“Trend following is an exercise in observing and responding to the ever-present moment of now.” — Ed Seykota, Source: Seykota.com
Daily life is filled with distractions, and since it will continue to be, a trading system in place will help to minimize them. If you don’t have a trading system, or written out rules, you’re going to have a hard time. If you try to jackknife your trading decisions into place without knowing in advance why you are making those decisions, you set yourself up for a fall. If your trading is anything less than precise, you’re even more vulnerable to daily distractions. Trade after working hours? There are other distractions to cope with such as long commutes, family and social obligations and just plain exhaustion. Trading systems, well thought out in advance, can help to mitigate distractions and breed confidence. Effectively cutting through distractions invariably requires a longer-term strategy.
Trend Following enables you to deal with day to day distractions since all of your if/then contingencies for any given day are decided the day before. There is no guessing what to do or second-guessing what you did. You know how to handle all market eventualities before the distractions of each day begin. Handling distractions demands white hot focus. Trend Following gives you a structure to trade within and rules to trade by. It shuts distractions out. Each day, before the market opens, you know what you will buy or sell, how much you will buy or sell, etc. There is a very good chance you will do nothing on most days.
This is the structural answer to the distraction problem. Decisions made under distraction are worse than decisions made when clear-headed and free of pressure. A trading system solves this by moving the decision-making entirely out of the distracted moment. You do not decide what to do when your commute was brutal, when family obligations crowded your thinking, when you are exhausted from work. You decided all of that yesterday, or last week, or when you built the system. Today you only execute. Execution is simple. Decision-making under distraction is not. Trend following separates the two entirely. For the specific if/then rules that define what to do in every possible market condition, see the TurtleTrader rules.
Passion as the Foundation
Once you have your system though, as Charles Faulkner reminds us, trading demands passion (Charles Faulkner quoted in The Intuitive Trader, by Robert Koppel):
The people that I know who are the most successful at trading are passionate about it. They fulfill what I think is the first requirement: developing intuitions about something they care about deeply, in this case, trading. They are the people who study years of charts, or commodity annuals…They develop a deep knowledge of whatever form of analysis they use. Out of that passion and knowledge, their trading ideas, insights, and intuitions emerge.
Faulkner’s observation completes the picture. Rules cut through distraction by removing the need for real-time decision-making. But rules without passion produce mechanical execution that eventually breaks down under the psychological pressure of drawdowns and extended losing periods. The traders who sustain their discipline over years and decades are those for whom the trading is not just a job but a deep interest. They study charts not because they have to but because they want to. They develop genuine intuitions about how markets behave, which supports their ability to trust the rules even when the rules produce temporary pain. The passion is not separate from the discipline. It is what makes the discipline sustainable over a long time horizon. For more on how Charles Faulkner approached the psychology of systematic trading, see his full profile.
Motivation and Achievement
Expanding on Faulkner’s wisdom, Daniel Goleman speaks to motivation and passion:
If there is one trait that virtually all effective leaders have, it is motivation. They are driven to achieve beyond expectations — their own and everyone else’s. The key word here is achieve. Plenty of people are motivated by external factors such as a big salary or the status that comes from having an impressive title or being part of a prestigious company. By contrast, those with leadership potential are motivated by a deeply embedded desire to achieve for the sake of achievement.
Goleman’s distinction between external and internal motivation maps directly onto the trading experience. The trader motivated by getting rich quickly, by status, or by proving something to others will struggle through every drawdown because the external reward is absent during those periods. The trader motivated by the intrinsic challenge of building and running a sound system will find the drawdown periods as intellectually engaging as the winning ones, because the question throughout is the same: is the system working correctly? That internal orientation is what makes the long-term commitment to a systematic approach possible. Trend following is not a quick path to any outcome. It is a rigorous, ongoing exercise in discipline, adaptation, and continuous learning. The people who thrive at it are the ones who find that process genuinely compelling, not just the outcome it eventually produces. For more on the broader trend following framework and the psychology of sustaining it over time, see the TurtleTrader story.
Frequently Asked Questions
How does a trading system help manage daily distractions?
By moving all decision-making out of the distracted moment. All if/then contingencies for any given day are decided the day before, using the system’s rules. When the market opens, the trader does not decide what to do. They execute decisions already made. There is no second-guessing, no real-time judgment under pressure, and no vulnerability to the distractions of commutes, family obligations, or exhaustion.
Why is precision in trading important for handling distractions?
Because imprecise trading requires continuous judgment calls. If you do not have exact rules for entry, exit, and position sizing, every market development requires a new decision. Each of those decisions is potentially made under distraction. Precise rules eliminate the decision entirely. The rule handles the situation. The trader executes the rule.
What role does passion play in systematic trading?
Passion provides the motivation to study markets deeply, develop genuine understanding of the approach, and sustain discipline through difficult periods. Rules cut through distraction mechanically, but only passion sustains the commitment to follow those rules through extended drawdowns and losing streaks. The traders who last are those for whom the trading is a deep interest, not just a means to an end.
What is the difference between external and internal motivation in trading?
Externally motivated traders are driven by wealth, status, or proving themselves to others. When results are poor and those rewards are absent, their motivation collapses. Internally motivated traders are driven by the intrinsic challenge of building and operating a sound system. Their motivation remains consistent across winning and losing periods because the process itself is the reward. This internal orientation is what enables the long-term commitment required by systematic trend following.
Trend Following Systems
Want to learn more and start trading trend following systems? Start here.
