Let’s say I told you I wanted to improve my golf game. Specifically I wanted to get better at driving the ball. Currently I can drive the ball about 250 yards because I am no good 🙂 And I continued that yesterday I worked very hard on game. I went to my local driving range, parked the Lexus (the car I probably would own if I lived in the suburbs), took out my Phil Mickelson Calloway Driver (obtained through a special contact of Dan Mirkin of Trade-Ideas), and hit ONE drive. Then I hit the clubhouse, ordered the cheeseburger special (they have this proprietary mayo sauce that is delicious) washed down with a Sam Adams Summer Ale in a chilled mug, packed up my clubs and headed home to catch Sportscenter. What would you think about my chances of getting better?
The challenge with trading is that often we get ONE opportunity to trade a particular trading set up per day. And then most pack up their things and head out. We set a goal to improve our breakout set ups. And then an eight hour work day gives us ONE breakout trade. How can we get better trading breakouts with such limited opportunity to work on this trade?
If you thought it absurd for me to get better at golf hitting ONE driver of practice, then what do you do each day with your trading that is analogous to hitting a bucket of drivers?
Mike Bellafiore
Author, One Good Trade
8 Comments on “A Bucket of Trades”
I’ve gone of periods of over-trading, and nothing good has come of it. If we hit a “bucket of stocks” every day, I believe we’d be severely over-trading and running our accounts into the ground. When I first started trading, I realized that I’d have to make the most of every trade and every loss so as not to go through the expense (both in losses and commissions) of over-trading.
The only way I believe we can make one trade count as much as a “bucket full” is by doing an in-depth analysis of every trade, every day. A golfer at a driving range probably doesn’t stop to think too much about what happened to each ball he hit, but after every stock I trade, I make notes in a journal and always record an end-of-day audio analysis of my trading. I think it has helped me to pinpoint my weaknesses and progress much faster than I ever thought I would. At times, one might risk over-analyzing everything that happens, but I guess that’s where balance comes in.
great analogy. interesting how it seems that to perfect anything in life requires the same process. As for the Summer Ale, I believe you’re in denial that its now time to switch to Oktoberfest !
great point! Oktoberfest it is 🙂
To be clear hitting a bucket of balls is practice. How do you as a trader hit a bucket of practice balls so you perform better on the course?
I see the point that practice is good, and I would like to add that perfect practice makes perfect.
how about practicing your trading but actually be hitting a full bucket on the course. the following link is what i mean.
http://traderfeed.blogspot.com/2007/07/bridging-gap-between-hot-and-cold.html
I’m very curious about this also. As someone who’s shifting to trading full time, and who’s also mentoring himself, I’d like to find more guidance on deliberate practice that allows for immediate feedback.
When I practice golf at the range, I’m creating mechanical consistency, so that I can reach a state where tweaking one variable won’t destroy my entire swing. I work to find this correlation with trading.
I think one of the keys is structuring practice so that it isolates a portion of trade evaluation into a mechanical skill, or maybe more accurately, something that can be repeated with consistency. For example, when I began learning to trade, I wanted to distinguish between a trend and a range day earlier and earlier in the day. I have a set of 5min bar screen captures from each trading day of the last year. So what I did to practice this skill was to randomly pull one from the pile, while covering it with a sheet of paper. I would then slowly reveal each 5min bar from left to right, and when I felt that I knew the context of the day, I would write down why. I then lifted the paper to see if I was correct. That gives me the immediate feedback.
But there was a problem. I looked at too many indicators. I could see that from my list of reasons; they resembled divination more than evaluation. There was no consistency. So that led me to distill my practice even further. I would use only the price, volume, and MAs. That worked better. I didn’t quite have an edge, but I began to see consistency, which meant I could make changes or additions without it being random noise. I could also search for articles or identify stats more targeted to what I was attempting.
nice work, explains a ton as I always choose trade review over hitting balls when free time opens up!