In Trading Routine and Psychology

Revival.  It's a word that can strike us, inspire us, motivate us to press forward and initiate change in order to improve the well-being of ourselves or those around us.  This blog has been active for several years now, and while it presses to teach and inform fact, its primary goal is to improve the well being of its readers in regards of trading. And while we all have opinions, come from varying backgrounds and interpret information in our own ways, certain basics cannot be ignored, as it is the most simple concepts that can help us out tremendously when it comes to gaining an edge in this already highly competitive market.

Certain things inspire us, and while I have been, yet again, taking a bit of a hiatus due to work recently, I have had my ear close to the news and indeed been inspired myself due to the major struggles and change taking place across this globe.  People are speaking up.  Individual efforts are being blatantly recognized in rare form.  It has me looking in a mirror and bringing my own efforts back into light, stepping back and rethinking some of the things that I do day in and day out – and we're not just talking about work.


A Lesson from an Economist and a Journalist

I recently watched the movie “Freakonomics”, and while I can't say it did the book as much justice as I believe it deserved, the most profound thing I heard throughout the whole movie came within the first few minutes of the film.  The original authors were discussing parenting and how newcomers strive to be the best they can be at their future role.  They said that the first thing many of them do is hit the bookstores, pick up an armful of materials and read through them furiously.  They look for advice from other successful parents and essentially want to mimic their actions.

But they will never likely mimic the actions of these other parents.  While the books cover a wide range of topics and flood the readers with success stories, the actual application of the material contained within them does little in terms of actually making them better parents.

It is the fact that they are the type of people that go out and actually put the effort forward in attempting to be the best they can be that actually turns them into a skillful parent.

Me, being the addict to this business that I am, couldn't help but relate this to trading.  Let's take this concept and put it into something that relates more specifically to us:

You are highly unlikely to mimic the actions of another successful trader, but the sheer fact that you are the type of person to go out and try to learn as much as possible in regards to this skill is what will actually turn you into one.

Yes, there are facts that you are required to know about parenting, this business or any other.  But we have sources for that.  Whether you read Market Wizards, Trend Following, The Alchemy of Finance, or any other book that tracks the successful paths of others, you are simply unlikely to follow in the footsteps of these men or women.  [callout_right]You are highly unlikely to mimic the actions of another successful trader, but the sheer fact that you are the type of person to go out and try to learn as much as possible in regards to this skill is what will actually turn you into one.[/callout_right]But if you head out, make a concerted effort to gain the required knowledge, digest information and occasionally reanalyze what it is you do on a daily basis then you are likely to end up with a desired outcome.

If I try to mimic the efforts of someone else I am likely to end up broke.  Likewise if someone tries to do the same thing with me they are likely to end up just the same.  You CANNOT rely on others for explanations as to what to do next and carbon copy their routines.  It simply won't work.  Molding your own method is the only thing that will likely drive you forward.


Revive Yourself – Be Bold and Rip Things Apart

It is important that we take a step back every now and again and reanalyze what it is we are doing, and look at those basics.

When you get started on the wrong path, it is hard to just jump back and switch gears on something that is so fundamental and basic that is essentially embedded into your routine.  But sometimes, you must.

People do it all the time: they have a problem or concern and tackle the wrong areas in order to resolve it.  They come in at an angle that is going to serve no purpose or simply cause more harm.  Instead of knocking down the front door they are climbing through a window.  You need to be bold and rip things apart.

The basics of this business come down to a few simple tenets:

1.  Transaction costs and execution

2.  Fundamental knowledge regarding traditional investment techniques and market “fact”

3.  Proper market analysis

4.  Measuring risk

5.  Adopting a compatible trading philosophy

Some of you might be looking at this list and realizing, right off the bat, that something needs work. In future posts we will delve deeper into these ideas but for now it is important to realize, fundamentally, what, if anything, might be wrong.   Our job will be to simply help guide this process and help you focus on some of the things that might matter most to you as an individual.


All Up To You

Writers such as myself realize the lack of efforts many people tend to exhibit, simply because it is in our face much more than others.  Emails have come in over the years from readers looking for someone just to tell them what to do, the epitome of a lack of individual efforts.  But one thing I know about the readership behind this particular site is that many are just plain, hard workers.  The nature of the content here directs it, as we don't typically offer the type of instruction that would dictate otherwise.  That being said, if you realize that something is wrong in your routine, it is all up to you to fix it; exhibit effort in order to find resolve to something you enjoy doing very much.

People get stuck in a hole and rarely branch out to look for or try new things.  This tends to bottle them up in a never-ending cycle which either ends up in defeat or pure mediocrity.  Getting inspired and shaking things up is perhaps one of the quickest ways to battle this and motivate yourself in propelling forward.

I'm encouraging all of you to get up off of your tails and start to move around.  Branch out and discover things that you haven't before.  If you don't understand something, it's time you do.  Look at the long term effects of your efforts and see that you really are doing this for a greater purpose and that there is a new way to tackle your routine.

Whether you have been trading for 1 year or 10, everyone needs a kick in the pants every now and again.  Step one is the kick.  If you have any ideas or stories, please feel free to post them below.  We never get tired of them!

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Showing 3 comments
  • David

    No story but I do have an inspiring quote: “The best preparation for tomorrow is doing your best today.”

  • Bobc

    Your article makes an interesting comment”If I copy your trading action I will go broke”
    Why? Because I am not copying you exactly. I have made some little adjustment.
    Alternatively,you have failed to tell me about that special little trick which turns failure into success.
    It reminds me when I decided to teach my wife how to trade.After much crying and nashing of teeth, she knew one method- the Joe Ross 1,2,3 breakout.But she watched the same shares as me and took the same positions I took.
    “Whats the use of you taking the same position as me? If I am wrong we both loose.You need to learn to trade your own ideas. If I fall down dead you will have a skill to make a living”
    She replied”If you fall down dead, there is enough insurance, savings and investment for me to never have to worry about this stupid trading!”
    Next time I am coming back as a women

  • Robert

    I am looking forward to enrolling into the Pro Traders Club this week. I am still paper trading FOREX while swing trading stocks. I just started a FOREX Trading room last week with a mentor who teaches technical only MFAM. I feel more comfortable knowing the fundamental background of the market I am trading with the technicals. Thank goodness I am always checking out sites and blogs and discovered your site (shared it with friends at work too). All of 50-100 Chris Lori’s reviews via google are excellent. BUTT KICK ME AWAY I am ready.

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