Hi, I'm Born Investor & it's been 90 Days since my last Tilt.
“Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.” Ed Seykota
Since diving into the stock market four years ago I’ve learned more about myself than I did in the thirty years previous to that. Some may put that down to a global pandemic giving me the time to reflect, and that’s a factor. Others might say inner reflection happens to everyone when they hit their 30’s.
To quote Ed Seykota in Jack Schwager’s original Market Wizards book -
“Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.”
Many times in life a favourable result from a questionable decision allows us to justify our actions. Most of us never really have to analyse what makes us tick. What causes us to “Tilt”.
“Tilt” is a term used in poker to describe a time in which a player is no longer making rational decisions in their game. They are not controlling their emotions and are usually on a slope to losing money.
Tilt is applicable to all aspects of life. You can tilt in a game of soccer or you can tilt in a meeting, but what most people don’t recognise is you can tilt on a longer time frame. You can tilt in a job, a relationship or, as is the topic here, in the stock market.
I’ve tilted many times in the stock market. Interestingly, my method of tilt tends to be a slow drawn out torture rather than the normal blow up moment. I will torment myself regarding my performance for days on end. I can actually feel the build up of frustration coming in the preceding days and then knowingly consummate that moment of tilt. It almost always involves an issue that is nothing whatsoever to do with the markets. A frustration with work, an issue at home, poor dietary decisions, a breakdown in a positive routine or even the weather just being too hot (Ginger Irish Man)!!! Any number of things big or small can combine to make you falter.
So how do you stop yourself tilting? You can’t. However, you can work on it all the time. My version of a tilt today is a fraction of the same thing 4 years ago. I can recognise it before it occurs. I can’t stop it but I can quickly start to figure out what is making me frustrated. Minimise the magnitude of it. Take a break, do something that will alleviate the stress. For me that’s heavy lifting gardening or DIY jobs at home. I can switch off. The job is in front of me and involves nothing but me and some tools that I can inexpertly wield. It’s satisfying.
I know what you’re thinking.. Why would you put yourself through the stress of trading?
The answer is it’s not stressful. I absolutely love working on it. Improving all the time in my technical and emotional abilities.
In Mark Minervini’s Think & Trade like a Champion he says that every morning he looks in the mirror and says “You have the capacity to do serious damage to yourself today”. He does this to acknowledge his own capacity for self-destruction.
For me at least, this journey has made me a happier person (so far). A more aware person, and according to my family a better person to be around. I speak far more openly about issues that are bothering me and more readily accept my own flaws, of which there are many.
For the average investor or trader tilt can materialise in many different forms, style drift, rash decisions to buy or sell, oversized bets, poor risk control, use of excessive leverage. No new investing method or technical indicator is going to fix it in one go. The key is to figure out the triggers, work on yourself and look at your overall lifestyle.
Personal Issues I’ve identified:
Diet - When I’m eating healthy and well hydrated I’m happy. It’s about as basic as it can get but something we all ignore. If you’re like me, keeping meals regular is an issue. I have such a habit of forgetting about breakfast or leaving lunch late. It has a knock on effect.
Sleep - Lack of sleep is something that hit me when we had our son, any parents out there will know what I’m talking about. Thankfully a few years later that issue is behind us. I used to be an avid night owl but I’ve learned to adapt that by getting up very early with my son instead. I get a few hours of productivity in the morning before the world alarm clock goes off.
Regular Exercise - I’m lucky that I play plenty of sports. It releases the dopamine and is a great way to relieve stress. I have zero interest in the gym but love anything competitive or that gives an adrenaline kick like soccer or mountain biking.
Break of Routine - I have a difficult time keeping routine, it’s something I’ve worked on and improved but when my routine breaks or something interrupts it I find it can have an adverse effect on my mood. If I find my routine is getting interrupted regularly then I know I need to adjust my expectations. Which brings me on to the next point…
Life gets in the Way - One thing that I think is an issue for many traders is life getting in the way! Rather than forcing the issue and getting frustrated you must take a step back and realise that unless you’re an 18 yr old with no responsibilities then life is ALWAYS going to get in the way. Adapting routine to work with life’s responsibilities and inconveniences is essential to getting workflow in order.
Achieve the Small Things - Something that held me back for years was concentrating on the big goals rather than the small steps. I would be impatient to achieve the big goal and falter on the small steps to get there. I’ve really tried to change my thinking on that. It’s difficult but it’s as basic as something like learning a language. I’m on Day 90 of a Duolingo Streak learning French. 90 Days, 10 Minutes a Day (with several Freezes thrown in!). It’s the perfect example of small steps. My French has come on leaps and bounds with small steps. The same is true for anything whether that be learning a musical instrument or honing skills in the stock market. I have to regularly repeat to myself that small steps all the time will get me where I want to go.
The above issues may seem very basic but humans are, for the most part, quite basic.
Improving my performance in these core aspects in my life allow growth in all other aspects. I’ve learned not to beat myself up for faltering. I try to pause, rest and go again to make the next step. This is a characteristic that mentality monsters show in every walk of life. They fail or have a setback but they reset and go again. Tilt happens to everyone, how you handle it is the key.
Thanks for reading,
Irish Born Investor