How Kyle and Rodrigo met
When Kyle switched from his fulltime job to fulltime trading, he had no structure in his days. So his emotional volatility went up and down during the day. When he went through a pretty bad DD period, he had a hard time to dig out of that. Having all these doubts and questions in his mind: can i even do this? It felt like the first 3 months of his trading career and the payout he got were just luck. He was still struggling with an actual process and a routine. He reached out to Rodrigo saying: ‘I need someone to hold me accountable’. Rodrigo: the situation you were in was tough: new job, you were grieving, struggling massively, your dad past away.
Rodrigo’s performance coaching
Rodrigo: “a lot of traders might have a tactical edge, but because of external stressors it impacts internal stressors and you end up self sabotaging. So we have to bring it back to the basics. So that’s when we started to develop your trading process Kyle, a routine so that you reach high levels op performance. It was a process, it was very difficult, going through that process. ” Rodrigo talks about how difficult it is to tell traders WHAT they have to do, it’s more about trying to get them to decide that they have to push themselves even though it’s uncomfortable. I have to get them to believe that they can do it, before they actually get there. It was about making those shifts in mindset of believing it and it comes from little things, little habits and processes and stacking them up. Because that’s where you create momentum. Kyle had negative momentum that time so no matter how hard you push, no matter how much effort you made, you’re still dragging yourself back. It’s about having a process, a routine to create positive momentum so that you can execute with mental edge. Because you have that momentum of routine, of process and it’s this level of confidence in yourself and the belief that ‘i am a disciplined trader’ and what does a ‘disciplined trader’ have to do, what does their daily routine look like. it’s about breaking down that daily routine. Kyle is telling that he wasn’t aware he was going through some period of depression that time and Rodrigo helped me accept the reality that my life had become at that time. He needed to trust the process and not where he wanted to go in the future. I have to just be present in the now and the future will take care of itself.
Transforming trading discipline
How did that transition take place? Kyle is telling that he wasn’t very disciplined at first. Rodrigo and I were talking about the daily scorecard and he had done a couple scorecards but wasn’t doing them every day. When he had an A+ day, he did it. If you follow your process even if you have negative PnL, it’s still a great day but Kyle didn’t do the journaling and the scorecard in that case. What he noticed was that Rodrigo gave a bunch of advice, kicked his ass, but he did realised that - although he has Rodrigo as his accountability partner - he himself had the responsability to do the scorecards. If you don’t do it, you have to hold yourself accountable to that. Anyone in the world can tell you that you should do this and that, but if they don’t do it, it’s up to them.
Applying accountability
Trading is a performance profession and when it comes to performance time is essential, every single minute of the day can not be wasted as a trader. Even though Kyle likes gaming, hang out with friends, that’s still part of the process. You allocate time to loved ones, gaming, enjoy life and have balance, but when that gaming time is over you move on to whatever was planned ahead. Punctuality is so important in trading. When you are waiting for your setup and you’re not punctual with your processes and routines to be ready for that setup when it comes…it’s the definition of luck when preparation meets opportunity and when you’re not prepared you are not going to be able to execute and then you get frustrated and stressed ‘oh i missed the opportunity’. Then you end up fomoing in the position, self-sabotaging and you are not trading your edge. You’re now trading your emotion, your dissapointment, your greed, your fear and that’s where the majority of traders are struggling. They’re in the state cuz they not realise they’re unconsciously incompetent. They don’t know that they don’t know how important habits and routines and processes are to have that mental edge. Rodrigo: I do very well in trading because I attained the mental edge before I attained the technical edge. And so I’ve spent many years, over a decade, on the mental edge. Even before I knew about trading I dedicated time to my mental edge. Rodrigo is telling about him being very selective of who he works with. From the beginning he sets rules and boundaries or better called principles (trader code). If you’re following these, not wasting time, trusting the process even before you get the results that is the kind of trader that does the best. Kyle is an example of that. Kyle was deviating from the edge from time to time, but that’s normal. But having that accountability, keeping you disciplined and focussed on t he process, kicking your ass when you don’t follow it is a gamechanger. Having some sort of accountability is important for traders that have a technical edge but don’t have a mental edge. It helps being consistent with the process so that they can apply and are prepared for when that opportunity comes to either take or skip the trade. Not being in the trade is also trading. Capital preservation is very important. Having the discipline and the acceptance like ‘this is not my trading day, these are not my conditions is so difficult. Kyle confirms that this is difficult and he’s talking about the importance of finding something to fill your time with. If you don’t have anything to fill your time in a positive way, you will stare at the screen all day clicking buttons. Being organised in a specific way helps with the mental clarity. Decluttering stuff around you can also help for mental clarity, being highly organised towards your trading strategy is so important. You’ll find mental clarity in your edge.
