In a recent Forbes article, a special operations leader made use of the term "battle rhythm". His point was that businesses tend to operate on cycles of observing, planning, and implementing that are too slow for the business landscape. SEAL teams have to work with rapid battle rhythms, as the battlefield is ever-changing. This means that teams are highly active and interactive, continually gathering information and processing that information to shape tactics and strategy. Operating in a fast environment with a slow battle rhythm is like drawing a sword in battle and moving slowly. If it's a sword battlefield, you need dancers, not plodders.
This helps to explain why many traders either fail to make money or fail to perform consistently: their battle rhythm does not keep pace with their trading frequency. In other words, they may plan once a day (early in the morning) and then fail to adapt when markets change character and direction during the day. If your trading is much more frequent than your planning, eventually you'll get stuck when markets zig instead of zag.
When we see a trader who can place many trades per day and make money consistently, we tend to marvel at the speed of his or her pattern recognition. In talking with these traders, however, what jumps out is the speed of their decision-making processes. They truly work with rapid battle rhythms, constantly taking in market information, assessing its implications, and shifting tactics accordingly. One trader I recently met with rapidly switched from trading individual stocks making idiosyncratic moves to trading the broad indexes and back again solely on the basis of how things were moving relative to each other.
When our battle rhythm doesn't keep up with our trading, we set the stage for inevitable frustration. The market will change more quickly than our planning will adapt. Success requires that we trade a time frame that is longer than the time it takes us to observe market conditions, make sense of them, and figure out their relevance for our trading. We overtrade when we place new trades faster than we can engage in new thinking.
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This helps to explain why many traders either fail to make money or fail to perform consistently: their battle rhythm does not keep pace with their trading frequency. In other words, they may plan once a day (early in the morning) and then fail to adapt when markets change character and direction during the day. If your trading is much more frequent than your planning, eventually you'll get stuck when markets zig instead of zag.
When we see a trader who can place many trades per day and make money consistently, we tend to marvel at the speed of his or her pattern recognition. In talking with these traders, however, what jumps out is the speed of their decision-making processes. They truly work with rapid battle rhythms, constantly taking in market information, assessing its implications, and shifting tactics accordingly. One trader I recently met with rapidly switched from trading individual stocks making idiosyncratic moves to trading the broad indexes and back again solely on the basis of how things were moving relative to each other.
When our battle rhythm doesn't keep up with our trading, we set the stage for inevitable frustration. The market will change more quickly than our planning will adapt. Success requires that we trade a time frame that is longer than the time it takes us to observe market conditions, make sense of them, and figure out their relevance for our trading. We overtrade when we place new trades faster than we can engage in new thinking.
Further Reading: