How do you learn to trade successfully?
Find those traders who are long-term, consistently successful. Watch what they do and how they do it. Listen to what they say. And then you do the same. Simple. Your probabilities of success are going to be so much higher than most others who have not had the opportunity. How do you get to watch successful traders? Ask them! Sure some will say “no”, but not all of them. And if you haven’t got the chutzpah to simply step up to the plate and ask – forget trading – because you’ll need to be far more brazen with yourself than you ever will with anyone else. Find out, perhaps even from these boards which traders seem to have what it takes and ask them if they’d be willing to let you come watch them trade for a day, an hour – whatever. Don’t assume if they say no they’re no good or mean. Some folks feel comfortable helping in this manner, some don’t. That’s all.
If you can’t get free time with a trader, buy time with a trader. If there are professional trading coaches or mentors and they have a good track record – buy some time with them. You may encounter a degree of anti-commercial feeling from some on this issue, but I’ve never understood why this is. You don’t resent any other professional charging for their time, efforts and skill. You don’t refuse to pay for a book written by a trader. Just make sure the trainer is going to give you what you want or at least – you know what you’re going to get. With a book you can skim thru it to make sure. You can do much the same before spending money and time with a trainer. Ask around. Of course, getting it free is going to a whole let better on your bottom line and if you’re lucky enough to get contact with one or more mentors on a friendly basis, you get all the good feelings that come from a non-commercial relationship too. There’s no guarantee paying for training will put you in any better position or do so more quickly than other method, but if that’s all that’s open to you and all the appropriate due diligence is carried out, treat it as an investment.
What if your time, free or not, with your trading mentor or trainer turns out to be less than useful? Depends. How do you know it was not useful? What have you learned you haven’t realized you’ve learned? What aspects do you feel were not covered? Why not? Whose fault was that? Right! Start taking responsibility. While you’re a recipient of free knowledge from a mentor you need to observe the appropriate conduct and etiquette for your position, but you can still ask questions you want answers for. Might not always get them, directly, but you can ask. With a paid trainer you can be more direct, though politeness is always in order. Sign of a pro trader. A real pro trader. Politeness is the sign of a pro in anything.
If you can’t find a mentor who will work with you or can’t afford to buy time then you’ll need to use books and bulletin boards. Books are a very cost effective way to learn about anything, especially if you use a library. Bulletin boards also, but you may need to cut thru a deal of chaff to find the seed you’re looking for. Knowing which is which is harder than you might imagine. Writing style counts for little. It’s tough, much tougher than getting time with a pro, but it can work.
Concentrate on the characteristics of trading personality first and foremost. Do not allow yourself to become dazzled by systems and methods and indicators and talk of big profits. The profits come as a consequence of conduct and personality. They don’t come before. Actually, sometimes they do come before. But that’s a big mistake. Profits accrued ‘accidentally’ are normally given back to the markets a few times. That’s the harder way to learn. Your choice of course.
Is cultivation of your personality going to be easy and fun? No! Are you going to be able to stay focused enough to do it? Unlikely. Maybe one in a one thousand will. I’m plucking that figure from the air, but it is based on what I feel, with a great many years in this business, represents a reasonable approximation based on the numbers of would-be traders I’ve met compared with those who have made it. There will be an almost unbearable desire to get back to what attracted you to the markets in the first place: easy profits, easy living and the patterns! What you are going to need to do is to remodel your personality in order to accommodate the raw information presented to you by the markets. Without judgment. You are going to need to understand in an almost visceral way, the basic mechanics of the markets and the role each of the market participants play within those markets. There’s no way round this if you are truly seeking success in this endeavor. To say it is painful – physically and mentally – is not hyperbole. The impact on your currently ‘normal’ life will be immense. People who know you well now, friends, relatives, family will wonder what is happening to you. The dedication required to this art is nothing less than everything you have right now. And you will probably not understand me when I say the effort you will eventually have had to put into the exercise will be so far beyond your current comprehension of what you think is humanly, physically possible for you that if I were to give it all to you in one go – you’d think me mad. If you don’t already. You will exist, while trading at any rate, in a universe quite different to the mass of humanity.
Are traders born or made? It is quite pointless to enter into the Nurture v Nature debate on development of successful trading skills or any other topic. It has been demonstrated to me quite conclusively this is impossible to prove one way or the other. We can but try. Ability and opportunity. Control.
