There are some traits so sought after in life, and trading, people go to the ends of the earth to find them. Patience is one that comes up often, and we’ve touched on patience before. The ability to hang in there when things are slow or painful. But the other that doesn’t get touched on as much, is resilience.
Resilience is the ability to come to the table again after taking a loss. The ability to take hits and keep stepping into the ring. What drives some to be resilient, while others struggle?
We can quantify resilience in a measurable way. Most of us, after some time, find ourselves willing to try again. Whether it’s dating after a breakup, or even just being able to improve our mood after getting hit with bad news. Increasing resilience is simply decreasing the amount of time it takes to get back on track. Instead of thinking of resilience as something others have more of, a trait that just is, it is a trait that can be measured, trained and improved upon.
If we want to increase our resilience, it’s important to look at those who have high resilience, and figure out what they have in common. Once we know that, we can then draw upon our similarities and similar experiences for references.
There are three core themes that seem to be explored when it comes to resilience, and they all boil down to faith.
The first is faith in the world, or the natural order of things. Essentially that things tend towards a mean reversion, just like in the markets. This shows up a lot in people who have been through tremendously poor conditions, whether a traumatic event, childhood etc, a really rough time that they can look back and say - well things could be worse, I made it through that, so I can make it through this too.
The second is faith in one’s skills. Whether learning, muscle memory or whatever else, increasing your skills gives you faith in yourself, in your ability to elevate yourself, make yourself better, somehow find a better outcome. In these situations, those with less resilience are those that don’t find they have the necessary skills, or even the ability to learn the skills in order to make it through.
The third is locus of control, which is essentially a combination of the two. Locus of control is our belief system about what in our lives we can control, and whether we or not we have the ability to force change in our own lives, or if we are victims to circumstance.
Putting it all together, increasing our resilience in life, or as traders, we can combine the three most important aspects of resilience, and train ourselves. We can increase our skill set, constantly adding to our knowledge, and how we can use that knowledge to further ourselves in our own lives. We can establish risk management, take control over as much as we can, and decide that we will not approach the market with a victim mentality. And lastly express gratitude, for what we have, for our ability to make things even better, and to know that if it can be worse, it can also be a whole lot better.
