Step 008 – What I Learned About Trading From Improv


cigar-362183_640In trading, one of the prerequisites of success is to be able to do with consistency that which feels unnatural and uncomfortable. Since becoming a Master Trader is my goal, and since my natural tendency is towards careful planning and staying well within my comfort zone, I am often challenged on my path.

The other night I met with a friend and I showed him my Definite Major Purpose (DMP) that I have written down in less than 400 words (yes, part of a self development program which I can highly recommend). He read it carefully and said “It is well written, very clear, and inspiring. But does it help you to get out of your head, out of your planning, and out of your comfort zone? Because you need to do that in order to achieve this!”

I knew that of course, but sometimes we need to be told what we know… Yes, knowledge does not apply itself.

Having defined my DMP and my goals has certainly helped a lot. Working on my habits and my thoughts have caused my confidence and my happiness to soar. But still, I kept thinking that more could be done. And my friend had a suggestion – that I go participate in an improv theater group!

If ever there was a scary thing to me, this was it! I am a Toastmaster (which was scary in the beginning), but a speech is something I can prepare for, something I can control. But this would be completely unplanned, completely uncontrollable, and so completely outside my comfort zone.

But I knew he was right and I told him so. I went the next day.

The improv group starts with “warm-up” rounds, just taking turns miming an activity and a partner starts a dialogue, then it’s over. Later we did more challenging things, like picking two random locations and then have to act out a story that starts in one location and ends in the other. One basic rule is that you can be “touched out” of the play by another player: If someone else decides they want to take the story in another direction, they simply touch your arm and you leave the stage. insight1A trading analogy would be that this particular trade has ended, maybe with a win maybe with a loss, maybe on a target maybe on a stop. The key is that this happens all the time and it is excellent training in not taking it personally.

The challenge is to constantly be aware of the other players and where they are taking the story, as well as how they are interpreting the other players and what ideas they have of where the thing is going. Because we are not allowed to discuss the play beforehand, it is really one big unknown. Kind of like the markets: Don’t anticipate, just participate.insight2

I was very scared, I felt very uncomfortable, and I did not like being touched out. I noticed these feelings and I actually managed to not allow them to take on any meaning! Instead I did what I came for; I participated, even volunteered. I took a large step out of my comfort zone and I even had some good fun! insight3In a trading context, I would say that I was able to reasonably follow along with what happened (the market), stick to the (my) rules even when it felt uncomfortable, and avoid getting emotionally involved with my positions.

My friend is a very good observer. Afterwards he told me that I had loosened up considerably during the session. Still, he noticed that I was holding on to a “comfort zone” within the uncomfortable situation of being in the play: Instead of moving the story forward, I was clinging on to the character and the situation that had developed, I was reluctant to change, to move on, to advance the play.

Again, I knew he was right. The trading analogy is clear: When in a trade that is not really going anywhere, I am often paralyzed, being unable to decide whether to cut it or to hold on. For the play, the solution is clear: Cut yourself out, let the play move on, and wait for the next opportunity to get back in. Sounds like good trading advice too.insight4

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