Traders must have the ability to deal with the ups and downs that trading the markets brings. Resilience is the ability to be able to effectively respond to losses, drawdown, mistakes, setbacks, change, and tough times in the markets.

Trading is a difficult endeavour; it is full of ups and downs and setbacks but also tremendous highs. One of the crucial topics is dealing with the roller coaster of emotions and feelings. Resilience is an important skill to research and work on. The list above of dealing with losses, drawdowns, mistakes, setbacks, change, plus tough market conditions or tough personal conditions make it an extremely important skill to master. These factors will probably be the main triggers for difficult times and needing resilience as a core skill.

Dealing with these factors it is all about process and procedures, having a structured approach in your overall trading, and filtering all the way down to your trading execution. This means that you have a starting point and a bedrock to build your trading plan from.

As it is mentally difficult to constantly deal with these issues, it takes a long time to train your mindset and mental fortitude to have the strength to deal with these issues and react appropriately and take the correct course of action in a timely manner. But if you have built a disciplined routine and structure, you can use your procedures and processes as waypoints. Think of these as ‘save points’ in gaming terms where you can reset, go back to the last acceptable place so you can pause, record, review, and execute a future course of action. 

This approach not only helps you during the day to improve your reactions to setbacks in the markets, it is also building your skill of resilience, because as these triggers repeat over the days, weeks, and years. You are methodically and repetitively dealing with them on a practical level. This means that your mental resilience is building in the background because you have confidence in what you do, you have confidence in the pause you take before you act and you have confidence in your act. However, not everything will work, but you have confidence in your plan and your review structure so you can adjust, and next time see an improvement in the situation. This slow yet practical methodical approach runs in conjunction with the psychological learning and training of resilience that will ultimately stand you in great stead.

As discussed, trading is complicated and convoluted. Building from the ground up with a structured approach that involves a strict routine and disciplined procedures and rules means that all these eight factors that we will discuss over the next few weeks have the great potential to improve you and therefore trade at your best with improved consistency and performance.

The enjoyment for myself is building this structure as you can see that trading is not the most important factor. The constant learning, improvement and adjustment is fascinating and it means that I can rely on the structure to support me in bad times because you know that you are not randomly trying new ideas or not getting the correct feedback from your actions to allow for a proper review.