What changed Kyle’s trading
Besides the scorecard Kyle’s talking about other gamechangers that helped him succeed. Visualisation exercises were huge for him. Rodrigo walked me through a losing day. Close your eyes, breathe deeply and imagine yourself taking a bad position or your stoploss getting hit. Some people actually recommend going into a demo environment just placing trades and watch the market hit your stoploss. Watching the market hit your stoploss is an exercise in itself. It is a skill because traders either add to a losing position they think that they have the winner or either they adjust their stoploss and assume or expose themselves to more risk so just visualising you taking that loss is so powerful. Now when you’re in front of the screens you can take the loss and walk away. Rodrigo about the visualisation process: it has to be very very detailed. And I went into some detail of the trader dejavu method in the podcast that we just recorded, but just to briefly summarize: it’s got the be very detailed you imagine you being at your trading station and you visualize your entire pre-market process. That includes setting up the entire apps, the software you use, finding and forecasting, implementing a checklist of your forecast (what does it look like, what does it feel like) and then setting up your alerts and going for a break, waiting for that alert to trigger. You visualize what that process looks like of having that break: what are you doing then, where in the house or outside do you go. And then you get the alert and you go back to your trading station and so then what do you see in price. What exactly can you see, describe the price action. Describe how you feel in this process. What are you seeing, what are you hearing. Very very detailed when it comes to the sensories. And then visualising taking a trade, setting your alerts and go for another break waiting for your trade to play out. What does all of this feel like? It’s very vivid and deep, lasts maybe 20 minutes. I don’t like to visualise longer because it is really mentally draining. Riz asks if it was a process to achieve this visualisation style and for such a long time.
The monkey mind
Kyle starts to talk about ‘the monkey mind’. Your mind can’t focus on a specific thing. It’s part of ‘trading composure’ having this little graphic infographic showing with a bunch of grey and green dots. The grey dots are you trying to focus on something for a long period of time. And then if you’re unpracticed in mindful meditation you’ll have more green dots that appear since your mind is distracted. So per second people that are very practiced have all grey dots because they can really focus. When we were doing that exercise initially rodrigo was talking to me and i was thinking of something else. I couldn’t focus on what he’s saying. That’s part of the monkey mind. In current society it’s so easy to get distracted, not being able to really focus on something. It’s a dangerous thing. You have to reprogram your mind, find that monkey mind and build that good habit again of being attentive right to your breath. There are methods to reprogram your mind to fight that monkey mind and build that good habit again of being attentive to your breath, focussing on 1 thing. When you’re coming to the market, you want to trade, you got to be attentive to emotions, the market, strategy, entering at the right time. Building that skillset back is possible, you can retrain your mind to focus on a specific task for a long period of time. For example the Pomodora method where you have 25 minute work blocks followed by a 5 minute break. During this break you do 3 R’s: reset yourself (can be as simple as breathing, box breathing for example) - review (review in your mind where you are at fysically, emotionally and what is happening on the charts) - recalibrate (when the 5 minutes are over you are going to recalibrate back into what you should be doing which is following the rules which should be clear, written out). This 3 step process is essential when you combine it with the pomodoro method it can really help to be in a neutral state and not come into a state of fear or greed.