Physician, heal thyself! These are infamous words that you must adopt in order to create winning habits that turns an edge into a consistent edge and a consistent edge into a replicable pattern of demonstrable success. Habits?
The human brain works on the basis of habitual pattern hence, pattern recognition is a highly important skill to hone. Habits are addictive. Various psychological, emotional and mental (pre) dispositions bolster and hinder progressing and regressing respectively. There isn’t a way of escaping habits, a robust system will recognize and map good habits and separate them from bad habits. An un-robust system will refrain from brutally honesty and will deliberately ignore or obfuscate the simple task of ensuring that is an accurate account of the bad habits, choosing instead to focus on ‘the positives’ rather than accurately assessing the relative strength/weakness of every strategy.
An example: An event trader stays up, trading from 2am on Monday until 2am on Tuesday, without any sleep nor food, treating the markets like putting up breaks. Yet, at the end of the trading day, the trader makes no profit.
- The same trader ignores that Tuesday is the most busy trading day of the week, full of news items that move and cause events of breakouts and mean aversions in the markets.
- However, as a result of the event trader not having adequate sleep the previous day, the trader falls asleep, missing many opportunities of increasing alpha or worse: trading with an eye open and a weary brain that lacks focus and as a result, turning the strength of their strategies into financial and actual weakness. Trader know thyself! The choices we face as humans.
Invest in and engineer success with a demonstrable and repeatable series of success that can be charted on an arithmetic plane or a geometric plane of success.
An arithmetic pattern may follow this sequence: 0-2-4-6-8….
A geometric pattern of success may follow this sequence: 0-3-9-27-729…etc
That’s the success story.
Divest in strategies that engineer regression and ultimately, embittered failure. It’s obvious stating that a pattern that doesn’t engineer success will not gain over time but rather, lose over time. Put simply, a simple measure of a trader’s growth can be simplified by asking the question: “Do these person’s measures of success quantitatively gain or loses revenue/assets over time?
Where a trader’s trading system (numbers) does not gain over time but contrarily demonstrates that it is losing value and revenues over time, then there has to be a re-engineering of the trader’s prism of collecting, refining and applying the information (numbers and words) that they use when making trading decisions.
Physician, heal thyself.
Think. Adapt. Review. Act…Repeat. …..
trader know thyself!