At the FX365 Institute, we are taught to “trade with indifference.” By trading at indifference, we prevent emotions and unnecessary worrying from influencing our decision making process. Indifference can be accomplished by having a solid trading strategy (good entry, two exits). Have you ever taken three excellent entries in a row and had all three go against you? I have. However, this doesn’t discourage me. I know that if I trust the process taught by the institute, I will become financially free – even if I have losing trades from time to time.
Sports psychologist Ken Ravizza teaches athletes to eliminate unnecessary stresses, or in essence, “Play with indifference.” Ken emphasizes that his pupils must control the controllable rather than spending precious emotional energy worrying about things they can’t control. In baseball, a hitter can’t control:
However, hitters can control two things: their preparation and how they choose to respond to each situation that is out of their control. As a hitter, I use the following solid strategy shared by many successful players. With no strikes, I’m looking for a specific pitch that I can drive to the gap or hit out of the park. With one strike, I’m looking for something I can hit hard. Although a curveball at the knees is a strike, I can’t hit it hard, so I won’t swing. Once there are two strikes against me, I’m looking to hit anything that is close to the plate so I don’t get out called on strike three. That is how I practice. That is how I prepare.
Here is a scenario: with the winning run on second, I’m at the plate with my hitting plan. As I step into the batters box for the first pitch, I’m looking for a pitch on the inside part of the plate that I can drive deep in the left field gap to win the game. However, the first pitch is a fast ball on the outside part of the plate. I take the pitch (i.e. don’t swing) for strike one. With one strike, I’m now looking for any pitch I can hit hard. The pitcher throws me a curve ball that is out of the strike zone. However, the umpire calls a strike. Now the count is 0-2. I’m looking to hit anything close to the plate because I don’t want to give the pitcher an easy strike out. The 0-2 pitch appears to be an inch off the plate and I hit a ground ball to the second baseman. He throws me out, and we lose the game. Of course I will be upset that we lose the game. However I can be satisfied with my at-bat because I know if I execute that strategy every time I’m in that situation, I will win more than my share of games. I know I won’t be able to win every game, but I will win enough to be successful. It is an emotionally intelligent response to not get discouraged after that at-bat.
What if the umpire had called the second pitch a ball (umpires will not make that mistake most times)? I would have taken the third pitch because it was off the plate. The chances I’m going to get a pitch I can hit hard and win the game go way up. True, that is not what happened. But those pitches are like my three good entries in trading. If I see those entries again, I will take them because I believe in my strategy. If I’m in that game situation again, I’m going to take the same approach… for the same reason. I have a proven successful strategy. Worrying about things I can’t control just throws me off my game, makes me lose focus, and keeps me from peak performance.
In trading, have faith in your preparation and don’t stress out when your trade goes against you. Trust the process.