Psychology and Risk Management
• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes
Organize your Workspace and Relieve Stress
Trading the markets is a stressful occupation. The markets are unpredictable and chaotic. No outcome is a certainty, and many times, when it seems as if you know where the market is going, you discover you’re wrong. It can be extremely confusing and disorienting. And this confusion and disorientation can produce stress. Winning traders must do whatever they can to remove some of the confusion and reduce stress. One of the best ways to relieve some of the stress, and put order into a face-paced unpredictable environment, is to organize your workspace.
It’s a good idea to organise your office now that the new year will begin the following week. Make place for the new by getting rid of the old. Old documents and clutter can be distracting. You may feel as though the clutter is encroaching on you and limiting your options if you have piles of newspapers you’ll never read. It typically gives you more psychological space and renewed creative vigour to clear some of the clutter and make some space. You experience more breathing room. Some traders might be the Oscar Madisons of trading; they might love a disorganised workspace and believe that organising it would be more stressful than giving in to the chaos.
In contrast, a tidy desk is less distracting. It’s crucial to keep your attention on your screens when trading. Too much clutter in a single area or on a person’s desk can divert attention from keeping an eye on the current trade. Many people have a sense of empowerment while working in a setting that is neat, uncluttered, and organised. Even though they may not be able to influence the markets, at least they have mastered their environment and reduced any potential psychological effects it might have on their awareness and capacity to analyse market situations with objectivity.
While organising your workstation does require some work, the peace of mind you’ll achieve makes the effort well worthwhile. Getting rid of outdated and useless information is the first step in any business. The hardest thing is this. We accumulate books and papers because we anticipate using them. However, we frequently amass so much things that its actual contribution is little. It will merely take up important workspace and we won’t have time to read it all. But discarding it is difficult. Throwing these things away discreetly implies that you wasted your time assembling them because it took time and effort. However, much of it can be thrown away.
Creating a loose filing system can be beneficial. It is not necessary to have folders for each topic and labels for each folder with specific categories put on them. Sometimes all you need to do is place the documents you need for a specific work or project in a sizable, appealing box. The boxes can then be arranged in a corner of your workplace or, if they continue to be a distraction, in the garage. But it’s crucial to remove it from your desk so that it doesn’t obstruct your workspace or, more crucially, your thinking.
Getting rid of clutter and maintaining a minimalist workstation can significantly reduce stress. The markets are out of your control, but by keeping your workspace structured, you can manage it. Therefore, get rid of everything old that is taking up room as the new year begins. You’ll be pumped up and prepared to take on the challenges the coming year brings.