Fear(less) log Nr 11 - Cory Mitchell, CMT
Cory Mitchell, CMT. "Talk to yourself."
Hi Everyone
Buckle up for Episode 11, where I am thrilled to bring you more bite-sized yet brilliant strategies and nuggets of wisdom from the swing-trading maestro, Cory Mitchell! With an impressive trading career spanning over 18 years, Cory was kind enough to present us with some truly game-changing insights. This is the same format as it was in Fear(less) log Nr 9 with Brent Donnelly, where I don’t get involved (nor does AI), there is no in-person questioning, just straight to the point answers.
By the way, it would mean a lot to me if you could share this post with your followers to help spread awareness (the sharing button is located at the bottom).
Let’s dive in!
Cory Mitchell (Daytrader and swing trader)
First things first, I can't help but express my profound admiration for Cory's journey. His dedication to trading is virtually unparalleled, and it is evident in every aspect of his life. He has single-handedly cultivated strategies to handle a variety of situations, without the guidance of a mentor. I recall the conversation with Steve Goldstein (you find it here) in which he singled out Cory as embodying the ideal mentality for trading.
Fortuitously, Cory has generously divulged a wealth of knowledge in the responses that follow.
When did you first become aware of fear while trading? Was there a particular trade or situation that triggered it?
“From the start. I started trading a proprietary day trading firm right out of University in 2005. I had no money, and even trading small position sizes I realized very early on how easy it was to lose a lot (or make a lot) of money quickly. If I lost a lot, I didn't have the money to pay it back, nor did I have another good source of income if trading didn't work out.
It was a high pressure situation, yet I have always enjoyed those situations. I liked the process of managing my fear, and all the other emotions that come with trading.
From day one, it wasn't just learning the markets, it was learning to manage myself in relation to what I am doing in the market.”
What specific fears did you experience while trading? How did they manifest? The most common fears include fear of losing money, fear of being wrong, fear of losing out on the dream, fear of not being respected, fear of keeping up with expectations, or just fear of losing.
“My "main" fears vary by day or mood I am in. By "main", I mean the fears that pop up from time to time and cause issues. A fear of losing tends to occur most often after an extended period of poor or great performance. In the tough time times, it seems like nothing is working and doubt can creep in.
During the really good times, I know it is going to end so there can actually be a fear or expectation of that happening. I know that statistically I will have have good and bad periods, but fear can still creep in.
Another fear is missing out. This usually happens when conditions are not ideal for my system. My system requires I wait for good trading conditions, then I can trade. I'm not allowed to trade in poor conditions even if I think they will get better. That can be a struggle at times, because I don't want to miss any big moves. Waiting for movement, then trading means I do miss some moves. But overall it saves me way more than I miss out on.
Finally, I have a fear which is extremely helpful. I fear having a normal job. That fear keeps me highly focused on what I need to do to stay a trader. Mainly, follow my plan and continue to work on any mental areas that are in conflict with that.”
How did you initially deal with those fears? Did you try any specific techniques or methods?
“I use a technique called "identity work" a lot.
This is simply taking a few moments a day (often multiple times a day) and going over why I need to do things a certain way. For example "I follow my plan"...but just saying that isn't likely to make me follow my plan. So I add on reasons that push me away from something I don't want and pull me towards something I do want.
"I have to follow my plan, because I don't want to work a normal job and commute. I won't be able to golf everyday. It is super important for me to stick to my plan. If I do, I make a great income, can golf everyday, travel, and eat at the restaurants I enjoy."
These are all very important things to me...to keep or attain, as well as stay away from in certain cases. Through these dialogues, I find it much easier to follow my plan over time.
I have these dialogues regularly on different aspects of my trading. It really helps me instill the traits I want in myself. So no matter what the issue is, I use this dialogue approach to help slowly diminish it, and basically turn myself into who I need to be to trade well.”
Did you seek out mentoring or support to help you deal with your fears? If so, what kind of support did you receive?
