Some of my readers have discovered that in my professional life as a research psychologist I developed an anger management treatment at the University of California, San Francisco. My friend and colleague Dr. Patrick Reilly and I wrote a manual for clinicians and a workbook for clients. So far, over 1 million hard copies have been distributed by the United States Department of Health and Human Services. Even more electronic PDF copies have been downloaded. Some readers have asked for a copy of the workbook. You can have a free copy of the workbook by downloading it at the link http://www.kap.samhsa.gov/products/manuals/pdfs/anger2.pdf
I hope you find the workbook useful, but please keep in mind that it was meant to be used by clients receiving cognitive-behavioral anger management treatment, so if parts of it seem a little difficult to use, you may want to consider finding a cognitive-behavioral mental health professional in your area to help you out.
Wednesday, August 13, 2008
Concentration
Focused concentration is a fundamental element of a proper mental edge. Dr. Ari Kiev (2002) observes, "concentration links discipline, desire, motivation, and satisfaction to achievement." In today’s busy world, however, concentration is often a lost art. Multi-tasking is the norm. We hold meetings over cell phones as we drive to work. We search the Internet while we watch the evening news. It’s hard not to believe that we must absorb as much data as possible until we are on the verge of information overload. But the human mind has limits. Although it is possible to engage in multiple well learned tasks simultaneously, when it comes to important tasks, it is better to devote your full attention to your immediate experience.
Do you find it difficult to concentrate? Perhaps it’s a reflection of your personality. While in school did you have trouble studying in a crowded library or on noisy bus? Are you easily frustrated? Are you constantly on edge and fighting to keep your mind on the task at hand? It's easy to concentrate when we are in a quiet room and when we are calm and at ease. But how well do you concentrate under stress? What if you are trying to meet deadlines? How well do you do then? It's easy to become shaken and lose your ability to concentrate. When you aren't fully focused on your ongoing experience, however, it's easy for self-doubts to creep into your consciousness. You may start having second thoughts and may want to sabotage your trading efforts.
Rather than allow yourself to get distracted, it's vital to focus on the moment. Focus on the process of trading in the here-and-now. Don’t mull over past mistakes or worry about what may go wrong in the future.
The more you can stay focused on your ongoing experience, the greater your mental edge. But how can you concentrate more easily? First, it's useful to remember that concentration takes psychological energy, and your supply of psychological energy has limits. If you want to maintain concentration, you must be rested and relaxed. Get proper sleep and nutrition. If you're tired or hungry, you won't be able to keep your mind focused on trading.
Second, it's important to control your stress levels. Stress depletes psychological energy. Even when you are excited rather than agitated by stress, your psychological energy is depleted a little bit each time you encounter an event that gets your adrenalin pumping. It’s vital to deal with the usual background stressors that deplete psychological energy. Family hassles, chores you have to complete, and similar stresses and strains that take up space in the back of your mind may deplete psychological resources without you knowing it. Get rid of as much stress as possible.
Concentration is critical to achieving the proper mental edge. But it’s difficult to concentrate when under stress. By taking precautions, however, you can stay calm and focused and sharpen your mental edge.
Do you find it difficult to concentrate? Perhaps it’s a reflection of your personality. While in school did you have trouble studying in a crowded library or on noisy bus? Are you easily frustrated? Are you constantly on edge and fighting to keep your mind on the task at hand? It's easy to concentrate when we are in a quiet room and when we are calm and at ease. But how well do you concentrate under stress? What if you are trying to meet deadlines? How well do you do then? It's easy to become shaken and lose your ability to concentrate. When you aren't fully focused on your ongoing experience, however, it's easy for self-doubts to creep into your consciousness. You may start having second thoughts and may want to sabotage your trading efforts.
Rather than allow yourself to get distracted, it's vital to focus on the moment. Focus on the process of trading in the here-and-now. Don’t mull over past mistakes or worry about what may go wrong in the future.
The more you can stay focused on your ongoing experience, the greater your mental edge. But how can you concentrate more easily? First, it's useful to remember that concentration takes psychological energy, and your supply of psychological energy has limits. If you want to maintain concentration, you must be rested and relaxed. Get proper sleep and nutrition. If you're tired or hungry, you won't be able to keep your mind focused on trading.
Second, it's important to control your stress levels. Stress depletes psychological energy. Even when you are excited rather than agitated by stress, your psychological energy is depleted a little bit each time you encounter an event that gets your adrenalin pumping. It’s vital to deal with the usual background stressors that deplete psychological energy. Family hassles, chores you have to complete, and similar stresses and strains that take up space in the back of your mind may deplete psychological resources without you knowing it. Get rid of as much stress as possible.
