Frustrating, isn’t it?
It’s like building a sailing boat and learning how to navigate it. Everything lines up and you set sail, only to have a big wave tip you over when you’ve almost got to your destination.
You feel you’re close to reaching your goal but every time, something’s holding you back.
But what if you could change your strategy and become more resilient to those big waves? Implement changes in order to make the scales tip on the right side of the trading equation?
Thinking like an astronaut
A couple of weeks ago, I read a book called An Astronaut’s Guide to Life on Earth by Chris Hadfield. Chris Hadfield is a retired astronaut with multiple space missions and even the command of the ISS under his belt. He speaks Russian, wrestled with a live snake while piloting a plane and he’s Canadian. Canada didn’t even have a space program back then.
In the book, Hadfield tells about his years of training and preparation for him to become an astronaut, something he’s been aspiring to become ever since he was 9 years old. His astronaut training has shaped him, he had learned to “think like an astronaut”.
Through this wonderfully written book (I highly recommend it!), he tells his story and with it, he shares the life lessons and wisdoms that he has acquired in the process of life as an astronaut.
But what has this to do with being a trader?
As it happens, a lot of it is really good advice for traders. Let me explain.
1. The power of negative thinking
Hadfield talks about how he deals with the fear of being an astronaut. Everyone remembers the violent images of the Challenger exploding after launch and Columbia disintegrating on re-entry.
You’d imagine he’s terrified, right?
He’s been trained for years on how to think like an astronaut, to think through every possible scenario of what could go wrong, with space simulations triggering failure scenarios and literally 1000s of hours studying every aspect of space travel.
Fear comes from not knowing what to expect. From not feeling in control.
Hadfield didn’t feel fear. He couldn’t be more prepared to take that space flight, because he had intense knowledge of every system involved, knowledge of the failure scenarios, he could anticipate problems and knew how to solve them.
And don’t take my word for it – research has shown that the practice of negative thinking will actually result in more positive results! If you want to know more about it, read The Power of Negative Thinking: An Unconventional Approach to Achieving Positive Results by Bob Knight.
How can I apply this to trading?
Here’s what you should do:
Before entering a trade, instead of visualising those beautiful pips you’re about to rake in, visualise everything that could go wrong:
- Are there any news events that might disturb your trade?
- Can you find price action patterns that would validate the exact opposite position you’re about to take?
- Are there any big support or resistance levels that might trigger a price reversal?
- Looking on other time frames, can you find a reason to take the counter position?
This will not only help you make better decisions.
It will give you peace of mind.
When thinking like an astronaut, the power of negative thinking means visualising failure and figuring out how to prevent it.
It will help your trading, it will make it easier to deal with both the winning and the losing trades, and will make you a better overall trader.
2. Sweat the small stuff
There’s no such thing as over-preparation.
This is especially true when you’re on board a space rocket where a multitude of things could go wrong, but applies to other areas as well. It’s your best chance of improving your odds.
The little things matter.
Hadfield talks about how simulation debriefs at NASA are famous for how everything gets dissected. This is not to make someone uncomfortable, it’s meant to build up collective wisdom. It’s not a waste of time either. You might think it’s overkill right now, but this knowledge will help you move forward when you least expect it.
How can I apply this to trading?
This is exactly how you should approach your trading. Traders who don’t focus on the little things will not be able to figure out why they’re not profitable. They can’t seem to improve beyond a certain point and they’re blinded by the same broad strokes of their trading approach.
Find the time to actually figure out how some indicators work. Do you know how the RSI indicator is calculated? Don’t think some small part of your trading plan isn’t important. Instead, go over every aspect of it and question if you’re using the correct approach. Do you really know how the news of a central bank can influence price? How does your exit strategy work? Maybe it can use some improvement. Test everything. Then test it again.
As a trader, you sweat the small stuff. Only then you’ll be prepared for the bigger things in trading.
3. Have an attitude
In NASA terminology, your attitude is your orientation relative to two positions, for example your spaceship relative to the Earth and a satellite. Losing your attitude is bad, because you could end up drifting, lost and alone in outer space.
Hadfield looks at his life trajectory like attitude control. You need to stay on course to achieve your goals.
That’s not to say that you’re always in control whether you reach those goals or not, but you should do everything in your power to make that happen. Chris Hadfield definitely wasn’t sure that he was going to become an astronaut, but from the age of 9, he did everything in his power to make it happen. He started an enrichment program in school, joined the air cadets, later on became a fighter pilot and a test pilot.
He never assumed he would be an astronaut, but he did everything to have the highest probability to make it happen.
Losing your attitude in life – drifting from your path – is way worse than not reaching your destination.
How can I apply this to trading?
Everyone who tells you that you can become a trader in a week, is lying.
It takes a lot of study, determination and time.
It just doesn’t happen overnight.
You might not be that top trader yet. Or even be profitable. But what’s important is that step by step, you create the building blocks that will give you the best shot at becoming that successful trader.
You read another trading book, you try out that new strategy, you improve your trading plan, you follow this online tutorial on price patterns, you watch a new video series about trading psychology. You go back to the drawing board when things don’t work out – yet.
Having an attitude means you should do everything you can to make your trading career as success.
4. Be ready. Work. Hard. And enjoy it!
Trying to figure out how to get where I want to go when just getting out the door seems impossible.
Learning to trade can often feel the same way.
But by thinking like an astronaut, we can improve. Don’t assume something is unachievable. Instead, think: “I should do things that keep me moving in the right direction, just in case”. The road to trading success is to make small, incremental improvements that all count towards the end goal.
This article has outlined what you need to do to reach those goals.
Think like an astronaut, and become a better trader.