One of the things I love about what I do here at YTC is the opportunity to chat with other traders, at all stages of their development.
My email archive provides an absolute treasure-trove of information and ideas spanning all areas of this business from strategy to peak performance to business management.
I was reminded of this by two different email conversations in the last week, in which two traders both achieved a similar breakthrough in understanding. I'll share these right at the end of the article, so that we can finish on a real positive note.
But this got me thinking. I don't dip into the email archive enough for inspiration for articles or social media posts.
So let's rectify that today with a surf through my Sent Mail folder.
I thought we should start with a search for some miscellaneous thoughts related to the challenging task of making progress as a developing trader.
Let me start with a phrase that is often repeated in my email replies; perhaps more than any other. It's short and to the point. I'll let it stand on it's own without further commentary. You'll know if it's relevant to you and your circumstances.
Excerpt from an email reply:
When overwhelmed… SIMPLIFY!
Quality of Effort is Perhaps More Important than Quantity
Sometimes less is more!
If you're putting in a whole lot of effort, but finding no consistency in results, perhaps this email conversation will help you refocus in a new and more effective way.
Excerpt from an email reply:
If you're inconsistent in application of your strategy then I think you seriously need to consider WHY you are trading a full session.
If your inconsistency is leading to doubts about the strategy, then again, seriously consider WHY you are trading a full session.
Yes we need to maximise our exposure in order to grow.
But quality is important as well.
At the moment you're trading a full session but life is providing limited time beyond that for effective review processes.
Is there perhaps a better way to use your time?
What if you traded only half a day and used the remaining half for a more effective and thorough review and learning process?
What if you narrowed focus even further and just traded the opening hour?
Let me run with that idea for a second. What if you did this:
Focus on the first hour of the market open. Learn to trade it well.
Trade for 1 hour.
And then follow that up with 3 hours of review and REPLAY.
Study the session from a strategic perspective. Study the session from an execution perspective. Study the session from a human performance perspective.
Find the setbacks. Study them. What happened? Why? Is there a pattern of behaviour repeating here? What can you do to improve in future?
Find the successes. Study them. What happened? Why? How can you achieve more of this in future?
Replay the hour with the benefit of hindsight. What can you learn in comparing your actual performance, with hindsight perfect performance?
1 hour of FOCUS. 3 hours of QUALITY review.
And you've still got half a day then to allocate towards other areas – general reading and study, idea generation, testing and development, personal development. And occasionally, reward yourself with a half day off.
Start with increasing efforts to trade the first hour well. Find consistency and success in this small period of time. Later you can consider expanding this to 2 hours. Then 3. Then 4.
Inconsistency doesn't just disappear because you found an awesome new affirmation. If you're inconsistent in the first hour, you'll be inconsistent in every hour of the session. Narrow focus. Fight to get the first hour working. Then expand.
Stop Comparing Yourself With Others
We all do this. It's natural. But it serves no good at all.
This idea comes up often in my email conversations.
Excerpt from an email reply:
Stop comparing yourself with others. Their results are irrelevant. And for God's sake, ignore what (name removed) says he achieved.
There is no race against others. Only against yourself.
All that matters are your own results.
Whatever they are… accept them. And work to improve from there.
Have you improved when comparing with your abilities a year ago? Great. You're winning. Keep improving. This is the ONLY comparison you need to make.
Work With What You've Got
It can be tough to fit trading around a full-time job and family responsibilities. It seems we can never find enough time to work on our dreams.
But it does no good to dwell on it. Accept it. And find a way.
Excerpt from an email reply:
So you can only manage to trade one half-day per week. Fine! It is what it is. Family and income needs have to take priority.
But you've got one half-day per week.
That's 50 sessions in the next 12 months.
50 sessions to trade. 50 sessions to review and learn from. 50 sessions to get better than you are now.
And maybe next year you'll be able to manage a whole day. And the year after that you might be able to manage two.
Maybe this year you'll do 50 sessions on the sim.
But then maybe next year you'll be able to do those 50 sessions live, with a small single contract position. Building gradual success. Slowly increasing confidence.
Maybe the year after that you'll be able to increase size.
And maybe the year after that, success will lead you to new opportunity and new ideas, allowing you to trade more days per week.
The next year is going to pass anyway. It's your choice how you use it.
The next five years are going to pass anyway. Where you find yourself then, will be a direct result of the decisions and actions you take now.
You've got one half-day per week. Go for it. Use it well.
It's All About Learning To Perform in an Environment of Uncertainty!
