A basketball player goes up for a rebound. Just like he has thousands of times. Only this time, he comes down funny on his leg. He falls to the ground in pain – holding his knee. Everyone is watching.
He is definitely out for the game.
But how bad is it? Is he out for the season? Is it career ending?
You don’t have to physically experience the injury in order to experience it psychologically.
Fast forward a week.
MRI came back and he got lucky. He did not tear anything. No surgery needed and even though the doctor says he is ok to play, the painful memory of coming down on his knee wrong is still alive and well in his mind.
He goes back to practice but mentally is not 100% - as he clearly is tentative under the rim fighting for rebounds.
He is afraid of getting hurt again.
His mind is thinking, “I got lucky last time. But what if I don’t get lucky next time?”
The Fear of Re-injury (F.O.R.) exists for traders/investors/portfolio managers as well.
Most did not get destroyed (some did) by the Swiss move, but everyone saw it happen. And as a result, the danger is psychologically real to everyone.
Symptoms to look for to see if you are experiencing a Fear of Re-injury:
* Cutting winners too soon
* Putting on much smaller position sizing – even though you have high conviction in the trades
* Overall trading/investing scared (rather than based on your process).
Simple Solutions to get your head right so you can get back in the game with confidence:
* Put a plan in place to gradually increase your starter position size over the course of the month i.e. 10% at a time. This will create what is known as gradual desensitization.
* Establishing (before you initiate a position) specific game plans for entry/add/exit levels. Then stick to them without exception. This will increase your confidence because it gets you back to trusting/reminding yourself that you can do damage control if needed
* Document at the end of the day any fear based emotions you are experiencing. This will allow you to take ownership of them and compartmentalize them moving forward.
While in recovery from your F.O.R, don’t worry about trying to get trades right or even trying to make money. Your focus has to be on getting your mind-right so you can mentally get back in the game for the next 11 months.