Saturday, June 06, 2015

Becoming Better By Building Routines...And By Shattering Them

If you're looking to make changes in your life, you can't live a static life.  Routine is the friend of efficiency and the enemy of change.  Routines are great for turning best practices into best processes.  We need routine to cultivate positive habit patterns.  When we seek change, however, we need to break routine.  Not just tweak small changes around the edges, but shatter routine and engage in wholly new activities and old activities in wholly new ways.

Marriage is a great example.  A good marriage has its routines.  In my household, there's a Saturday morning routine for collecting the garbage and bringing it to the dump; routines for feeding our cats; routines for keeping the house organized; and even a morning routine for preparing coffee and breakfast.  Life runs smoothly because of those routines--and that allows us to focus on life's not-so-routine challenges.  But if a marriage becomes nothing more than a collection of routines, a great deal is lost.  The romance that brings people together thrives on fresh, shared experiences.  People stop feeling special to one another if they don't engage in activities that are special.

Hence this week's trip to Jackson, WY, the Grand Teton mountains (above, top), and Yellowstone National Park (above, bottom).  Off the beaten path, you see beautiful things--and amazing things happen to you, like stumbling across that elk who decided to hang out near where our car was parked.  Nothing is quite so special as sharing special experiences.

It's very relevant to trading.  The routines of trading are what enable us to process market information efficiently and stick to what we do best.  If you identify a best practice in your trading, the best thing you can do is transform it into a robust habit pattern.  A definition of good trading could be:  doing automatically what you would ideally do by choice.

But if all there is to trading is routines, we're poorly positioned to adapt to changes in markets.  McDonald's succeeds as a company by making hamburgers the same way at each store, ensuring quality and uniformity of experience for customers.  But McDonald's cannot afford to do the same thing in perpetuity.  It's the new menu items and fresh store designs that enable successful restaurants to stay successful.  It's the reworking of old trading processes and the addition of new ones that enable traders to stay profitable when markets go from trending and non-volatile to volatile and choppy.

Trading success comes from molding ourselves and continued success requires periodic breaking of the molds.  I have met many traders who began their careers with a romance with markets and gradually have become stale.  A job becomes a career becomes a calling when we become married to our life's work.  Too often we work on cementing the routines of our careers, only to stop generating the fresh experiences that sustain our passion.

What have you learned this week, and how will you use that lesson to make yourself a very different trader?

What new trading approaches have you generated this year, and how are you using those to sustain your learning and enthusiasm for markets?

There is a world of difference between the person with five years of experience and the person who repeats a year's experience five times.

Further Reading:  Changing the Viewing by Changing the Doing