{"id":6086,"date":"2010-07-25T09:44:40","date_gmt":"2010-07-25T13:44:40","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=6086"},"modified":"2010-07-25T09:44:40","modified_gmt":"2010-07-25T13:44:40","slug":"10x-x","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/10x-x","title":{"rendered":"10x = X"},"content":{"rendered":"

Excellence is the gradual result of always striving to do better.
\nPat Riley <\/p><\/blockquote>\n

Maybe I am starting to get a little old.\u00a0 Maybe the half a generation removed from most of our traders is the difference. Then there is my pending marriage and their out-till-4AM shenanigans.\u00a0 But I see a disturbing trend with a few developing traders and some potential new traders who we interview (interrogate?).\u00a0 I want to emphasize that I see this with only a few.\u00a0\u00a0 These new traders believe that if their work output is X then their reward must be X.\u00a0 If only that were the case.\u00a0 When you begin as a trader, your work output must be 10x to make x.\u00a0 Let’s discuss.<\/p>\n

I do not want you to be in that group of a few. \u00a0 And I have seen this with a few former talented individuals on our desk who consequently were asked to leave (See Why Traders Fail in One Good Trade<\/em> (Wiley).\u00a0 And I see this with a few of our present traders who have all been talked to.\u00a0 And some of these above were the most talented people we have ever trained<\/a>.\u00a0 But that is never enough for the market.\u00a0 Potential absent sustained effort is not rewarded by the market.<\/p>\n

What I see from my seat as a mentor on a trading desk is crystal clear.\u00a0 The developing traders who love trading and work at it do the best.\u00a0 Our most improved trader this month has done everything a developing trader is supposed to do and then more. \u00a0 Much, much, more.\u00a0 Today as he reviews his numbers for the month, there will be a huge smile on his face.<\/p>\n

Little things can make all the difference.\u00a0 Do you watch the markets trade during the midday and search for important levels into the Close?\u00a0 Or do you take a two hour lunch? After the Close, do you obsessively replay your trading day in your head and feed your mind with your best set ups? \u00a0Do you leverage the power of simulation<\/a>? \u00a0Or are you immersed in Fantasy Baseball?\u00a0 Do you take all the time that is necessary to ensure that you are in the best trading stocks for your style before the Open?\u00a0 Or do you settle on the first stock that could work?\u00a0 Do you work on your mental weaknesses by performing visualization exercises?\u00a0 Or do you just assume you don’t need to do stuff like that?<\/p>\n

From my seat most developing traders struggle when they first start.\u00a0 This is all part of the process.\u00a0 And then they have a choice.\u00a0 They can increase their work output to 10x.\u00a0 Or like all traders who fail they can do 1\/2x.\u00a0 After they start doing 1\/2x then their results are inevitably -3x. \u00a0 Traders who decide to do 10x then see x.<\/p>\n

And then with trading experience and a constant work product of 10x developing traders see 2x, and then 3x.\u00a0 And then with this experience their work product can decrease to 9x and see a gain up to 5x, and then 8x for a gain of 6x, and then 7x for a gain of 7x.\u00a0 Only after years of a work product that is not proportionally rewarded can they then see a work product that is properly rewarded.<\/p>\n

In May of 2009 I was at a Hall of Fame dinner for a friend in upstate NY.\u00a0 One of the HOF receipients had passed.\u00a0 His wife spoke in his honor.\u00a0 Her speech was moving.\u00a0 This woman’s accomplished husband had passed and she was still so young.\u00a0 What was there really to gain from this speech?\u00a0 The people in the room respected her husband, which was why he was being inducted.\u00a0 Most of the people were her friends so she didn’t need to impress them.\u00a0 She was retired so it’s not like this was going to help her career.\u00a0 There was little for her to gain.<\/p>\n

And yet this woman inspired the room.\u00a0 With the care she had taken with the preparation of her words she shouted to everyone in the room, “If you are asked to do something then you do it well.”\u00a0 She never uttered these words.\u00a0 But it was in every line as she reflected on the her husband’s life.\u00a0 She had scoured his old year book, called up old friends for anecdotes, and asked her children what\u00a0 was most important about their father.\u00a0 She had worked on this 5 minute speech for days, with almost no reward to herself.\u00a0 In a room filled with mostly retired jocks she left many in joyful tears, remembering the life of her\u00a0 HOF husband.<\/p>\n

We can all learn from this remarkable speech.\u00a0 If you want to be a HOF trader then embrace the value of doing something well for the sake of doing something well.\u00a0 If you are asked to do something then do it as well as you can.\u00a0 There really is nothing else that is as satisfying.\u00a0 For the developing trader, 10x equals x.<\/p>\n

Best of luck with your trading! Don’t forget to follow us on twitter<\/a><\/p>\n