Misplaced focus.

One of my best friends from high school thought he was Deion Sanders.  After playing football together for many years our list of pre-game superstitious and rituals were lengthy.  It was a production. Finally a coach stepped in and the madness came to an end.  Habits can form for little or no reason but end for a very specific reason.  In this case it puts focus in the wrong place.  I am not sure if it hurt performance but I am certain it was on the verge of not helping.  The purpose is winning in a repeatable way.

The key to competition is a fast start.

As an adult I have found that I gain an advantage over my opponents by out focusing them.  Focus is so important because it allows you to make progress, efficiently.  Progress happens in steps, but rewards do not necessarily correlate.  That is why a fast start is so important.  Do it efficiently because we are limited by time and energy. Passion, life, and motivation all fall in the category of “if you do not use it, you lose it”.  Getting out to a fast start will help with all of that.  Focusing allows it to happen.

How do you pound the rock?

The best analogies is pounding a rock.  When you are hitting a rock with a pick ax you never know what the next hit will do to the rock.  It could do nothing or it could split it in half.  Even know you are not seeing the last hit doing the damage it could be.  You just never know.  You are making progress without seeing results.  But the key is focus, hitting the rock in the same place.  By hitting it in the same place you will understand if it is the right place to hit or if you need to move around.  Hitting it all over will tell you nothing.  Be focused.

Hitting with focus.

With new traders there is no doubt in my mind that they are focused 100% on analysis.  Technical, fundamental, or relationship.  I understand, I was there.  Charts are money. Charts are interesting.  Charts are easy.  Analysis is the key to success, in their mind.  Hopefully, this intense focus will allow them to see where not to look anymore.

In reality, charts are opportunity.  Charts are just pictures.  Charts are a distraction from building a foundation.  Until you see a chart in the context of who you are while in a trade it does not matter.  It is like seeing them for the first time.  It is the difference between seeing a picture at night or during the day.   What that picture means to you is different.  What is the difference between an analyst and a trader? A trader understands that without execution their analysis is wasted.  Theory verses practice. That is not a dig on analysts but there is a difference and what you focus on will have different result.

Where to focus when new and struggling. Process, process, process.

Charts are important but they are not important till you have a process and some foundation. Some traders work like an assembly line, some are custom made, some are a hybrid.  The benefit of discretionary trading is it allows to be the hybrid.  This is where the longevity in trading comes from.  It allows you to see the change and adjust to it.  If you do not make part of it an assembly line you will never get to be a hybrid.  If you are all custom made you will never be a hybrid.  You will never have maximum control of your results.

Why the misplace focus.

It starts from a bad premise.  That charts are the most important.  If you do not have friends in the business no one will ever tell you anything different.  Charts become false from time to time and when that happens what do you do, how do you know if they have a potential to be false? If you look at two traders, trading the same way with different results you will see difference is their process. Charts are the easiest way to market to new traders.  It feels real.  Win/loss percentages are another great marketing tool.  So is the mental aspect of trading.  Do not get me wrong all of those are important but it is a very long short cut.

Conclusion

It turned out my best friend was not the next Deion Sanders. I have wasted a decent part of my life, energy, talent on misplaced focus.  The irony is until you begin to focus or run out of time, energy, etc or someone beats it over your head it is hard to see what to do next.  Do I think a solid process with make you a successful trader?  Not necessarily but it allows you find out if you can be.

Note I write a lot about the mental aspects of trading.  I am not digging on that part of trading but if you are constantly relying on it you will eventually fail.  It is too hard.  It is cure not the prevention. Like any trader I make mistakes and I do need the cure.  Writing allows me to record it, see it in a different way. and see how others react to it.  I do not want to ever come off as psychologist, I am not.  But I do believe in building habits and I hope that I do good enough with mapping out why they are important. I believe a good processes will prevent a lot of issues.  Start from a basic point and stay there as long as possible.  After some recent feedback I want to set the record straight.  If you have any questions, as always, you know how to reach me. 

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  • Gianluca Riscaio

    What do you exactly mean whit “process”? Any examples.
    Thanks 

    • Gianluca Riscaio

      I found my answer on a precedent post: http://traderhabits.com/difference-between-process-strategy/
      I like your job!

  • Markus

    Very true. If you are an artist e.g. a painter you do not think about for how much you can sell it while in the process of painting (at least if you are not Jeff Koons or Takashi Murakami;-). Most artist are only or at least primarily occupied with their art. And that is the only way to create it. I think the inherent focus on P&L while trading is a curse. And this attachement to the monetary outcome leads to a circulus vitiosus. 

3 Responses to Misplaced focus.

  1. Gianluca Riscaio says:

    What do you exactly mean whit “process”? Any examples.
    Thanks 

    • Gianluca Riscaio says:

      I found my answer on a precedent post: http://traderhabits.com/difference-between-process-strategy/
      I like your job!

  2. Markus says:

    Very true. If you are an artist e.g. a painter you do not think about for how much you can sell it while in the process of painting (at least if you are not Jeff Koons or Takashi Murakami;-). Most artist are only or at least primarily occupied with their art. And that is the only way to create it. I think the inherent focus on P&L while trading is a curse. And this attachement to the monetary outcome leads to a circulus vitiosus. 

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