Trading In The Moment

By David Hobart
18 May 2009

One of the strengths of great traders is their capacity to stay in the moment. Ironically, staying focused on the present can give you insight into possible futures; none of which are fixed or certain, but some more probable. In martial arts training, there is a concept known as Mushin – or No Mindedness. It is a state of knowing, without ego or attachment, where the subconscious mind is truly free; a zone where you are able to act intuitively without judgement or hesitation.

Getting to no mind

Most people have naturally had the experience of being in the flow. Knowing how to get into this zone at will is where the challenge is. For most of us, getting to Mushin takes training.

To experience Mushin in trading requires building confidence through a depth of knowing your strengths and how you use them consistently to make money.

How do I make money in the markets?

Firstly, I have an intuitive understanding of economics and politics. This simply means that I am comfortable making assessments about market pricing in the context of economics. If it doesn’t make economic common sense, then usually an imbalance exists which I may look to exploit.

Secondly, I am aware of biases and the quirks of human behaviour. Having an interest in psychology, I’ve always been aware of the effect that profits and losses can have on ones emotional stability. I am constantly looking at my own biases and the biases of those around me to give me cues for potential market direction. Recognizing that we are at times predictably irrational can be of great value in regards to betsizing and entry execution.

How did I build these skills? Over the last 15 years, I have read volumes of articles and books on economics, politics, psychology and markets. My interest and passion in these subjects has grown over the years and I measure my progress through the profitability of my trading. A constant process of learn, test and measure.

I still have doubts about my portfolio construction and whether I will make money this month or next; but I have a strong sense of confidence in my value as a trader. This confidence reduces fear and uncertainty, which allows me to spend more time in the moment.

Market Insights

Most equity markets are at a tricky juncture. Many intermediate term participants are looking for opportunities to establish short positions, not believing in the rally on fundamental grounds. I can’t argue with those sentiments, but I would throw in a caveat; that the stimulus measures from Central Banks and Governments around the world are unprecedented in terms of their size and scope, and this could see markets rally to levels unthinkable to most participants.

I’m still looking to sell the rally myself, but I’m just keeping my powder dry for the moment (while still maintaining a small long in the Nikkei).

If you would like to find out more about David Hobart’s trading coaching and mentoring programs, please email David at dhobart@traderemotions.com.au  .  
 

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Disclaimer: The contents of www.traderemotions.com.au is general information only and in no way provides advice in a personal or general nature. David Hobart and his related entities can not be held responsible for any loss, cost or expense resulting from your activities related to the subject matter in this document and or relating to www.traderemotions.com.au

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