Concentration is critical to achieving the proper mental edge. But it’s difficult to concentrate when under stress. By taking precautions, however, you can stay calm and focused and sharpen your mental edge.
Don't Feel Down: Look for the Silver Lining
These days, it’s easy to feel down. The economy isn’t doing very well, and perhaps family and friends are experiencing hardship. It may seem trivial, but it’s useful to look for the silver lining. Here’s a study I read recently that shows the value of looking on the bright side.
When things aren't going right, it is useful to look on the bright side: Remember that things could be worse. When you get a $100 parking ticket unexpectedly, for example, you might as well think, "At least I didn't get a $200 ticket or get towed." It works to think positively. A study by Dr. Chris Davis, a professor of psychology at Carleton University, and his colleagues illustrates the usefulness of looking on the bright side. Participants were asked to imagine they had just experienced a major setback. Some of the participants were instructed to look on the bright side in that they were asked to consider the fact that matters could have been a lot worse. Other participants were asked to consider how the situation could have been much better. The mood of the participants was measured and compared. Research findings clearly favored looking on the bright side of things. People who focused on how matters could have turned out much worse felt happier after a major setback than people who focused on how events could have been more favorable. So if you want to be happy after you encounter a setback, look on the bright side.
How you look at a setback strongly influences how you recover from it. If you view a setback as a dreaded event, and imbue it with strong personal significance, you'll feel so emotionally overwhelmed that you will be tempted to engage in avoidance and denial. Rather than taking decisive action, you will waste precious psychological resources denying the reality of the situation. It's better to take setbacks in stride, find solutions, and move forward. Don't mull over what went wrong. Instead, figure out what you can do next to improve to solve problems. Many people spend all their time coping with emotions. They may deny the trouble they are in, for example. This is a passive approach that is rarely effective. Research demonstrates that it’s much better to take an active, problem solving approach. Whenever you feel beaten down, it’s more useful to distract yourself from thinking negatively and focus on what you can do to change the situation in which you find yourself. You may want to get more information, or develop a specific plan of action. But whatever you do, don’t get stuck. Don’t mull over the possibilities too much and start thinking, "Why did things turn out so wrong?" It's vital that you stay focused on taking active steps to solve problems. Think like a scientist. Pretend you are merely solving a mundane problem, like finding the solution to a basic math problem. Figure out what you can do next. Don't question your abilities. Self-doubt is a complete waste of time and energy. Look on the bright side for a moment, optimistically search for ways to pick yourself up off the ground, and take decisive action.
When things aren't going right, it is useful to look on the bright side: Remember that things could be worse. When you get a $100 parking ticket unexpectedly, for example, you might as well think, "At least I didn't get a $200 ticket or get towed." It works to think positively. A study by Dr. Chris Davis, a professor of psychology at Carleton University, and his colleagues illustrates the usefulness of looking on the bright side. Participants were asked to imagine they had just experienced a major setback. Some of the participants were instructed to look on the bright side in that they were asked to consider the fact that matters could have been a lot worse. Other participants were asked to consider how the situation could have been much better. The mood of the participants was measured and compared. Research findings clearly favored looking on the bright side of things. People who focused on how matters could have turned out much worse felt happier after a major setback than people who focused on how events could have been more favorable. So if you want to be happy after you encounter a setback, look on the bright side.
How you look at a setback strongly influences how you recover from it. If you view a setback as a dreaded event, and imbue it with strong personal significance, you'll feel so emotionally overwhelmed that you will be tempted to engage in avoidance and denial. Rather than taking decisive action, you will waste precious psychological resources denying the reality of the situation. It's better to take setbacks in stride, find solutions, and move forward. Don't mull over what went wrong. Instead, figure out what you can do next to improve to solve problems. Many people spend all their time coping with emotions. They may deny the trouble they are in, for example. This is a passive approach that is rarely effective. Research demonstrates that it’s much better to take an active, problem solving approach. Whenever you feel beaten down, it’s more useful to distract yourself from thinking negatively and focus on what you can do to change the situation in which you find yourself. You may want to get more information, or develop a specific plan of action. But whatever you do, don’t get stuck. Don’t mull over the possibilities too much and start thinking, "Why did things turn out so wrong?" It's vital that you stay focused on taking active steps to solve problems. Think like a scientist. Pretend you are merely solving a mundane problem, like finding the solution to a basic math problem. Figure out what you can do next. Don't question your abilities. Self-doubt is a complete waste of time and energy. Look on the bright side for a moment, optimistically search for ways to pick yourself up off the ground, and take decisive action.
