Every New Year brings with it an opportunity to make some resolutions. Most of us do. But, by approximately the 10th of Jan, most of those resolutions are forgotten. This happens to all of us.
So, this year, I decided to make New Year resolutions on the 10th of Jan! Hoping that I would beat the nix!
A point to think is, do we need a Jan 1st to make resolutions? Not really, right? So, it is just one of those calendar things. Doesn’t matter. In this context, I am reminded of Scarlet, the heroine from the famous book, Gone with the wind. Whenever pressed, she would exclaim, ‘Never mind, I will do it tomorrow’- meaning, when a new ‘something’ starts- could be a day or a week or a month or even a year! New beginnings are perceived by the mind as a good point to start something fresh.
Resolutions are always about some changes that we are going to make in ourselves- like losing weight, create some new healthy habits, save money, spend less etc. etc. So, most of the time, it is about creating some new habits.
That is not a difficult decision. Because most of us have so many things that could do with some improvement in our life!
But the thing with habits is that you need to be able to sustain it long enough for it to become a habit. That is the crux. Many resolutions fail because we don’t sustain that practice long enough for it to become a habit.
It is not just the physical practice that does the trick. For doing, we first need to think it. And that thinking has to persist. Until we do it. And then again tomorrow. And the day after. And the day after that as well.
So, what is really required here is that there has to be a change in personality- a New You.
Unless the New You really, really wants the resolution to manifest, it will not. Therefore, for resolutions to succeed, it is not just a statement but a bigger commitment to yourself, to design a new you, different from the old you of last year!
So, choose your resolutions carefully. Who is this new you that you wish to create, to become? First decide that.
As an example, I can resolve that I shall be a Better Trader this year.
Lets see what that will involve.
To be a better trader, I need to be more disciplined about following the dictates of a system. This of course presupposes that I do have a system! If not, then I have to first get one. It can be created by me or I can get one off the shelf from someone else. I have to make an effort to know and understand the contours of the system. I must not be judgmental about the system without knowing it fully and that too after having used it for a while.
For being a better trader, I need to understand the relation between risk and reward. I have to stop looking mostly at rewards and ignore the risk aspects. I must learn to define risks and understand what it entails and I must accept them. Most problems in trading involve an inability to accept short-term drawdowns while waiting for targets to be achieved. Unless the mind accepts that there can be a certain risk involved with the trade, it is very difficult to persist with the trade through drawdowns.
For being a better trader, I need to understand the role of probability and learn how to define it. Then I have to be able to track the actual pathway the trade takes after I have entered it. I need to keep constantly adjusting the probabilities of success and decide whether to hold or fold. Remembering that rewards are probabilities is a constant. Paying too much attention to risk will also cloud your mind and not keep you alive to the probabilities in real-time.
I have just mentioned three factors and you can see how many subsets are there within these. And how many changes in how many areas need to happen for your one-line resolution- I will become a better trader this year- to come true! Just read back the above three points once again to get it clear that a resolution is often a one-line statement but a multi, multi-step process that one has to implement.
This is why I stated earlier that a New Year resolution is a reinvention of yourself. Make them only if you are ready to reinvent yourself in that area. It is a lot tougher than you think. The New Year date is just a point in time. The real deal is what you will do within you.