The Mental Game of Trading
We have another incredible book recommendation for you that probably most traders have read or at least heard of. But, even if you have read it, it is packed full of excellent content, so allow us to review our favorite parts with you! We are going to talk about Jared Tendler’s The Mental Game of Trading as our next Market Mamas Must Read Recommendation.
The author, Jared Tendler, is on point from page one and with good reason. He is an international mental game coach who has poured into educating and refining world champion poker players, traders, entrepreneurs, elite athletes, and PGA tour players. With a master’s degree in counseling psychology and extensive experience as a high level golfer himself, he’s spent decades cultivating a deep understanding of the psychological struggles of high achievers and strivers. Jared is clear and honest in this book and calls out our most common pitfalls with clarity, such as greed, fear, anger, and a lack of confidence and discipline. But, thankfully, he also digs into practical solutions and great ideas for implementing strategies for improving performance after you’ve identified those major flaws. Jared also creates a bridge from how your mental and emotional game correlates to your technical game which is so important for us traders to be cognizant of. We have really gained so much useful information and have been able to turn it into practical strategies and processes from his book so we just had to share it today with you all!
“Emotional problems will keep coming back if you don’t find and fix the real cause of them.”
Check out our full discussion in the podcast below, including more of our favorite quotes and how we’ve adapted the advice into our own trading journeys and lives.
Early in this book, Tendler explained an important perspective on his entire approach to mental coaching. The core of it is that we need a solid, balanced system, and emotions can actually be helpful to that aim! Makes you think, huh? One quote of his from this section reads: “Emotion is not the problem. It’s the key to mastering your game.” He advises that the journey of working through your mental layers is like a game with many levels and challenges to be undertaken once you have an established technical system that you understand and can regularly execute within when you are trading with a clear and focused mind. After you have your technical system dialed in, we all know what happens next - our psychological challenges become more apparent and are the barrier at that time to profitability.
Tendler teaches that it is the best long term strategy to not hate or work to shut down your emotions, but rather, treat them as helpful signals and get curious about what they are trying to tell you. His advice is to use them to identify deeper problems in your game, such as fear or a lack of confidence, and target correcting those, instead of battling fear in real time as you trade. The fear signal in a trading day, for example, is a sign that you need to strengthen your system or personal faith and respect. And we should use our emotions as catalysts that can help direct our work more specifically and personally moving forward. Such a great way to reframe that!
One of our greatest takeaways from this book is the A-C MENTAL game mapping! Once upon a time our poor performance days were definitely trending more than our best. We had the tendency to just keep repeating those patterns and that easily and quickly turned into crap trading habits (C-GAME) that subsequently resulted in big losing days, trading trauma, and just toxic unhealthy feelings about our progress. Maybe other traders out there can relate to having a time of feeling almost stuck and continuing to reinforce your worst performance flaws. The mental game A-C mapping provided us a way to finally identify and address our execution flaws through daily mapping with specific attention to areas of mental game and tactical skills.
Think of A-C mapping as a performance spectrum C being the worst and A being the best. Jared outlines these as categories with specific mental states and tactical skills that correspond for A, B, and C game. Too many to list but I’ll give a few examples from each. C game execution looks like a mental state of forcing a bias, no patience, trading P&L which can result in chasing price, not following loss limit rules, overscaling w/o planning for price to go against you. B game mental state looks like overthinking, reacting slower, and going against your gut, which can result in losing focus on price location and context, cutting trades too soon or not giving enough room, and not having a good read on volatility. NOW A GAME, the best mental game looks like being patient, decisive and confident which of course results in clear understanding of price and market context as a whole, letting price come to you, and acting when you need to.
After each trading session, we both would go into this doc and literally check off each of the boxes related to how we executed that day. On any given day, there may be a healthy sprinkling from all three categories with the occasional full C game because we are imperfect beings. But, those did start to become fewer and further between as we faced our performance flaws head on. Jared explains the idea is not to expect to completely eliminate poor performance flaws but rather “expect our worse game, and drive for our best!” And this A-C mental game mapping is just one tool that we review in the full podcast episode above, so for all our gems, please do watch the full episode!
Another concept Tendler wrote about that we found particularly powerful was his inchworm concept, aptly named after the method of movement of a literal inchworm! To explain this best, I have an excerpt from this section of the book: “A bell curve is a static snapshot of your performance over a defined period of time and shows how frequently you were trading well, at average, or poorly. Improvement is the forward movement of a bell curve over time - something an actual inchworm illustrates perfectly in the way it moves. Consistent Improvement happens by taking one step forward from the front of your bell curve, where your A game becomes even better, followed by another step forward from the back, where your C game becomes less terrible.” Makes sense right? And it is a really clear image for me of a slow but real progression that comes with time and consistent effort. By mapping our behaviors, as outlined above, we can clearly identify the areas we exhibit the most that need work and strategically target those. And, kind of insidiously, our worst days become not quite as bad as we learn and evolve. This is because our inchworm has scooched up some and is just a bit farther down the path!
This full podcast episode is full of these and many more great reminders for us all, so please check it out in it’s entirety. This advice is truly timeless and highly relevant to any striving trader! And, because we think he’s amazing even though he doesn’t yet know we exist (lol), here’s the link to his website with so many truly incredible resources and his coaching program that we image is seriously amazing! https://jaredtendler.com/
The Mental Game of Trading has a 4.8 star rating on audible!
To listen to this book for yourself through our favorite resource for audiobooks & podcasts, go to: https://www.audible.com/pd/The-Mental-Game-of-Trading-Audiobook/B0935GPRTY?action_code=ASSGB149080119000H&share_location=pdp
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We definitely recommend this book for all our traders! Order your copy today!
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