Lessons From "Wall Street"
When I started this blog, I did not want to restrict my emphasis to trading, since the Mental Edge Newsletter and Blog at Marketwise.com focused on trading, but many readers have appreciated my column about the movie "Wall Street." Regardless of your profession, it's useful to make sure you are true to your own values as Bud Fox learned.
Lessons from Bud Fox
I recently re-watched "Wall Street." It’s a great movie, Michael Douglas as Gordon Geckko, Charlie Sheen as Bud Fox. The glamour, the wealth, and drama of the markets makes you want to watch this movie over and over again. In the movie, Geckko argued, "Greed is good." In the past, I’ve seen that saying in its negative sense. Sure, greed can motivate you to strive for perfection and keep you persisting in the face of adversity, but greed has its downside. It is often said that the markets are driven by fear and greed. Greed for money can be destructive, but Geckko actually did not merely restrict his argument to the unbridled pursuit of money. He argued that greed for whatever you truly desire is good, which may be a quest to make the world a better place or to find true love and raise a family. But clearly, it appears on the surface that Geckko is interested in the mere acquisition of money and power at all costs. He warns Darien Taylor that people like he and she aren’t the kind of people who take personal relationships seriously, and as we see in the movie, Geckko has no problem sacrificing his relationship with Bud Fox for a quick profit. Greed is not always good.
Greed may not always be good, but passion is. And in the end, Bud Fox learns this important lesson. Passion must be directed toward a goal that is consistent with one’s character. When Bud is about to be arrested for insider trading, Lou, a senior member of the brokerage where he works advises, “Man looks into the abyss, there’s nothing staring back at him. At that moment man finds his character. And that’s what keeps him out of the abyss.” We’ve all been there. I’ve seen traders lose their life savings and hold on to a pipedream of winning it all back with only enough capital to buy a few shares of the QQQQ. Trading is not for everyone, and certainly, risky trading with money you can’t afford to lose is not for everyone. In his Market Wizards interview, Dr. Van Tharp suggests that traders find a style that is right for them. Too many would-be traders are motivated by greed and trade in a style that is not right for them. Long term investing is right for some traders, and that’s fact.
Many would-be traders don’t want to accept their limitations. They can’t control their emotions yet believe they can magically learn how to do so. I’m not saying it can’t be done, but some people are never going to be comfortable with skydiving, and that’s what they are essentially trying to do when trading huge positions in volatile markets where it’s difficult to manage risk. If you have trouble controlling your impulses or emotions, you must face the facts: You are not going to be able to change a lifetime of emotional and behavioral patterns quickly and easily. Look at how hard it is to lose weight. Some people can do it easily, while others will experience health problems and still not be able to control their impulses. It’s vital to find out what you can do, but you must settle for a trading style that is consistent with your personality and life history.
My favorite scene in “Wall Street” is when Bud confronts Geckko in the park. Geckko is perplexed why Bud betrayed him, since Geckko gave him what most people want: wealth, love, and status. He asks, “You could’ve been one of the great ones Buddy. I looked at you and saw myself. Why?” Bud replies, “I don’t know. I guess I realized I’m just Bud Fox. As much as I wanted to be Gordon Geckko, I’ll always be Bud Fox.” The moral of the story is to look into the abyss and see your true nature. Discover what’s important to you and let that drive you. Passion is good, but you must know what drives you and accept it. And also, you must accept your limitations. Few will win the Nobel Prize, and I’m sure you don’t expect to, so why set unrealistic standards that you can’t achieve? Indeed, few actors even get to star in a movie like “Wall Street,” and as much as I enjoy Charlie Sheen on “Two and a Half Men,” he has never again achieved the movie stardom of his youth. And similarly, few traders become Market Wizards who can turn a small stake into a fortune. And few traders achieve enduring success that lasts from market to market.
An important prerequisite to trading with a proper mental edge is to know your limitations and work with what you have. That doesn’t mean that you can’t work up to trading at a higher level, but you have to have a realistic approach that builds on your strengths and works around your weaknesses. That’s all you can do. You can build up your trading skills through practice and experience and feel good knowing that you have mastered a skill that few have developed. Don't focus all your passion on money and the accumulation of it. Instead, focus on developing your skills and enjoying the process of trading. In the long run, you'll find that you will enjoy the game, and ironically, when you don't worry about making huge profits, you will actually trade more profitably in the long run.
