Mastering One Trading Strategy at A Time

baby-walking Trading

Do you remember how babies learn to walk? If you don’t, why not go watch them again? Because trading the financial market is a little like learning how to walk.

While you may not remember how you started, a quick guess tells me you were probably like any other babies. You were curious to see other people walking around but you had no idea how to do it. You try to imitate them but you have not developed the muscles required to hold your body up right without having to balance yourself properly. You attempted to walk and you fell every now and then. You were probably annoyed but you were so focussed on moving forward that you did not even mind crawling.

The process of learning is such that you can’t run before you can walk, you can’t walk before you can crawl, and you can’t crawl forward until you know where you want to go. In short, learning to move forward requires you to take it one step at a time. I’m sure you understand what I mean, don’t you?

Learning to trade the market is not too dissimilar too.

Learning to Take Baby Steps

You see, babies are incredibly determined to succeed. Every time they take a step forward, they smile (or giggle) and they jump (once in awhile) before they fall. And they stand up again and they start moving forward one more time. Some of them may cry along the way but that does not stop them from trying again. Because they literally take one step at a time to move forward.

More importantly, babies do not comprehend the idea of failure. The concept of failure does not exist in their mental program because they only focus on what they want.

The truth is, every one of you reading this now was once a baby too. And until you grew up, and until someone thought you the idea of failure, you too were as determined and as focused as a baby. Also, because you used to do it, you can definitely do it again.

Let’s take those lessons and come back to now.

And since we’re on the same page now, I guess some of you are wondering how you too can become like a baby again? If you are one of them, I would suggest going back to basics (a.k.a. taking baby steps). In other words, focus at ONE THING AT A TIME. And start with the SIMPLE things.

For example, if you just started to learn price action, then just focus on price action. If you are learning exit strategies, then focus on exist strategies. If you just started to learn Support & Resistance, then focus on Support & Resistance. Do any of that until you MASTER it. And until you have mastered it, don’t learn or do any thing else.

Remember that you don’t have the necessary muscles to support you yet but that’s OK. Because that’s how you started to walk too when you were once a baby.

The 10,000 Hour Rule

Going back to the time you just started to trade. Do you remember the first few months of your journey? Do you remember not knowing what to do or where to start? You considered starting with either the demo account or a very small trading account. Some of you might have even gone straight with a fairly sizeable trading account.

After a few weeks (or months), you strayed away from the original plan and began to focus on something new, just because the original plan was not bearing fruits yet.

Were you one of them?

According to Malcolm Gladwell in his book “Outliers” (see more), it takes 10,000 hours of doing the same thing before you can master it. Which explains why trading is not a get rich-quick scheme. However, once you have clocked in the hours, you are certain to succeed. You can agree with me on this, can you not?

That also means, we now have a clearer understanding of the science of what it takes to become a successful trader. Right?

However, there is a caveat to the statement above.

The problem with many traders is that we end up jumping from one trading strategy to another. While some get frustrated easily, others end up quitting completely. In that case, the 10,000 hour rule has been breached.

Unknown to many, that’s because those traders probably spent 5,000 hours on strategy A, 7,000 hours in strategy B and 3,000 hours in strategy C. While it seems like they have spent a good 15,000 hours learning to trade, the reality is that they have been going in all every directions each time they learn a new strategy.

Do you think that is a good way to learn? Your answer better be no.

Instead, why not (and at least for this one time) go back to your trading plan and figure out which strategy you can resonate with the most? Which strategy are you most confident with and where you have been most rational (or least emotional) with. And once you’ve found it, go back to market and work your way to 10,000 hours?

This is also in line with the whole concept of taking baby steps in trading. As you can see, trading requires determination and focus.

Where is the Joker?

Here’s another concept that may help some of you.

Finding the right strategy is just like looking for the joker in a deck of poker cards. If you have a new set of poker cards, without removing the Joker and thoroughly shuffling the cards, would you know how long it’ll take to find the Joker? Probably not?

Some of you may have to go through 4 cards to find it while another might have to take 50 cards to find it. However, if you can’t find it at the 50th card, does that mean you should give up? Obviously not.

In all honesty, 10,000 hours can take some effort. However, in the bigger scheme of things, 10, 000 hours is not a lot. Imagine spending 4 hours each day on your charts and 4 hours reading a trading book, do this 5 days a week and 50 weeks a year. In 5 years time, you’ve reach 10,000 hours. More often then not, you’ll reach there in less than 5 years if you remain focused on what you’re doing.

And the reward is priceless. After all, how many careers are there out there which allows you to retire in 5 years time?

Do you think finding the joker is worth it now?

Conclusion

The idea here today is quite simple, do one thing at time and master one trading strategy at a time.

New traders often get excited about learning and that’s totally understandable. However, intermediate traders too fail to look at the bigger picture and to narrow down what they should do. Many traders change their trading plan very so often and that does not give the plan any space to bear its fruit.

I hope you’ve learnt something today. Thank you for reading and happy trading!

 

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