BarroMetrics Views: Whatever It Takes (2)
A phrase in ‘Name of Honour‘ (Richard North Patterson) caught my eye. The hero, Captain Paul Terry ( a member of JAG) is asked by the heroine, Meg McCarran: “Why do you think you are so successful”?
He replies: “Simple, I hate losing….Since the age of thirteen, no one has given me anything. I got here by sheer hard work, that’s the only asset I had..”
Change ‘losing’ to ‘not achieving my outcome’ and you have my story. I’d go so far as to say, you’d have the story of every successful trader.
Effort not talent is what you need to succeed is the message of Neurology. But that effort must be of a specific kind. I have outlined the model in a number of posts e.g. “A Better Way to Learn. But I realized in outlining the model, I failed to stress the importance of feedback.
We learn because we take action that does not produce the results we want; we take note of the gap and take new action that leads to other results and continue the process until we have our outcome. In this loop, the feedback process is an integral step to success.
I guess this is why an instructor/mentor is featured by Ericsson and the others. Can you provide the feedback yourself; sure with much trial and error. A good instructor will expedite the learning process by guiding the student to find the right answer. This guidance saves time, energy and money.
If you are learning on your own, a useful feedback model would be to first use a trading simulator to learn the trading method. Break down the system into specific modules. At each lesson set an outcome, evidence for that outcome and a debrief process. Once you are familiar with the system, trade a micro account (in CFDs $1.00 per point e.g. in the S&P 1091 to 1090 is US$1.00) so that losses don’t matter.
After each stage, debrief. Whether you make or lose money, question every decision you made from entry to exit.
- Why did I enter?
- Why did I stay in?
- Why did I exit?
- Did I stick to the trading rules?
- Did I feel I wanted to do ‘x’ and my rules wanted to do ‘y’? Which one proved correct in this trade? etc
Record the answers. The goal is to learn to trade under pressure when the results don’t count. So, when you have your normal size on the line, you will react in a consistent way. And it is this consistency of action that leads to confidence and trading success.
Refer this blog post to a friend or colleague…
