Saturday, October 28, 2017

How Individual Traders Can Benefit From Teamwork

An interesting post from Adam Grimes explores the limitations of modeling successful people in trading.  There is much more to success than merely copying what others are doing.  And yet I find consistently that the greatest success among developing traders comes from working within teams.  For the last couple of days I've been working at a firm where all traders operate in teams and the teams operate within larger trading groups.  Every two weeks the traders meet in their groups to review performance, set goals, and learn from the experience of others.  The team leaders talk about their trading and that sets an example for the other traders.  Quite literally, teams expand the number of role models possible to a trader.  We learn, not from merely copying others as Adam points out, but from understanding what they are doing and how.

Seth Freudberg heads up the Options Tribe at SMB, where traders, operating from their own home locations, learn specific options strategies and then meet as a virtual team to work on performance.  Every month I get a P/L statement from Seth regarding the team's performance, so I see how well the development of the traders has progressed.  The returns have been very positive and consistent, and that is because there has been teaching by example.  Seth trades the strategies, shares his mistakes and successes, and establishes a culture where every participant is both teacher and student.

The mistake developing traders make is viewing education as a one-way process, where there is a teacher with all the wisdom and knowledge and students who absorb it all.  The team approach features the leader as an advanced student.  This creates an environment in which sharing becomes the norm and everyone takes responsibility for the development of others.  The advanced students learn from each other and also from the ideas and successes of the newer students.  Those newer students absorb the lessons from the more experienced role models.

Want to immediately benefit from the power of teams?  Find just one study partner for 2018:  someone you will work with in tracking markets, learning from successful and unsuccessful performance, and having fun in growing as a trader.   In traditional Jewish settings, learning occurs chavrusa-style, where students pair up and intensively prepare for lessons and challenge each other to come up with new and deeper understandings.  Just one study partner can create a dynamic learning environment.

There are more resources out there than ever, including valuable training resources.  (I see Adam has come out with a new book to guide traders through his free online course).  We can team up with others participating in trading communities (great way to find like-minded study partners) and create review processes that supercharge our trading.  Teams keep each other focused, they keep each other motivated, and they create multiple role models.  Show me a successful businessperson, researcher, or athlete, and I'll show you someone who has benefited from teamwork.  A great goal for 2018 is to double down on teaching others--and learning from them as well.