Let's finish on a real positive note by sharing excerpts from TWO different email conversations in the last week, in which two different traders both achieved a similar and related breakthrough in their understanding of this game.
I was fascinated that I received these emails within two days of each other. This was what provided the inspiration to dip into the archives for today's article.
Initially I wrote this section with just "notes" taken from my reply, but in editing I've come to realise that unlike the above sections it reads best when you get to experience the breakthrough in the words of the sender.
The lesson for us – sometimes our progress as a trader comes not through small incremental growth, but through sudden and massive leaps of understanding. A paradigm shift!
The thing is though, typically these paradigm shifts are just the end result of long months of trading, review, thought and reflection. Underlying a paradigm shift is often an whole lot of work that remains unseen by other observers. So if you're putting in the work and not seeing results, keep your chin up. Perhaps you're still just setting the foundation for your next breakthrough in understanding.
Enough from me… let's just share the email conversations and wrap up the article.
Excerpt from email:
Strangely enough I was also going to email you yesterday as I also had a significant aha moment.
You said in your book something along the lines of we are operating in an uncertain environment and therefore looking for certainty is never going to work – all we can do is try to enter at good structural locations, with strength and against weakness, and manage our risk accordingly.
While this made sense to me immediately, last night I was looking through some charts and all of a sudden realised that I was guilty of doing exactly that. How the hell do we know what all the other traders in the market, and therefore price, is going to do next? All we can do is assess weakness/strength, get in with the strength and 'likely' future trend and manage the risk as best we can. The R/R will take care of the rest.
I now realise that I was far too focused on winrate and avoiding losses without even realising it and while I'm obviously not going to go all gung ho now, something has definitely shifted subconsciously and I now genuinely feel so much more comfortable with the mindset of expecting the the next trade I place to lose, and the next one, and the next one and not being obsessed with finding the perfect A+++ entry.
Absolutely fascinating how these things just happen from no where (albeit after 100s of hours of chart time and thinking).
Except from reply:
I'm glad you've come to this realisation. It's one of those things that everyone rationally understands and says they get, but it's clear from their actions and behaviours in the market that they don't REALLY get it. I'm not sure it's possible to teach. It perhaps just requires experience and loss and a whole lot of self-reflection and pain.
I'm reminded of something Mark Douglas said in The Disciplined Trader (his first book). "Most people like to think of themselves as risk takers, but what they really want is a guaranteed outcome with some momentary suspense to make them feel as if the outcome had been in doubt."
Trading success is not about achieving certainty. Rather it's about accepting and managing our imperfection within an environment of uncertainty. Expect losses in the short-term. Play to win over the long-term.
Excerpt from email:
Really enjoying your book, just thought I'd share some contradictory concepts & thoughts I didn't expect that are encouraging for me. Besides getting much needed "structure" from your work, (which I lack in all areas of my world), I never expected to experience the comfort in seeing professional traders actually missing opportunities and taking losses. Over the years I've noticed this underlying gut feeling of anger when I get stopped out or miss an entry, no matter how often I've heard to expect losses & missed trades, it never erased or cleared it mentally for me until now. It's been liberating to take the time to heal an issue I never really noticed how much was holding me back.
I've noticed it's been going on for a while and realized I've held a belief that "perfection is the only way to succeed" and it's been keeping me from progressing. It's comforting to read successful traders also go through this every day, and clearly for me it's taken until now to actually feel and connect with this unconscious nemesis and address it.
Thanks for sharing you're weakness as well as your strengths !
Excerpt from reply:
Thanks for sharing these thoughts. It's great stuff. I love hearing when people have these breakthroughs in understanding.
You're right. Belief that "perfection is the only way to succeed" is almost a guaranteed way to fail. It's setting an impossible standard. It's much better, in my opinion, to believe that "accepting, forgiving and learning to manage our imperfection is the only way to succeed."
Now begins a new stage of your trading journey! Exciting times ahead.
There is no greater "personal development course" on the planet, than trading the markets! 🙂
I’ve recently experienced the realisations you shared of both those emails. Such a coincidence. Perhaps those might be amongst the most important? It seems when we’ve been at this for so long until those aha moments emerge it could be the final step before real success can happen. I can’t help but wonder about some other good ones you’ve received. Just reading those was so helpful. Please do a post like this again.
Thanks Goran, I agree that this is probably one of the most important insights in developing as a trader. Interestingly though, I’ve come to the realisation that there likely will never be a final step. I suspect that there will always be new insights and paradigm shifts available to those who keep working at this game. It’s going to be a lifelong journey of new and exciting discovery and understanding.