Are Your Judgements Affecting Your Trading Performance?


Are Your Judgements Affecting Your Trading Performance?

As every experienced trader and investor knows good judgement calls are the key to making sound trading decisions and investment decisions. Over the past year or so many traders and investors have had a hard time making money and many hedge fund have lost money last year even though there were many good trading opportunities. This fact strikes me as a good reason to investigate our trading and investment mentality from a fresh perspective which goes beyond the usual parameters and invites you to embrace a new paradigm.

Of course, everybody who has invested some time in trading and investment psychology understands that improvement is not achieved by pointing fingers and re-visiting the past over and over again, something which is most popular at the moment.

Can we learn from the past? Not very much it seems, because if we could we would not be repeating the same investment and trading behaviours which we know cause us grief.

Real insights and real progress only come from assessing one’s point of views for their validity in today’s markets. Unfortunately this is not as easy as it sounds as our judgements and presuppositions of how things should be and how they will be if this or that is to occur severely clouds objectivity.

We just love to feel safe in our old established boundaries using well established reference points. To let go of those is asking too much even of experienced professional traders. Interestingly experienced independent traders are oftentimes more willing to look at new ideas. Hence they often are much more successful than many a professional hedge fund manager or trader.

Markets are not linear and yet we try to analyse them with mostly linear methods. It does not work, particularly in an environment that is ushering in a major shift of consciousness. We are presently experiencing a transition cycle of major magnitude which not only affects the markets, the financial and political systems, but is literally a cosmic event. We can observe rare star constellations not seen for 26 000 years, the earth is shifting on its axis, just to mention a couple of things which are not experienced as part of the regular cycles.

To think that one can escape these massive shift without adjusting is madness, ignoring or denying the change is akin to insisting that the earth is flat.

Buddhism teaches us a very simple philosopher: Things work until they stop working. And so it is with the markets. Observation of basic cycles and riding them until they end makes money.

By far the easiest and quickest way to adopt this detached view is to stay out of judgement. Incidentally, this will also make for a calmer, happier life in general,

Granted, it takes time to learn to stay out of judgement, it feels uncomfortable, since we are conditioned to believe that decisions must be based on judgements. This is of course an illusion. When we stay out of judgment, solutions, decisions present themselves to us. we really don not do any more but receive.

The only real difficulty is grasping the concept. Once grasped it becomes easy, something we find hard to accept, as we believe that nothing worthwhile is ever easy. Particularly in the world of investment and trading. Nonetheless, if you were coached by me I would ask you to ask yourself how your judgements are affecting your trading and investment decisions. Keep asking this question with every trade you enter and whenever you cover a position. You may be amazed what you will uncover.