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Three Ways You Can Become a Better Trader

The allure of trading will attract many to take a shot at becoming a professional in the craft but only those who truly love the process will ever succeed in the markets.

In its simplest form, trading is a profession and like any other attempt to become a highly-skilled professional it will take time, discipline, and deliberate effort to accomplish profitability.

Hard Work

Malcolm Gladwell popularized the notion that it takes an individual roughly 10,000 hours of deliberate practice in order to become a master at a certain craft.

Similarly, seasoned traders openly share the immense amount of screen time that is required to be put in over the years to become profitable.

Simply put, trading takes hard work done consistently over many years. You must bring a blue collar mindset to your trading business by showing up each day for every trade, doing research, and putting forth your best effort routinely.

Accumulating a lot of hours of screen time is a natural part of your trader development.

You need this “time under tension” to develop your perceptual filter for analyzing market information into your trading strategy.

Over time you will begin to develop a large enough sample size of observations in your trading data to identify patterns that you or your system are making and adjust your process accordingly.

But until you have put in enough time to understand your strategy you must stay the course to learn its strengths and weaknesses.


A Disciplined Approach

Confucius once said “The man who chases two rabbits catches none.”

The same can be said for a developing trader who does not put in the time necessary to build a level of competency for one strategy before drifting to another style or market.

As Mark Minervini says, “Don’t try to become a jack of all trades, become a specialist and master a specific approach.”

In order to grow into a profitable trader you will need to focus on your specialty and learn your edge. Know its strengths and weaknesses. That is, when you should lower your exposure levels and when you should step on the gas.

If you neglect focusing on one particular style for the required amount of time it will be difficult to understand its nuances in all market regimes.


Learn from the Best

Dr. Richard Bandler, the co-creator of Neuro Linguistic Programming observed, “When you want new results, it requires new thinking.”

In other words, if you want to become a consistently profitable trader you need to start acting like one.

Study the work of profitable traders by looking at return data. Read all the interviews you can find. Listen to all the podcasts to find nuggets of wisdom.

One of the formidable moments in my trader development process was coming across the Market Wizards series in 2011. Reading how the best traders managed risk, assessed probabilities, and traded an idea or system was invaluable to my development.

After reading this series I was able to transform my trading from a discretionary process with modest success to a robust process that produces positive expectation in multiple markets over a full market cycle.

The more you expose yourself to the greatest trading minds the more you will hear them mentoring you as you trade, making you that much better.

However, while some trading principles are timeless markets do change.

Consequently, you need to keep a malleable mindset that is capable of filtering new information as it develops in the markets.

Start by looking at the facts at hand. Avoid confirmation bias in reaffirming your views for how something should work and adapt to what is working.

If you know yourself and know how the best traders think you will have a tremendous edge in your trading.


Closing Thoughts

Trading is a great endeavor and a life-long challenge. Embarking on the process to become consistently profitable will open your eyes to knowing yourself, the markets, and its participants in exciting ways.


By coming to your trading desk each day with a professional mindset, being disciplined in your methods, and emulating the best you will increase your odds of success and accelerate your learning curve. 

As always, please feel free to contact me with any comments or questions. Thanks for reading. 

John 

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