We have always been an impatient species. And in this still relatively new smartphone-driven world, unless we’re in line for brunch, we don’t like waiting for anything. You can dig into all kinds of psychology to determine why humans, by and large, suck at stock trading (and I will in future articles), but our lack of patience sits near, if not at the top of the list.
If you want an answer or need more information about anything, it’s at your fingertips. No waiting. No research beyond a simple Google search. Access to information is instant. Type a few words, tap the screen and you’re, more often than not, satisfied. While this has been a generally good advance for society, it has downsides.
To a great extent, we don’t respect the process. We don’t value work on the way to a payoff. This doesn’t mean we don’t work hard, or even smart. We can work hard and smart, but still lack appreciation for and find true satisfaction in what it takes to get somewhere. That’s my definition of not respecting the process. It’s not only that we don’t respect the process. Many of us don’t expect to engage in a process in the first place. We’re conditioned to not respect the process because so much of what we do in life requires so little time and procedural effort.
When I was a kid, my uncle and I were big fans of The Police. While we owned their music on vinyl — and spent hours listening to it — we would often drive around waiting to hear The Police songs on the radio. A Buffalo rock station, 103.3 WPHD, played “supersets” on the weekend. That’s three songs in a row from the same band. Even though we could have heard anything by The Police in my uncle’s basement, we relished driving around and waiting for the DJ to do it for us. When The Police came on the radio, we felt a sense of accomplishment. We put in the hours and when we finally heard what we waited so long for, we felt as if we deserved it.
In something so seemingly insignificant, there was not only a respect for the process, but a desire and feeling of necessity to go through it.
It’s not enough to simply work hard and/or smart to become effective at trading stocks. Consistent stock traders have put in the time and embarked on a process of learning, growth and, most of all, experience to get to a point where they can actually trade stocks for a living. They have done something akin to getting a PhD. They’re not only people who can actually trade stocks to make a living, they’re experts in stock trading.
They traced a meaningful and, at times, grueling path from point A to point B, realizing that they couldn’t simply go from the notion of trading stocks as a career to actually doing it successfully in one fell swoop. Instead, they embarked on a process, setting milestones along the way:
- I want to trade stocks.
- Who are the great stock traders?
- What is about these people that makes them great?
- I need a stock trading plan.
- I need to be in the right financial shape to trade stocks for a living.
- I need to be in the right mental shape to trade stocks for a living.
- How do I find a trading plan and get into the right financial and mental shape to trade stocks for a living?
- I need to tirelessly research these things and become incredibly knowledgeable — if not an expert — in all of these and related components of stock trading.
- I need to put what I have learned into practice through practicing, repeatedly, by testing routines and using a mock account (think of it as the dissertation and dissertation defense).
- I need to make sure I’m ready to go live (become a professor or world class researcher).
- And so on…
That’s just a rough sketch of what the process of becoming a successful and/or career stock trader might look like. And, like securing a PhD or some other equivalent lofty goal, it takes time — probably years — to accomplish. On the surface, all of this sounds like it sucks. But it really doesn’t… if you respect the process.
As you’re going through the process, you’re studying it. And you’re ramping up your activity as a stock trader. So, you’re trading stocks along the way, but at a level commensurate with your knowledge and attendant ability. If you set milestones and follow signposts over the course of this trajectory, I’ll bet you’re more likely to be able to reach the goal of not only trading stocks, but doing it well enough to make money and call it your career. You just have to look at it as an endeavor, not an overnight sensation. You’re using a typewriter and scrutinizing every word, rather than blasting out a rough draft, running it through the spell check and calling it a day.
Rocco Pendola is a freelance writer and editor in Los Angeles. Pendola contributed and worked full-time at TheStreet and Seeking Alpha, prior to taking a break from financial media to follow his passion as a craft cocktail bartender.