Friday, June 10, 2016

Succeeding As Your Own Trading Coach

Landry's quote is a great one.  What it really says is that reaching our potential means that we have to face uncomfortable truths.  If what made us comfortable was what made us great, everyone would be a super achiever.  Sadly, that's not the case.

I recently gave a talk to a group of traders and interrupted the presentation to ask each person to tell the group the most exciting idea they had come across recently and how they were incorporating that idea into their trading.  

The silence was deafening.  When a few ideas did come out, they were very general ideas about performance--nothing specific to markets.  That told me everything I needed to know.  These were market participants who were not hearing what they didn't want to hear and seeing what they didn't want to see.  They were in their comfort zones.  They were static.  They were in the process of being left behind by evolving markets.

I'm writing from Oslo, Norway.  I woke up last night with an unsettling thought.  What if the entire narrative approach to markets--turning data (fundamental, geopolitical, technical) into a directional, narrative thesis for trading--no longer works?  It's not just that markets respond to different narratives.  It's that markets have become sufficiently complex that simple narratives cannot capture the significant patterns that are present.  For example, we can predict the likelihood that a fuzzy camera image of a person actually *is* that person, but narratives have nothing to do with the predictive process.

This kind of thing happens whenever we travel to remote locations.  Getting away from routine helps stimulate new thoughts, often uncomfortable ones.  I have no f***ing clue as to whether the death-of-narrative idea holds water, but I'm quite sure I'll dig up a platform for investigating complexity in market behavior and see if there are patterns outside of simple interactions of variables amenable to storytelling.  

I've described the coaching process as comforting the afflicted and afflicting the comfortable.  Both push us outside the states we're in to see different realities.  The most successful traders have internalized that coaching that process.  Coaching is not merely something they hire; it's something they actively do.  Seeing new things, asking new questions, learning new skills--pushing, pushing to be more than you are at present.  That's the essence of a true competitor.

Further Reading:  Every Great Trader is a Player-Coach