“I didn't. I worked through it on my own. I did read various books, and took tiny pieces I liked from each. I then patched them together into processes that I liked and that worked for me in managing my fears and emotions.”
Were there any resources (books, courses, etc.) that helped you better understand and cope with your fears while trading? If so, which ones?
“I like a book called Feeding Your Demons by Tsultrim Allione. It is the idea that your fears are not some scary thing. Rather, if you pay attention to them, and work with them, fears can be powerful allies.
I have adopted my own method of this where I have negotiations with various parts of myself, getting them to work together in alignment toward an overall goal. It's important to remember that fear is trying to protect us. It is not bad. Work with it, give it a job to do. Don't fight it. Work with it. Fear hides a huge amount of motivation and potential with it. Use that as fuel, not a road block.”
Have you ever paid attention to your body signals, such as heart rate, while trading? If so, how did you use this information to manage your fear?
“I notice my breath and pace of my mind. If I notice I am not breathing, I am too worried about the market. If I notice this, I take slow breathes reminding myself that my only job is to follow my plan, and I will also tell myself how I plan to do that (where is my entry, my exit, my tailing stop loss).
As for my mind, I trade best when I keep one voice in control. That is why I talk to myself the ENTIRE time I day trade (30 mins to 90 mins usually). I tell myself what the market conditions are like, what has to happen to take a trade, where my stop loss will go, what the risk reward is, whether that risk/reward is likely to get hit based on recent movement. I just keep talking.
If my mind goes silent, I am in trouble, because now any random thought can influence me. I am more likely to make impulsive or random trades. So as soon as I notice my mind is drifting or distracted, I just start talking about the price action and how I will trade. If I am doing that, fear doesn't have as much room to creep in.”
Are you now fear-free while trading, or do you still experience fear from time to time? If you still experience fear, how do you manage it? Does it motivate you, or do you try to eliminate it altogether?
“I feel fear. I realized a long time ago you don't need to be fear-free to trade, nor do I need to be a Buddha. What I do need is a system for managing my fear. For me, I talk through everything I feel inside and see on the chart in front of me. Talking helps me manage the fear so I can execute my system. I do this while trading, and outside of trading (identity work exercise).
I do find fear a great motivator and ally. It tells me where I need to work on my system. If I am fearful, maybe I am not confident in a certain area, and that is a signal to do more work on that area. Occasionally it does cause me to take a bad trade, or miss a trade. That's ok. That is just a signal to work on that area IF it becomes problematic. I don't need to trade perfectly to make a living from trading. So I don't get too worked up over a couple mistakes a week. If I am making a lot of mistakes, that signals I have work to do.”
What advice would you give to someone who is experiencing fear while trading? Is there anything you wish you had known when you first started dealing with fear in trading?
“Fear won't go away, and it doesn't need to trade well. I use my fear to help me improve. If fear is causing you issues work on building yourself up with positive self talk. This will give you a higher base line of confidence so that you don't doubt yourself and your system as much. From there, use identity to slowly build yourself into the person you want to be based on what you do want in your life and what you don't want.
While trading, in the moment, when that fear pops up, just start talking. Express what you are feeling, thank the emotion for expressing concern, and then proceed with explaining to yourself why the situation is under control and how your trading system has planned entries if X happens and you will get out if Y happens. Keep talking.”
References
Final Word
What truly resonates with me about Cory’s journey is his profound self-awareness and the understanding of his own reactions in all kind of circumstances (and the market throws a lot of them onto us, every day). He uses the self-talk as a tool to stay centered and in control, actively avoiding the trap of letting emotions subtly sway his decisions.
Finally, he reveals one fear that I (and surely many of our readers) experience: The dread of settling for a convential job. If nothing else, this fear should sever as a rentless motivator, pushing us to strive for improvement each day!
Thanks again to Cory for sharing his insights. He can be found on Twitter @corymitc and on his website Tradethatswing.com
Have no fear!
Chris
crk@traderistic.com
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