Hitting the Reset Button

Welcome to Guest Post Week here at TRB.  One of the best things about being a financial blogger has been the opportunity to meet so many amazing people around the country these past few years.  And of all the people I’ve met, Eli Radke is easily one of my favorites.  Eli is a former college football player and is currently an independent trader.  He is an absolute teddy bear and his site Trader Habits is all about helping people help themselves to become better.  Here he is on taking a step back in order to move forward. – JB


I can’t think of a more appropriate topic than taking a break or as I like to say hitting the reset button as TRB is doing just that.

It was my freshmen year at spring practice and I got injured. My kneecap dislocated and it caused major damage. I limped my way back to the facilities. Threw some ice on it and started rehab. After a few weeks and not getting better, I got an MRI. The results came back, it was  two pages long. Basically every ligament, tendon, and cartilage was damaged. My knee cap had suffered a compression fracture but luckily my ACL was still attached.

I had surgery to clean up the knee; they took an eraser head size piece of cartilage out. I walked out of surgery and was ready for rehab in a few days.

I tried to ignore the situation, I did not want this set back and I was determined to “make up” for lost time. Two surgeries and a year and a half later I was to get back on the field.  It took another year and half after my football career was over before it didn’t hurt to walk. It wasn’t that the pain was devastating; it was that I forgot what it felt like to walk without pain.

My football career did not go as planned and it was at least in part because I did not have the courage to hit the reset button.  I had not accepted or acknowledged the psychological and physical damage that the injury caused.  By ignoring it, the only solution that was obvious was to keep working.  The problem with working at less than 100% for a long period of time in a competitive world is that you end up losing ground.

That skill that I was without in my football career has proven extremely valuable in trading.

Many new traders have the expectation that professional traders do not have to hit the reset button.  The difference between a good and great trader is the speed at which they do things. It is not that they do not hit the reset button it is just they do it without you noticing it.  It is a controlled and often scheduled.

A great trader or any performer knows when to hit that reset button.  It is important to understand the difference between working and producing. As I have heard so many coaches say, stop going through the motions.  When you do things half ass in trading, it results in losing money and creating bad habits.  I have seen it end or nearly end many careers.

The purpose of hitting the reset is not to ignore the problem but to gain perspective.

There are two mistakes you can make when it comes to hitting the reset button.  The first has to do with what the reset button provides.  The reset button does not solve your problems, but it allows you to do is to see them from a different perspective. The reset button is not intended to solve the problem but rather to put you in a position to find a solution.

The second mistake that can happen is hitting the reset button too late.  The reset button should not be used as a tool of last resort.  It should be built into your daily trading.  I hit the reset button after each trade and each day.  I do not take the next trade until I am reset.  I leave my trading at the office or I do not leave the office (I have spent a few nights at the office or fell asleep to a screaming cleaning lady).

These quick breaks make it easier to see a problem developing and also help to add a backstop.  If I do hit the trade reset button or ignore the feedback, I have the end of the day reset.  If blow through the daily reset then I take a break for as long as it takes.  If I cannot do that I know I will be out of business, like I have seen happen to so many others before.

A few things to consider.  If you are not in a position to take long breaks or take unscheduled days off, concentrate on the short, quick breaks.  Hitting the reset button is hard because you will feel like you are missing out.  That feeling of missing out is an even bigger sign you probably need a break. You are too honed in on the short term.  Without a doubt there will be a trade that you missed. The question is, would you have been able to profit from it in your current mindset?

To summarize:

  • Hitting the reset button does not solve the problem it just makes it easier to see.
  • All traders hit the reset button but not all do it on their own terms.
  • Hitting the reset button is necessary in good times and bad.
  • How you handle hitting the reset button can be a good indication of where you are psychologically.
  • There are risks of missing a trade when hitting the reset button but the bigger risk is creating a ‘new normal” and possibly a wasted career.

What I left out in the football story and an important point is that my family has a history of dislocating kneecaps.  I tried to ignore my DNA, who I was. If your DNA makes you more susceptible to a situation keep hitting the reset button till you have enough distance to find a solution.  For example, if you don’t do well after a winning trade hit the reset button longer.  The goal is to perform closest to 100% for the longest period of time.  Despite my early failure, hitting the reset button has served me well and given me the necessary perspective.

Time doesn’t heal all wounds, perspective does.  Perspective is the preventative medicine for high performers.

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