All posts in "Day-Trading"

Winning At Trading By Being Different

 

Winning At Trading By Being Different

I love Porter’s quote; it summarizes so much of what I’ve found in working with traders.  The really good ones deliberately choose to be different.  They look at things others don’t look at; they view the world through multiple lenses.  This enables them to find unique opportunities.  

There is a great post from Ivanhoff Capital that summarizes the trading strategies of a successful money manager.  In that post, you can see how James Mai is playing on a multidimensional chess board, viewing markets short-term, long-term, and through the lenses of price change and volatility.  He has a clear idea of where and how markets misprice risks, and he is willing to make many small, losing trades to find a limited number of large winners.  I heartily recommend you read his ways of viewing markets, just as a way of appreciating how a successful trader deliberately chooses to be different.

And how do traders learn these different ways of thinking?  By being exposed to other traders who perceive and exploit unique opportunity.  When an early career trader is brought into a trading firm, the single best predictor of his or her success is the degree of mentoring that occurs at the trading desk.  When new traders are left to their own devices to sink or swim, they frequently sink.  When traders are brought on as trading assistants and learn their way from the ground up through a mentor, they absorb ways of thinking about markets.  Smart training programs allow their new talent to rotate from one trading desk to another, so that they absorb a variety of ways of thinking about markets.

This is why I occasionally post on research I’m doing, creating such measures as “pure sentiment“.  I’m illustrating a way of thinking, whether you follow that particular measure or not.  

After all, learning from example is why developmental efforts from plumbing to psychotherapy to medicine are structured as apprenticeships.  We learn by absorbing the wisdom and experience of masters and then by integrating that learning into our own, unique style.  We can deliberately choose to be different by exposing ourselves to different talent and ideas.

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Published at Mon, 31 Oct 2016 09:19:00 +0000

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What It Takes To Truly Trade In The Zone

What It Takes To Truly Trade In The Zone

Greg Louganis’ quote speaks a vital truth about peak performance.  Many of us seek mindfulness through meditation when we are still, in a quiet environment.  Peak performance demands something yet greater: the maintenance of the clear, mindful “zone” while we are in motion–that is, while we are performing.  

A major challenge for traders is that we become so market-focused and caught up in chats and news flows that we lose the zone.  We become frenzy in motion, not meditation in motion.

The recent article I wrote for Forbes addresses this dilemma and offers a unique solution: using a simple calendar app to sustain deliberate practice and the peak performance mindset.

Imagine being a trader and reviewing your performance and setting goals each week.  Now imagine turning the wheel faster and creating rapid review and goal-setting processes each day.  Quite simply, to use a gym analogy, you’re getting more reps than the person who comes into the weight room only occasionally.  Learning has the potential to become elite development when every day of performance also serves as targeted practice.

Why is this important?  It’s because there is a mutually reinforcing relationship between peak performance and peak emotional experience.  It is when we push our boundaries and expand our competence across all areas of life that we are most likely to experience happiness, fulfillment, energy, and closeness with others.  And it is when we are most energized by positive experience that we’re most likely to channel that energy into meaningful development.

Many traders sense that it wouldn’t take much to bring them to that next level of performance.  I suspect they’re right:  they just need more and better reps in life’s gym.

Further Reading:  Turning Your Calendar Into A Peak Performance Tool

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Published at Sun, 23 Oct 2016 23:24:00 +0000

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Are You Operating in Peak Performance Mode?

Are You Operating in Peak Performance Mode?

How many of the following apply to you?  Please answer true or false to each item:

I’ve clearly and visually mapped out my trading process, from the ways I collect information and generate ideas to the ways in which I express those ideas as trades (and as constituents of a portfolio), enter and size positions, manage and adjust positions while they are open, and exit trades.     True     False

I’ve clearly and visually mapped out my personal process to maximize performance, from how I sleep, eat, exercise, socialize, and utilize my non-work time to sustain a peak state.     True     False

I explicitly keep score in written fashion, not just with my profits and losses, but with each component of my trading and personal processes to see what I’ve done well and what I can improve in process terms.     True     False

I use my trading and personal process scores to explicitly identify written goals for improvement and the concrete steps I will commit to in order to achieve these goals.     True     False

I keep a written scorecard of my performance vis a vis each of my goals to track my progress and, if necessary, make adjustments in how I pursue the goals.     True     False

I use my scorecard to make ongoing adjustments to my trading and personal processes, so as to turn initial improvements into ongoing habit patterns.     True     False

Every trader goes through losing trades and losing periods.  When we’re not in peak performance mode, losing money is a fail.  In peak mode, losses become First Attempts In Learning.  Peak performance mode is our way of committing ourselves to growth and improvement; it’s our way of becoming accountable to ourselves.  Merely writing in a journal does not ensure deliberate practice and ongoing improvement.  We become better by keeping score in process terms and continually refining our personal and professional processes.

Further Reading:  The One Trading Drill That Can Improve Performance

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Published at Sat, 22 Oct 2016 10:48:00 +0000

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