There are a lot of parallels between the Formula One tournament and Futures Trading. It is a ruthless competition in technology, engineering, skill, mental, physical fitness and psychology. One difference is that in Futures trading you only risk your account. Formula One drivers risk their lives. Another difference, in Formula One there can only be one winner. In trading, as long as you don't lose ur a$$ you're already a winner. In trading your car is your trading system. Trading without a system is like going to the F-1 in a street car your gonna be gang raped. Your amount of leverage is your "speed". I post here a few snippets of a psychology book for formula one drivers Ive been reading. One of the best books for trading I've ever read, as good as Douglas's. Risk and Fear No doubt about it, racing is a risky endeavor. If you really want to succeed, you will have to take risks, not only on the race track, but with career decisions as well. Whether it is on the track or off, taking a calculated, planned risk and failing is better than not risking at all. Of course, the goal is not to fail. The point is, you had better plan to deal with the risks. As the saying goes, "If you fail to plan, you plan to fail." Of course, calculating and planning risk is the key. It would be foolish to risk taking a corner at 80 miles per hour that you normally take at 70, just as it would to accept an offer to race for the Williams Formula One team in the next Grand Prix having just graduated from your first racing school. In either case, it is best to work your way up in calculated increments. Fear comes in many forms, good and bad--or more accurately, useful and useless. It can be the fear of physical injury resulting from a crash. That fear usually limits your speed. We prefer to look at that as self-preservation, though, which can be a good thing. In fact, the only thing that deters you from going over the limit and crashing at every corner is this so called fear. Fear and desire are usually the opposite sides of the same coin. Some drivers want to achieve something, but are too afraid of it not working out. They focus on the fear of failure, which is another form of fear--a result--rather than the desire of making it work. When faced with an ultrafast sweeping turn, or a difficult career decision, they think about what may happen if they made a mistake. If you concentrate instead on the solution or the goal and your performance, rather than the problem or the result, fear of failure disappears. If you keep a clear mental picture of what you want to achieve, your mind will find a way of making it happen. The fear of failure produces tension, which dis-integrates your brain, slows reflexes, and generally hurts your performance level. Of course, that usually produces the result you feared most. Keep in mind how valuable feedback and awareness are to learning and improving your performance. There is no such thing as failure, only the results of doing something. And those results are simply feedback, or corrections guiding you toward your objective. Failure is just a result you didn't want, one that you can learn from and help you improve your performance. Motivation If you are not 100 percent motivated, it is doubtful you will perform consistently at 100 percent. Focus on what you truly enjoy or love about the sport. Motivation comes from the love of what you're doing. As part of your regular mental imagery sessions, see yourself enjoying the art of driving, experiencing the thrill of racing, loving every second of it! Something most racers do not have to worry too much about, because of the high costs of testing and racing, can actually help increase your motivation level: moderation. Taking a break from the sport, to the point where you miss it, may be just what the motivation doctor ordered. Racing can be such an all-encompassing passion that many drivers spend practically 24 hours a day, seven days a week eating breathing, and living the sport. If that is you, when you finally get behind the wheel of your race car, some of the passion and burning desire to drive may be gone. Keep your racing in perspective and a a balance in your life. Remember why you race. Do not take yourself, your career, your racing too seriously. Have fun. After all, that is why you started racing, wasn't it? You may have to remind yourself of that every now and then. Fear is not a stupid thing. Winning is not a question of courage, but of faith in oneself and in the car. A car is like a creature that lives, with its own emotions and its own heart. You have to understand it and love it accordingly. I knew many drivers more courageous than me. They are dead now. -Juan Manuel Fangio If you believe it can happen to you, how can you possibly do the job properly? If you're never over eight-tenths or whatever, because you're thinking about a shunt, you're not going as quick as you can. And if you're not doing that, you're not a racing driver. -Gilles Villeneuve You have to be hungry all the time. You can never be satisfied. A complacent driver is a retired driver. -Rusty Wallace Desire! That's the one secret of every man's career. Not education. Not being born with hidden talents. Desire. -Bobby Unser From: Inner Speed Secrets: Mental Strategies to Maximize Your Racing Performance by Ross Bentley
You have to be hungry all the time. You can never be satisfied. A complacent driver is a retired driver. -Rusty Wallace You will notice rusty announced his retirement this year stating that the fear of injury was affecting his driving.
Racers are always looking for the quick and easy way to win. They're looking for the magic spring or the secret camshaft. Those things might exist, but I couldn't begin to tell you where to go and find them. If those things do exist. they won't make you a consistent winner. The people who win consistently aren't wasting their time looking for those things; they spend their time refining the basics and making sure they are prepared. -Ray Evernham PS Chapter 11 Driver's Personality looks right out of Van Tharp's!!
as someone who raced for 15 years i can tell you that racing is more of a game of risk tolerance. are you willing to risk crashing to get the win? past a certian point it isnt a game of skill anymore. that is why you hear of so many young rookies coming into racing and winning a lot early on while the older racers with much more skill cant win anymore. the young ones have a fearlessness about them and a willingness to drive it harder into the corner. i dont think that would be a good way to trade. when you crash in trading you are done. you cant just roll out another trading account.
when you're young you have a lot less to lose and a lot more to prove. when you're old you have reputation sponsors and probably a family. young newbie traders sometimes get amazing % returns, of course that's with $500 daytrading margin, sooner or later they crash hard. No experienced guy with a 7+figure account would ever trade like that. But newbies account is 5-10K and that can be quickly replenished with a job.
great posts by everybody. the analogy i like in trading is not as good as F1 racing but i'll throw it out. Trading is like Pool, everytime you concentrate on the cue ball and how you want to hit, you might not get the target ball in everytime. But when you don't concentrate on the cue, you'll miss every time. i.e. Focus on the buy/sell signals and entry; worry about the profits later. I have a japanese motorcycle and can attest to the fear analogy. there are tons of cars and other cycles that i can go faster than, but i don't. Majority of riders go faster than me because i fear too much. Theres no stop in an accident like there is in trading. The guys without fear smoke everyone on the road with even the shittiest rides.
That's also a good analogy. For racing, that would be focusing on performance, not on the results, on braking at the right spots, accelerating at the right moment, to challenge or not. Schumacher used to have that problem, he was too aggresive, he wanted to win too bad. Now he focuses more on performance and it turns out now he wins MORE. For traders that would be focusing on executing your trading system flawlessly not on the money.
Mika Hakkinen is my most favorite competitor of all times, and he is the only one who could beat Schumacher during the past 6 years. I always loved Mika's approach to racing and his graceful nature as he raced in F1 for McLaren....one of the best! BTW, I think Mika would make an awesome disciplined trader. www.hakkinen.com www.mclaren.co.uk
Been to the F1 race in Montreal on many occasions. If you have never heard the brutal "prime-evil" sound of a V10 engine shrieking down a straightaway at 18,000 RPM, then you have not lived, my friend! Talk about giving you "goose-bumps" down your spine and tears down the side of your face. Simply a one of a kind sound, and feeling! Next season's gonna be the best ever, no doubt.