I often take a look back at what I write to see how I have changed. Below is an excerpt from the first manual I wrote in 2007. It is fun to be put back in that place and a responsibility. It is helpful to see how things have shaped up or changed in the market, myself and the relationship between the two.
I never shy from criticism, both externally and internally. I played college football, what most people do not realize is that every second of practice is filmed, most of the time from multiple cameras and angles. Every play of game film is examined 100’s of times by a 100 people. One of my coaches had something called an isolation camera. It was a close up camera that followed random players on different plays. Some embarrassing things happened on that tape but it served the purpose. The player in the iso-cam almost never made that same mistake and I assure you that it was in the back of the mind of everyone else. In football, the mistakes can cost you the game. In trading it can cost you money, put you in a hole before you have the skill set to get yourself out, or put you out of business. Like football, by analyzing, the “film” you can figure out what you can do differently if in that situation. The film, in trading is the notes you take and your statement.
When I was operating a trading room, I was trading under the watchful eye of my students. On a positive trade, there are very few questions, on a non-winning trade I am peppered with questions on why I did that or didn’t do something or why I did not get in on that trade that was profitable. This says two things about beginning traders. Remember I am always evaluating my decisions the good, the bad, the ugly. I equally evaluate the winners, the losers, the trades that I didn’t take that were winners, and the trades that I didn’t take that were losers. (Now, I spend less time evaluating the trades I did not take.) Like I said I have a reason for every reaction or decision, if I didn’t I would be second-guessing myself all day. Believe me, when you are expected to be an expert teacher and you make an unprofitable decision you better have a reason. Many people say, if it is not broke don’t fix it. I could not disagree with that advice any more. Nothing ever stays the same, life, the market, or people. I understand why people say to not fix things if they are not broke, because it is human nature to strive for contentment.
Evaluation does not mean you have to change anything but it makes you aware of situations that may arise. I have been a part of many athletic teams, many organizations and have had many personal relationships. There is one noticeable difference between the teams, organizations, or my personal relationships that had moments of success and the ones that were successful. It was the ability to identify and address the weaknesses no matter how well things were going. It is not necessary to throw out your plan if you have a losing day. If you know what was useful, by note taking, you can more accurately adjust the plan. It may be that your system or rules did not work, that day. By note taking you will find out quicker and you will be aware of how you reacted in those situations and increase your odds of making the proper adjustments or even not trade. I never shy away from internal or external criticism because I do not let it affect me negatively. I am thankful for it. Many companies spend millions of dollars for feedback from their money providers (customers), the market is a trader’s money provider, and it gives instant feedback, use the information wisely.
I can sum up these paragraphs in one sentence. Remain critical, learn equally, and never get complacent. I have come a long way since writing this and it is evident in how my thinking has evolved. I have more experience and context in which the stories are more real. My process is more efficient, all around better.
How have you changed over the past 4 years?
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