Sunday, August 23, 2009

Social Networking and Trading Success

I start with a few basic premises:

* I have something to offer selected, others in the trading world;

* Selected others have something to offer me;

* I don't know who those others are, but I can find out.

So every week, I make it a point to "cold call" at least one trader or industry professional who seems to be a kindred spirit.

* Half of all my contacts are not returned;

* Half of the contacts returned result in polite thank yous and nothing more;

* Half of the remaining contacts result in pleasant social contact and nothing more;

* Half of the pleasant social contacts peter out after a short while;

* The remaining (roughly one in sixteen) contacts prove to be highly mutually fulfilling.

So every year, I add on average three professional soulmates to my network, as they add me to theirs. We learn from each other and further each other's work; we keep each other going during tough times and are there cheering on the sidelines during times of victory.

With 15 out of 16 contacts ultimately "failing", you could say that I'm not very good at networking.

With a network that grows year over year, you could say that I'm a raving success.

Both are true.

It's the "failed" outreaches that lead to the successes.

How similar to trading: You have to lose to win. And you have to embrace the losses to find the victories.

.

4 comments:

FreeStyle Trader said...

great post thanks

BalaB said...

Very relevant post. I was just speaking with a gaggle of traders who find great value in your posts. All agree it would be very cool to have a forum for discussing relevant topics / findings intraday that relate to your (and a few others') postings.

We may take the initiative and launch something independently. While there are 'challenges' to the idea, it may still be worth trying.
Who knows? Maybe we'll find some synergies, may be it will be giant failure......

Jorge said...

Dr. Steenbarger,

I understand that you only offer a peek into your "Idiot Wave Manuscripts" to selected few ;), ok, ok, you offer your coaching, but what do you look for when you network? Global/macro views? People with an inside view at capital flows?

Your trading style seems to have been quite consistent over the last years, so do you just look for ways to fine tune your trading or timing or are you open to changing your style and/or markets, methods, etc?

Also, even though it would reasonable to expect that many traders are secretive about their trading and/or simply prefer to work alone, not having half of your calls/contacts returned at all - apart from reflecting poorly on those people - is a quite high rate considering your status in the trading industry (it's not the same as if prop firms/banks, etc. weren't answering cold calls from anonymous college graduates asking for employment). So, have you considered some sort of filter, based on your experience or does the outcome of the calls seem totally random to you? Maybe there's a pattern there :D

Sorry for the many questions, but this really comes as a surprise.

Best trading,

Jorge

Michelle B said...

Your approach embodies the very spirit of experimentation. One of my mentors is great at experimentation (unlike me) and encourages me gently to try a solution, just to try it, not to apply it for a desired outcome, but just to play around with it and see what comes out of it, and take it from there. This is very hard to do.

Though we are often encouraged to think outside of the box, be original, etc., experimentation is not actually fostered in our work culture. It is considered to be non-professional and wasteful of time.

After all, you are supposed to be an expert and know everything that there needs to be known. And that familiar and ingrained work culture clashes with the one that is needed for finding fresh edges in trading.