Resilience is generally used to describe the ability of a
material to absorb energy when it is deformed elastically without creating a
permanent distortion. In psychology, resilience is an individual's ability to
cope with stress and adversity. It is the ability to "bounce back" to
a previous state of normal functioning after a failure or setback.
It is quite natural that every individual will do poorly
during many major life transitions. We will always find it difficult to adapt
to the changing situations. There will be adjustment difficulties during
situations such as switching a job, getting married, becoming a parent,
retiring from service, shifting to a new place etc. While facing negative life
conditions the impact will be more and this can create major problems.
This has huge relevance to trading. All the successful
traders have gone through difficult times. They have tasted defeat. Many have
undergone very significant losses during their learning period. However, they stayed
in the game longer, through sufficient capital and prudent risk management and eventually
enjoyed their success as consistently profitable traders.
Resilience is often mistakenly identified as an individual
trait. In reality it is the sum total of many individual traits and skills. Several
factors are found to modify the negative effects of adverse life situations and
help to build resilience. Here are some suggestions to build resilience
- Build relationships with family, friends and other traders
- Accept everything that you have no control
- Ensure your goals are realistic
- Learn to take decisive action
- Keep a long term perspective.
- Maintain a positive outlook
Prerequisite of a high level of success in trading is a high
level of resilience with respect to loss and defeat. A successful trader is one
who turns losses into gains by generating learning experiences for continuous
self-improvement.
