I just started the Van Tharp Institute Peak Performance Course for traders (home study edition). I really need to improve issues with my trading (fear, self-sabotage, over-trading, etc.). I think this course could really help. To place some accountability on myself to finish the course I plan to post my reading notes and assignments online. Hopefully, the info provided will help others as well.
Van Tharp Institute Peak Performance Course
Vol 1: How to use Risk
Preface:
The three stages of growth for a trader.
1) They think they can make easy money from trading. They think the most important thing to investing/trading is picking the right stock.
2) A substantial change has to occur where the trader begins to asks, “how should I trade to make money.” Thus, they start looking for a trading system that fits them.
3) The trader realizes that trading success does not come from external control, but from internal control. Controlling risk, profit/loss>1 and position sizing all comes from internal control.
Chapter 1
Commitment means congruency. It means the whole person is working together for a common purpose. No internal conflicts. When committed, trading is no longer just a hobby. The moment one definitely commits one’s self, then Providence moves too. I translate that as: when you are committed to work hard, luck will be on your side.
To develop commitment first you must determine your obstacles. Second, and more difficult, you need to determine how those obstacles reflect what is going on within you. The last step is deal with them. Make peace with the obstacles by making them unimportant.
Below I created my personal obstacle table:
Obstacle
Internal reflection
Make them unimportant
Fear
1) Fear of being wrong
2) Fear of missing my stop
3) Fear the loss will affect my trading and mood.
4) Fear the little success I’ve had is due to an accommodating market. Once the market changes I will fail and quit.
1) Your supposed to be wrong at least 50% of the time. If you are wrong less than 50% you are scalping too much.
2) You are working the mental muscle, it will get easier. I do have risk controls, if I miss my stop I can’t lose too much.
3) If you learn something from the trade, it was still worth while taking it.
4) Have faith in yourself that you will learn and adapt.
Self sabotage
1) Every streak of good trading is ended with catastrophic failure.
2) I take way too many partials hurting my win/loss ratio.
1) You will wind down your streaks with smaller share size and SIM trading. So it will end with a whimper not a roar.
2) With more trades, more data will be available for analysis to determine proper partialing. Data is stronger than my nerves. The math will prevail.
Over trading
1) If you only take one trade the whole day, but it had a poor setup, you already overtraded.
1) I am having slow progress, but I do see progress. My trades are slowly getting better. I have the time to learn. I am in no hurry. As long as I have progress there is no issue.
Health
1) Not enough sleep and exercise
1) My family is slowly becoming more accommodating. It is taking time but they will come through for me. In the last 6 months my average sleep has increased from 4.8 hrs to 5.7 hours a night. Still a far cry from 8 hours but again as long as there is improvement.