Tuesday, May 22, 2018

Making Your Trading Consistent, Your Learning Intensive

Too many traders focus on going fast--taking more trades, making more big trades--rather than build the consistency that can nourish a career.  Consistency of outcome requires consistency of process.  That means having a rhythm and routine for searching for opportunities--and researching them.  It means having rules for position sizing and guidelines for when you add to positions and harvest profits in those.  Consistency also means having risk limits and ways of operating within them.  My experience is that consistent traders have consistent personal routines, both during and outside of trading.  Bumping up your sizing/risk-taking makes sense if you have been successful and consistent.  Bumping up your risk-taking without consistency is Russian roulette.

But, watching people on the trading floor, I'm seeing one other element in trading success:  teamwork in tandem.  As in military training, developing traders buddy up with one another and dedicate themselves to each other's success.  I describe this development in detail in my recent Forbes article:  teams within teams provide a kind of mutual mentoring.  That allows everyone to learn from each other, and it also provides the emotional and learning support that accelerate a trader's growth.  It's a different take on "each one, teach one".  When you learn one-on-one, you are always the teacher, always the student.  The Forbes post explains how this accelerated learning occurs and why it's so powerful.

When we put together consistency of process and intensity of learning, great things happen.  Many, many traders fall short of their potential because markets change before they are able to adapt.  Just as going to the gym with a partner can help you be more consistent in your workouts and do the exercises with proper form, trading with a teammate enables you to learn in an active--and interactive--mode.  For many traders, this is a total game changer.

Further Reading: