Tuesday, September 14, 2010

Mental toughness, part 3

We all know how important motivation is to success, but Graham Jones claims in Thrive on Pressure that we have to differentiate between healthy and unhealthy motivation. In the former case a person thrives on challenge and looks forward to going to work each day; in the latter, he is desperate to succeed and fears failure. The person who is motivated for the right reasons exhibits “approach” behavior as opposed to “avoidance” behavior. He addresses underperformance head-on; he willingly takes risks, knowing he is accountable if things go wrong. (p. 151) Healthy motivation is primarily internal; a person is “involved in an activity for the inherent satisfaction derived from the activity itself,” not for some external reward. (p. 157)

Jones recognizes that motivation may change; for instance, in a form of learned helplessness “pressure that becomes excessive and results in stress can drive avoidance motivation.” (p. 152) This is often manifested in burnout; “disengagement, apathy, acquiescence, passiveness, detachment, and feeling worn out are all symptoms associated with this unhealthy form of motivation.” (p. 153)

Goal setting, Jones writes, is a powerful tool for channeling motivation. These goals should be INSPIRED—an acronym for internalized, nurturing, specific, planned, in your control, reviewed regularly, energizing, and documented.

Jones distinguishes three types of goals. First, there is the outcome goal; in the case of a professional golfer it might be winning the tournament. This outcome goal is not under the golfer’s control (however well he played, another golfer may have played better) and so it puts him in a situation of high pressure. Second, there is a performance goal where the golfer might figure that x under par should be a good enough score to win the tournament. And finally, there is the process goal—e.g., stay focused, smooth swing. The second and third goals are under the golfer’s control and ostensibly cause less pressure.

Translated into a trading environment, having a winning trade or a series of winning trades is not under the control of the trader. But the trader with a plan figures that he should come out ahead at the end of the day or week. Moreover, every trader should have process goals. These can vary from executing well to knowing when to sit on the sidelines, from cultivating supportive emotions to blocking out distractions. The trader who focuses on performance goals and process goals should be less stressed than the one who focuses on outcome goals.

(to be continued)

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