While it’s true successful traders do usually have a quite distinct and quite separate trading personality to there everyday personality, they don’t normally start out attempting to develop it as a separate entity – it just ends up that way for the most part. But there’s nothing stopping you doing exactly that. I would recommend you do precisely that.
What are the personality characteristics of successful traders?
Unassuming. Modest. Almost serene. Aware. Objective. Not at all the ‘Wall Street Trader’ macho, dog-eat-dog type portrayed in the movies. More the Robert Redford type in the movie “The Natural”. Good movie. Analogy and metaphor are very powerful. And you can use them on yourself just as easily as others. I recognize these traits among pros in many, quite disparate areas of enterprise. Not just in trading. You get it a lot in those people who develop skill in craftwork. I don’t know what that connection is. As I said above, it’s almost like a separate personality. In the bar, at the game – they are amiable, quiet, confident, intelligent. Good company. When trading – they appear to others as direct, almost brusque. A hard edge. You see, it isn’t a game. They are quite Selfless when they trade. It isn’t ‘them’ that you see or experience (the ‘them’ you were with in the bar or at the track).
They keep their own counsel. You’ll feel as if they’re holding back. They are. And it’s not what you think. There isn’t a special system or method they’re not going to tell you about (although they’re not likely to divulge all their secrets) what it is they’re not sure about is how much you’ll understand. Giving you something you don’t understand is not the major cause for concern. Giving you something you think you understand is. If they’re considerate and kind, they’ll give you what they think you can take. But beware pushing too hard – you’re in a privileged position and at any point the trader personality is potentially going to snap back and metaphorically kick your butt out if you get in the way of too much of his/her action.
My advice if you find yourself in this lucky position is simply to watch and to make a note of what you want to ask when the trader isn’t obviously busy. Try to focus on their approach, mindset, what they might be thinking and saying to themselves. Sometimes, it’s not what is explicated, but what is unconsciously intimated that makes the difference. By all means note what they are doing in the basic platform sense – how they trade – what markets, instruments, indicators (if any) etc. But don’t allow your primary focus to be taken of THEM. They’ll normally initiate conversation with you when they remind themselves of your presence. If they seem a million miles away – they are! A good method for discussing things with your mentor is to note them down during the time you have with them and then either rerun them later – out of trading hours or during a quiet spell – anytime they look ready to talk. Email can also be a good medium for kicking around stuff that would take too much time, effort or energy during trading time.
The traders mindset is very simple. You could try and emulate what you ‘see’ the trader doing and what they say, the way they say it – and that’s a good start. But the essence of what they are doing on the physical plane comes from a mental construct.
It’s an attitude of mind. The correct manner of physical and mental comportment – internally and externally. An understanding that you will be willingly and unconsciously pushing yourself to your physical and intellectual limits and taking on, from your current limited perspective, far more than you could possibly ever imagine. This isn’t just about trading – this applies equally to any endeavor in which you wish to excel. If I can give you just one small hint as to the core of developing the necessary attitude of mind it is this: Not Caring.
If you wonder why it’s so difficult to read my words, that’s OK. It’s meant to be. If I gave it in neat little, easily comprehensible parcels you’d think you understood – which you don’t. You can take this stuff head-on consciously. It has to slip in the back door, unconsciously. You’ll know the feeling – you’ll feel puzzled and confused. That’s what you’re looking for.
For those of you who find yourselves impatient at me prattling on about this ‘stuff’ and eager to get to indicators and systems and such like, I will get to them in due course. But not before you’ve lost patience.
I am reminded of a Zen story about a monk who wanted to become a chess master. He was very proud of his quick mind and his ability to follow his opponents move in a flash with his own. His chess teacher, a wise old monk of very advanced years (they’re always wise old monks of very advanced years) decided to teach him how to become the master he wanted to be – and could be. When he played the young monk, he would take a little more time with each successive move. Until it became almost unbearable for the young monk to play the old master. Hours and hours would stretch away from him in absolute quiet and blankness – quietness of spirit - as the old monk considered what to any novice chess player would have been the obvious and only single move open to him.
As to why it is "bad" for the gains today in the U.S., I for one, am none the wiser?
