiences. Traders are often the first to blame themselves for the mistakes that they made in executing trades or for impulsive decisions. I had a trader who beat himself up over a bad trade involving MF Global. He described the negative and "bearish" thoughts that were flowing through his mind after he finished the work week in the red.

  He felt like he was in a rut with his trading strategy. He needed to hear that he was disciplined, his strategy was sound and that even the best decisions informed by the most up-to-date data points don't always work out the way you plan them.

  I encouraged him to take notes on what he learned that day as a trader so that he could recognize similar trading patterns again in the future. Again, the lesson to him was he did not make a mistake, he was just learning for his next opportunity.

As the summer moves on, remember to think of each day as a means to an end. I know that every day is a battle to make more money or make up for a loss, but focus on your long-term goal. Shake off the bad days, think bullish and enjoy your life.