Monday, 7 June 2010

The Yips

I was watching a show on TV yesterday called HUMAN TARGET  starring one of the Guys that used to be in Boston Legal and another guy that was in a few episodes of House. He had to fight but for some reason he had some sort of issue and couldn't unleash his inner self and do what had to be done. They looked at the problem from a few different ways and finally decided his problem was that he "had the yips".

I immediately saw the parallels in trading. Something that interferes with us keeping our discipline and sticking to our trading plan. My wife was researching the issue and found this quote on the web, but relating the issue to golf:
In trying to get to the root cause of yipping, we typically find that some past event triggered in a player's mind a sort of mental self-destruct button. For example, you identify a putt that really meant something, a putt you really wanted to make, and missed. And the whole thing gets blown out of all proportion. As the (self-inflicted) mental anguish escalates, the significance attached to that one event affects the way you approach the next putt.
The whole piece can be found at

It was interesting to note that in both the TV show and in the web article, it was referred to as "the yips".

I have often written about the importance of developing that "muscle memory" in SIM. To me, that has always been the solution to "the yips". I believe that if you take away the financial consequences while you develop the automatic responses to market situations you can put yourself in the right frame of mind to deal with live trading. That is not to say that if you are CP in SIM that you will automatically be CP live, because that is not true. But what is true is that by the time you go live from SIM, if you have become CP in SIM then you have resolved ALL the issues of trading EXCEPT the one relating to risking real money. This leaves you only one issue to work on.

I want to say here that often the issue is that traders move from SIM to live too early. If that is the case then moving back to SIM is the first thing to do. The other issue is that "I have to make money". Putting yourself in this position is almost a guarantee of failure. With electronic trading, it's possible to keep your day job and trading live going in parallel. This is a good thing to do as it takes away that "must make money" mentality.

We are going to address all these issues in the training under the heading of "How to Learn this Stuff". Again, trading is much more than reading about a couple of good setups and opening a brokerage account.

1 comment:

  1. Here's an example of the opposite of the yips: A 19 year-old Tiger Woods steps up to a putt and knocks it in without thinking twice to win his first pro tournament. When the interviewer asks him if he was nervous standing over a putt for $600,000, Woods said, "Why should I be nervous? It's not my money."