Why Trading More Produces Less
Greetings traders, this is Dr. Kenneth Reid from HawkeyeMindset.com.
We all want to improve our trading. What’s the best way to accomplish that?
It’s not a question of working harder. There are no lazy traders. In fact, we have the opposite problem: screen time seems to increase way beyond what we originally expected. (Just ask your wife/partner.)
Unfortunately, screen time isn’t directly correlated with an improvement in our bottom-lines. Why not?
Like any profession, trading well depends on a proper mindset and the execution of specific skills… skills that need to be practiced.
Raw screen time doesn’t necessarily build these skills… or any skills, for that matter. In fact, excessive screen time can tire you out, zone you out… and keep you from developing the real-time skills you need.
It’s a paradox: trading too much is the most common trader problem that’s not even recognized as a problem. Check out this comment from the owner of a popular futures prop shop:
“Our average profitable trader is active less than 3 hours a day. Our average struggling trader logs more than 6 hours a day.”
And I know traders who are in front of their screens 12 hours a day or more!
Sure… it’s natural to try harder when you are not getting the results you expect. And it’s natural to expect your results to be proportional to your effort. And in some fields of endeavor these expectations are correct.
But trading isn’t one of them. Here’s why.
The typical struggling trader operates with an idiosyncratic mix of biases, goals, predictions, snap judgements, impulses and intuitions combined with an equally eclectic set of technical tools.
Although you may swear loyalty to a particular method, such as Hawkeye, when push comes to shove in live trading, many traders quietly change the game.
In this ad hoc situation, the number of unique discretionary combinations available to enter, manage and exit any one trade… probably runs into the thousands.
When the pressure is on, consistency becomes elusive. So elusive that our results can be much worse than chance. Seriously. It will seem like you are missing virtually all the good trades and taking virtually all the bad trades!
I know it sounds impossible, but I hear about this often and I’ve experienced it myself. It causes traders to profoundly mistrust themselves and feel almost cursed.
The good news is that the solution is within everyone’s reach.
Good trading relies on a small group of attitudes and abilities that are the opposite of the idiosyncratic mix we have, by default, in our heads.
Good trading is:
- process oriented,
- disciplined, and sometimes
This is the mindset needed to trade successfully. We call it the Hawkeye Mindset. (This is how Randy trades, right?) Without it, you are subject to your own random discretionary ideas, impulses and behavior.
Mindset is crucial, but it’s not enough. We also have to master the specific skills regarding entering, managing and exiting trades. Mindset needs to be practiced… and so do the skills.
But frankly, most traders never actually practice… they just analyze and trade.
Either they feel they don’t have time to practice, they don’t think practice is important, or they think trading itself is practice. But it’s not.
Truly effective practice has three essential ingredients:
- It’s specific,
- it’s measurable, and
- it’s progressive… which means the challenge increases incrementally over time.
I call this “Conscious Practice.” Conscious practice creates hundreds of small breakthroughs, which generate measurable macro improvement. (And they generate dopamine, too…so you will enjoy practicing.)
This isn’t just a theory… this is the training method that resulted in 90 new records at the 2016 Rio Olympics.
And if you start applying it, you can break through your own limits and set new performance records on a regular basis.
So here’s a quick quiz:
Conscious Practice is ____________, ______________, and ____________ .
Ready to start?
Step 1: Pick a specific attitude or skill you want to get better at. Get very specific.
Step 2: Set measurable goals and track your progress using market replay or practice in a live market in Simulation mode.
Step 3: As you make progress, progressively raise your criteria for success.
Key Point: This recommendation may shock you…
if you are not yet profitable… spend 90% of your time practicing conscious skill development in Simulation Mode… and 10% trading live. As you notice your mindset and skills improving, gradually increase the proportion of live trading.
If you are ready to start your own program of conscious practice, download the free video below, which is part of the low-cost Hawkeye Mastermind coaching program available on HawkeyeMindset.com