Lessons from Bud Fox
I recently re-watched "Wall Street." It’s a great movie, Michael Douglas as Gordon Geckko, Charlie Sheen as Bud Fox. The glamour, the wealth, and drama of the markets makes you want to watch this movie over and over again. In the movie, Geckko argued, "Greed is good." In the past, I’ve seen that saying in its negative sense. Sure, greed can motivate you to strive for perfection and keep you persisting in the face of adversity, but greed has its downside. It is often said that the markets are driven by fear and greed. Greed for money can be destructive, but Geckko actually did not merely restrict his argument to the unbridled pursuit of money. He argued that greed for whatever you truly desire is good, which may be a quest to make the world a better place or to find true love and raise a family. But clearly, it appears on the surface that Geckko is interested in the mere acquisition of money and power at all costs. He warns Darien Taylor that people like he and she aren’t the kind of people who take personal relationships seriously, and as we see in the movie, Geckko has no problem sacrificing his relationship with Bud Fox for a quick profit. Greed is not always good.
Greed may not always be good, but passion is. And in the end, Bud Fox learns this important lesson. Passion must be directed toward a goal that is consistent with one’s character. When Bud is about to be arrested for insider trading, Lou, a senior member of the brokerage where he works advises, “Man looks into the abyss, there’s nothing staring back at him. At that moment man finds his character. And that’s what keeps him out of the abyss.” We’ve all been there. I’ve seen traders lose their life savings and hold on to a pipedream of winning it all back with only enough capital to buy a few shares of the QQQQ. Trading is not for everyone, and certainly, risky trading with money you can’t afford to lose is not for everyone. In his Market Wizards interview, Dr. Van Tharp suggests that traders find a style that is right for them. Too many would-be traders are motivated by greed and trade in a style that is not right for them. Long term investing is right for some traders, and that’s fact.
Many would-be traders don’t want to accept their limitations. They can’t control their emotions yet believe they can magically learn how to do so. I’m not saying it can’t be done, but some people are never going to be comfortable with skydiving, and that’s what they are essentially trying to do when trading huge positions in volatile markets where it’s difficult to manage risk. If you have trouble controlling your impulses or emotions, you must face the facts: You are not going to be able to change a lifetime of emotional and behavioral patterns quickly and easily. Look at how hard it is to lose weight. Some people can do it easily, while others will experience health problems and still not be able to control their impulses. It’s vital to find out what you can do, but you must settle for a trading style that is consistent with your personality and life history.
My favorite scene in “Wall Street” is when Bud confronts Geckko in the park. Geckko is perplexed why Bud betrayed him, since Geckko gave him what most people want: wealth, love, and status. He asks, “You could’ve been one of the great ones Buddy. I looked at you and saw myself. Why?” Bud replies, “I don’t know. I guess I realized I’m just Bud Fox. As much as I wanted to be Gordon Geckko, I’ll always be Bud Fox.” The moral of the story is to look into the abyss and see your true nature. Discover what’s important to you and let that drive you. Passion is good, but you must know what drives you and accept it. And also, you must accept your limitations. Few will win the Nobel Prize, and I’m sure you don’t expect to, so why set unrealistic standards that you can’t achieve? Indeed, few actors even get to star in a movie like “Wall Street,” and as much as I enjoy Charlie Sheen on “Two and a Half Men,” he has never again achieved the movie stardom of his youth. And similarly, few traders become Market Wizards who can turn a small stake into a fortune. And few traders achieve enduring success that lasts from market to market.
An important prerequisite to trading with a proper mental edge is to know your limitations and work with what you have. That doesn’t mean that you can’t work up to trading at a higher level, but you have to have a realistic approach that builds on your strengths and works around your weaknesses. That’s all you can do. You can build up your trading skills through practice and experience and feel good knowing that you have mastered a skill that few have developed. Don't focus all your passion on money and the accumulation of it. Instead, focus on developing your skills and enjoying the process of trading. In the long run, you'll find that you will enjoy the game, and ironically, when you don't worry about making huge profits, you will actually trade more profitably in the long run.
Popular Post: Impossible Dream
In reviewing the number of people who reviewe the Mental Edge Newsletter, I discovered that a a large number of people read my column on setting realistic goals. I wonder why it was so popular. If you have an ideas, please let me know.
Here's the column.
The Impossible Dream
The lyrics to “The Impossible Dream” are moving: “To dream the impossible dream. To fight the unbeatable foe. To bear with unbearable sorrow. To run where the brave dare not go. To right the unrightable wrong. To love pure and chaste from afar. To try when your arms are too weary. To reach the unreachable star. This is my quest. To follow that star. No matter how hopeless. No matter how far.” This is quite a romantic way of pursuing a noble goal, but in reality, few of us have the time and money to pursue an impossible dream, but that’s what many people try to do. They set up impossible goals for themselves and never achieve them. Setting more realistic goals is more productive.
