3 Comments on “The First Step to Trading Success”

  1. The point you make of the gap between domain knowledge (understanding a setup or pattern) vs. executing it profitably is something I am very familiar with (I’m about 4 months into fulltime daytrading). 

    It’s a terrible feeling when you know what’s going to happen, but you still get suboptimal results on your execution.  Or worse, losing money on a trade that ends up doing just what you had expected.  Ugh.

    Thanks for the great tips on how to close the gap.  So far, I’ve found keeping a journal very effective.  One metric I track is the “opportunity costs” (what I could have made/avoidance of a loss) of a trade I executed less than optimal or should not have even taken.

    It can be quite surprising/shocking to see, but a great way to learn and to keep motivated (I can see the potential of what could have been).  A good day for me is if my opportunity costs are minimal or non-existent, since that means I followed my strategy well.  I still have a lot of work to do, but I love the challenge.

  2. Bella, great video with clear explanations of what it takes to become an elite trader/performer.  I’m reading “The Talent Code” by Daniel Coyle and he gives some thoughtful insight into what you talk about in this video clip.  Deep practice, which is trying, failing, trying again, failing some more, thinking about it slowly, piecing your practice into chunks, trying again, failing again, but eventually with enough time in the zone of deep practice you become an expert in your craft.  We know the magic # is 10,000 hours 🙂 and that’s why intrinsic motivation is so vital. It requires a great deal of energy and time, and if you don’t love what you do you will never work hard enough to become great.

    I’ve noticed as a trader I’ve made a lot of mistakes: revenge trading, over trading, trading against the trend, selling at sup (capitulation), buying into res (euphoria), not controlling my emotions, letting greed and fear dictate my decisions, following other peoples advice without thinking through the trade, showing up at 9:15 AM expecting to make chops without adequate preparation (you can’t turn it on it off…pro athletes and teams can’t either if they want to succeed long-term), paid more attention to my results and wanted to be right. 

    As traders we read about self-mastery through self-discipline, but it’s one thing to read it and another to actually be in the trenches while the activity is in the present moment.  You can’t put a price tag on actual practice and experience.  Trust me, I have so much to learn.  I’m grateful for the mistakes I’ve made, because they bring me that much closer to my goal of becoming an elite performer!

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