A special thanks to TRG alum Brent Hilburn for the topic suggestion today!

Ever feel like as a trader, you need to sit in a room full of strangers and say something like “Hi, my name is Jonathan and I’m a tradeaholic”? OK you’d probably use your name instead of mine, but I’m betting that like most traders, you’ve had the experience of feeling like you approach your trading more as a casino game, than as a profession. Maybe it’s in your past, maybe your present. But can you relate?

Humans have always been drawn to games of chance. Gambling in some form or another is currently known to have been around easily more than 5,000 years! So it’s seriously hardwired into us as a species. We can’t resist the urge to predict the future, and we get a huge rush when we’re right with our predictions. Couple this with the risk of losing something we value when we’re wrong, and it’s an outrageously potent mix.

And the truth is that this is exactly how I think most people view “the markets” – that it’s all gambling. It’s all just random chance and you either are lucky, or you aren’t. Unfortunately this even extends to a lot of traders, even if they don’t recognize it consciously.

Do you ever…

• Find yourself itching to trade first thing each day?
• Not want to stop trading because you’re “on a roll” or worse, because you “need to get back to break even”?
• Find that you’re quick to tell people about your wins, but tend not to say anything about your losses?
• Dread the Friday close because you won’t have anything to do until the reopen again on Sunday or Monday?
• Tell yourself you’re going to follow a certain process, stop at a certain gain/loss, etc. but then take “just one more”?

This list could go on a really, really long time so I’ll just stop it here. I feel confident you can relate to at least something in the list, if not all of it. I know I sure can. I’ve done/felt every single one of those things in the past but the truth is that until this topic was suggested to me this morning, I hadn’t really noticed that I don’t deal with any of them anymore! So what happened and how can it potentially help you if you still struggle with any such stuff?

First and foremost – and I know this is probably the last thing anyone wants to hear because it’s not as easy as pushing a button – I focused on myself. I was the problem in my trading more than anything else. Yes, I also had no measurable edge. Yes, I lacked the ability to actually read what was happening in the market in real time. Yes, I was pretty much just guessing all the time with no real plan or solid reasoning behind the trades I took. But all of those things can be (and were) addressed simply through high-quality trading education, and lots of practice.

What can’t be addressed so easily, is working on our own self discipline. Impulse control. This is where “the monkey” lives. The monkey is something we “lovingly” refer to in TRG for that side of ourselves that comes out usually in exactly the worst moment, and makes us do something we know we shouldn’t. Trade during a time we never usually trade. Do something we know isn’t generally a good idea but we’ll make an exception just this once. Keep trading because there’s an arbitrary profit number that would be awesome to hit and it’s so close… only to then piss it all away. “Monkey training” is an ongoing job of its own that we’re all constantly working on – and the monkey loves to gamble.

If you can’t control your monkey, then essentially you’re a gambler. And if you aren’t in control of your trading, then your trading is in control of you just like any other addiction would be. And to be sure, trading does provide all the elements of any good addiction from the psychological (reinforcement of bad/dangerous ideas that just happened to be profitable), to the physiological (adrenaline, dopamine, serotonin…) to the emotional (the elation you feel when you win, the despair when you lose) and even to the social (having to explain to your significant other that you just lost everything, getting to go on Twitter/Instagram/etc. to brag about your latest big win).

So what did I do in my own trading to “tame my monkey”? I made some decisions and gave myself zero flexibility on them.

• I traded one single setup that occurs in a narrowly defined time window every day, and shut down my platform as soon as it was over.
• I recorded every single one of my trading sessions (and before anyone asks, I use OBS) while narrating what I’m thinking/doing, so that I can’t rewrite history in my mind. The truth of what I did in the moment is recorded for posterity.
• I began posting my results every single day inside the TRG community. Win or lose, I posted with as much detail as I could so I would be accountable to doing what I committed to doing.
• I completely stopped watching the markets at any other time.
• I stopped all “practice” because I found that what I was telling myself was trading practice that I needed to do (“Get those reps in!”) was actually just letting the monkey play since it was sim and there were no consequences. It wasn’t constructive and in fact was reinforcing bad habits.

I made these things my priority, the things that above all else I was going to do no matter what. And it took time for sure, for me to really stick to them all consistently. But as I had made a decision and a commitment to myself and my trading that this was something I was going to do seriously as a profession for the remainder of my life, there was just no other option. I had to get myself under control.

I’ll be really honest here. I FUCKING HATED THIS. There’s just no other way to put it. My monkey was FURIOUS at being so caged. This was a whole lot of NO FUN and monkey wanted none of it. It was so much harder than I expected. Especially taking ONE single trade a day in the second half hour of the session, and quitting for the entire rest of the day. “OMG THIS IS SUCH A WASTE!!” monkey would scream.

But it wasn’t a waste. It was monkey taming. And it worked. Now I’ve expanded a bit, and I have 2 to 4 setups available to me each day, in 2 different instruments and multiple accounts. I don’t always take all of the setups – it depends on if I’ve already reached my daily goals/limits or not (as well as if I genuinely see opportunity available, am feeling it, etc.) but I know what my universe of trades is at this time. I don’t deviate from that. Well ok, I rarely deviate from it. Monkey still surprises me and busts out of its cage once in a while. But I no longer let the damage it causes, be catastrophic.

Oh and before I sign off, there’s one other thing I do that has helped a great deal. I separate my “creative time” from my “work time”. Too often I would find myself wanting to get creative with my trading. Try something a little different, push a boundary, make an exception, test out a new idea, etc. All of this is good and useful stuff, but not while you’re trading!! This is stuff best left for a completely separate time that is designated for creativity. And we need it… we need to always be exploring new ideas, new setups, new tools, alternative ways to do things, etc. But we should never do these things while we’re “at work”. Our trading should be our job. We show up, we do the job, and we “go home”. And while at home, that’s where we can play and explore and try stuff out. But not just as an excuse to stay tethered to the markets – but as a means to an end.

So for myself, this largely means working on my platform (Sierra Chart) and coming up with ways to improve what I do while I’m “at work” trading. Better chart layouts, better visualizations, better automation (I’m a sucker for hotkeys/macros), etc. And I especially work on this stuff on the weekends after the close on Friday when there’s “nothing to do”. It keeps my brain engaged in trading related stuff, without teaching my monkey to do bad things. I also do things like post about my week in the TRG community (“the Pit” as we call it), write these blog posts, and participate in our Facebook group. But the most important thing is that I compartmentalize my “creative time” and keep it from overlapping with my “work time” where I have a job to do, I know what it is and how to do it, and I just need to get on with it.

So does this resonate with you? Do you have a “monkey problem” that you need to tame? Are you at the mercy of the markets, or do you have your own bag of tricks for how you manage yourself and stay in control of your trading? I’d love to hear from you!

Until next time, good trading!

Jonathan van Clute
Community Manager, Trading Research Group