What has practicing martial arts have to do with trading? Well simply because both require similar traits to excel at. So let me share with you the characteristics which Ip man possesses that would made him a great trader.
Even as a grand master, having established his position as the best martial artist in town, he still continues to practice with the wooden dummy. It takes great passion for the art and dedication to the craft, to continuously hone his skills, committing to improving himself every day.
Just like in trading, we need great discipline to keep a trading journal. This requires more discipline during periods when you’re doing very well. Simply because we may get complacent. But the true process of being successful in trading, requires us to continuously monitor our trading. At the end of the week or month or quarter, and definitely at the end of every year, we must review how we have done and identify any areas which can be improved. Be it in minimizing our mistakes, or adopting a new practice to ride the trend longer or even developing quantifiable data about our trading approaches to help us make better decisions. This work has to be done no matter how we performed. And it takes great discipline to continuously repeat the process.
#2 Principled Approach
Ip man had a very simple and principled approach to dealing with all matters. Do only things which are guided by his moral compass. If it goes against his principles, he would not do it and even fight it. This worked well for him, and it will work well for traders as well.
Identify your cornerstone belief in trading, it should be aligned with your trading strategy and setups. Don’t take trades which go against your beliefs. If you take advantage of trends, avoid counter-trend trades. This will maintain your trading edge and keep you out of the psychological turmoil during losses. Does “I shouldn’t have taken that trade!” sound familiar to you?
So to have a principled approach, you first must identify the principles you strongly believe in.
Ip man’s most noticeable trait, is his humility. He treats everyone with respect and does not intentionally bring anyone down, nor put himself up on a pedestal. He believes we are all equal, each with their own struggles in life.
In trading, this is a very useful trait as well. We need to keep a level head in order to keep making objective decisions in trading.
If we become overconfident, we lose sight of objectivity and get caught up with “being right”. This is a very fast way to end your journey in trading, the desire to always be right may do you well in other industries, but not in trading. The infinitely more important ability, is to recognize when you are wrong and then take steps to remedy your situation.
On the other hand, if you have low confidence in yourself or your trading strategy, you also will find it difficult to succeed. Without confidence, you won’t be able to survive the draw down periods and may have a tendency to keep jumping from one trading strategy to another.
Therefore, humility will help you keep the balance necessary to succeed as a trader.
Watch your trading risk, it’s been a wild start to 2016!