I've talked in the past about how I read books not necessarily related to trading, which can help you - one such example was Dale Carnegie's How to Stop Worrying and Start Living, which I wrote about here.
Another such book is The One Minute Manager. Originally published in the early 1980's, it became a business classic with over 15 million copies sold. Updated last year, can the The New One Minute Manager help your trading?
Lets look at the three 'secrets' discussed in the book:
One minute goals
This first secret recommends that you write your goals down on a single sheet of paper - normally one or two paragraphs will suffice.
In trading terms, these goals should relate to your process or method, not the intended or desired monetary outcome. If you follow a suitable process, then the money will follow. Read this for more.
In my own case, my goals could be summarised very briefly, along the lines of 'follow the rules'. The thirteen words written underneath my blog logo summarise my approach. Ed Seykota's rules (goals?) were summarised in six bullet points on a business card.
Remember - it has been proven that people respond better to written down goals that are kept in view and are visually 'confronted' by them, than those that you may have in your head which come and go. Out of sight, out of mind.
You also need to commit to reviewing your goals every day, as well as looking at what you are actually doing, to see if your behaviours are matching your goals - this leads onto the next secret.
One minute praising
Psychologically, how you talk to yourself can have a significant impact on your performance as a trader. The second secret in the book refers to praising people when they do something right.
Traders often continually berate themselves when they do something wrong. This can lead to a negative mindset and low self esteem. How often do those same traders praise themselves when they do something right?
Resolve to give yourself credit when you do something right - such as praise yourself when you carry out of a trade which matches your own method or rules. Or maybe a specific point - such as not allowing yourself to snatch profits off the table early for fear of losing them if price reversed. Be specific about what exactly you did right. This helps to reinforce those actions.
Encourage yourself to do more of the same.
Of course, with trading, just as in business or life in general, you can do exactly the right things and, due to things beyond your control, still end up losing. That is trading. Just make sure you stick to your side of the bargain, and the more things you do correctly, the better the results that will follow.
One minute re-directs
This third secret has been revised from the 'one minute reprimands' discussed in the original book. Here, you need to review any mistakes made (and again, be very specific about what you did wrong), and talk to yourself (or someone else) about your feelings about the mistake and of its impact on your overall performance.
Then pause for a few seconds, to let that sink in, before giving yourself a little 'pep talk'. Remind yourself that you are better than the mistake that you made, and you still have confidence in yourself and your ability to progress and develop as a trader. Always finish on a positive.
Importantly, this book not only gives you a feedback loop, it helps you communicate with yourself in a positive manner. It ensures that you take responsibility for your actions, by managing yourself. This all helps develop an internal locus of control - more on that here.
Finally, take note of one important point made in the book, which relates to two of the secrets:
"Feedback is the breakfast of champions!"
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