Living a life to pursue a noble mission has its time and place. We certainly need selfless heroes in the world, especially these days. But some people don’t realize how they have set themselves up for failure. They try to do the impossible. It’s like believing that one can work a full time job and achieve a 4.0 at a competitive Ivy League university. Unless one is a genius, it can’t be done. People set unrealistic goals all the time and pay the price for it. They often feel stressed out, stuck and spin their wheels.
If you set unrealistic goals you will always feel on edge, and ready to crack under the strain to perform. Realistic goals, in contrast, will help you stay calm and focused. In setting goals, it’s important to have realistic expectations. Trying to do the impossible is unrealistic; modest goals are more realistic, and thus, more satisfying. Yet many people have wild dreams and unwisely reject modest, achievable goals for ones they can't possibly achieve. Since their expectations are often unrealistic, they fail quickly, feel disappointed, and just give up. Setting more realistic expectations eases some of the pressure and helps you build up sound trading skills.
Many people underestimate how long it takes to achieve lasting success. They fail to find out what it takes to achieve their goals and think success is easier to achieve than is possible. Unrealistic goals are hard to achieve. They require a heroic effort, yet many novice traders think only minimal effort is needed. They over-estimate their ability level. They overconfidently think that they have skills and abilities that they do not yet have. Don't ever underestimate the tendency to be overconfident. Conquer the tendency to trade beyond your skills by cultivating a sense of healthy skepticism regarding your trading skills and your trading strategies. Be realistic about what you can actually achieve.
In the end, it’s important not to get your hopes up too high. Motivating yourself by fantasizing of grandiose potential rewards will likely fail in the end. The only way you’ll achieve lasting success is by setting realistic goals. You must accept the fact that trading is just plain hard work that requires time and money, lots of money if you want to trade for a living. You’ll have to put in a heroic effort to achieve success. With enough persistence, hard work, and determination, however, you will build up the skills you need to become a successful trader, but you need realistic plans, not pipedreams.
Here's the column.
The Impossible Dream
The lyrics to “The Impossible Dream” are moving: “To dream the impossible dream. To fight the unbeatable foe. To bear with unbearable sorrow. To run where the brave dare not go. To right the unrightable wrong. To love pure and chaste from afar. To try when your arms are too weary. To reach the unreachable star. This is my quest. To follow that star. No matter how hopeless. No matter how far.” This is quite a romantic way of pursuing a noble goal, but in reality, few of us have the time and money to pursue an impossible dream, but that’s what many people try to do. They set up impossible goals for themselves and never achieve them. Setting more realistic goals is more productive.
Living a life to pursue a noble mission has its time and place. We certainly need selfless heroes in the world, especially these days. But some people don’t realize how they have set themselves up for failure. They try to do the impossible. It’s like believing that one can work a full time job and achieve a 4.0 at a competitive Ivy League university. Unless one is a genius, it can’t be done. People set unrealistic goals all the time and pay the price for it. They often feel stressed out, stuck and spin their wheels.
If you set unrealistic goals you will always feel on edge, and ready to crack under the strain to perform. Realistic goals, in contrast, will help you stay calm and focused. In setting goals, it’s important to have realistic expectations. Trying to do the impossible is unrealistic; modest goals are more realistic, and thus, more satisfying. Yet many people have wild dreams and unwisely reject modest, achievable goals for ones they can't possibly achieve. Since their expectations are often unrealistic, they fail quickly, feel disappointed, and just give up. Setting more realistic expectations eases some of the pressure and helps you build up sound trading skills.
Many people underestimate how long it takes to achieve lasting success. They fail to find out what it takes to achieve their goals and think success is easier to achieve than is possible. Unrealistic goals are hard to achieve. They require a heroic effort, yet many novice traders think only minimal effort is needed. They over-estimate their ability level. They overconfidently think that they have skills and abilities that they do not yet have. Don't ever underestimate the tendency to be overconfident. Conquer the tendency to trade beyond your skills by cultivating a sense of healthy skepticism regarding your trading skills and your trading strategies. Be realistic about what you can actually achieve.
In the end, it’s important not to get your hopes up too high. Motivating yourself by fantasizing of grandiose potential rewards will likely fail in the end. The only way you’ll achieve lasting success is by setting realistic goals. You must accept the fact that trading is just plain hard work that requires time and money, lots of money if you want to trade for a living. You’ll have to put in a heroic effort to achieve success. With enough persistence, hard work, and determination, however, you will build up the skills you need to become a successful trader, but you need realistic plans, not pipedreams.
Subscribe to:
Posts (Atom)