Performance Cues
Following last week’s theme of the use of sports psychology in trading, this week we will discuss the use of performance cues. In professional sports, like trading, there is a huge amount of information that must be processed at any one time. Some of this information is essential, some of it distracting. While most people will spend a lot of their time trying to ignore the distractions and concentrate on what’s important, sports psychologists have actually found this to be counterproductive. Instead of trying to block out noise such as the crowd, elite athletes will simply accept these distractions for what they are and instead focus their attention on a few key aspects of their performance. These points of focus are known as performance cues. For a tennis player it may be paying attention to the upper body of his opponent before a serve or for a skier it might be making a strong edge on their outside ski and keeping their hands forward. The key for a trader is to establish what the important performance cues are in their own trading environment.
So as a trader, how and where exactly do we find these performance cues?
Dr K. Van Tharp, famed trading psychologist, is quoted as saying that “people don’t trade a market. They trade their beliefs about a market”. If we believe this to be true, then performance cues in trading must be a very individual thing and something that can only be established through a process of self-discovery.
In Shane Murphy and Doug Hirschhorn’s book The Trading Athlete they have created three simple steps to establish your cues:
Keep your performance cues simple
It is easy to confuse yourself with information overload. Start with the basics, keep the cues simple and allow your experience to guide you almost unconsciously.
Make your performance cues positive
Negative thoughts can cripple a trader. They lead you to second-guess great opportunities, hesitate and then revenge trade out of frustration.
Focus on your strengths
Elite athletes will work on weaknesses in training then only on strengths in the lead up to an event and during the event itself. Unfortunately for traders, the only time we have to review our performance and consider our weaknesses is once the market is closed. Therefore, from the time we wake up, until the time we turn off our screens, we should only be thinking about our strengths.
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