- October 25, 2018
- Posted by: NetPicks
- Categories: Basic Trading Strategies, Trading Article
What can we learn from a baby when it comes to trading?
Sounds stupid but a baby, brand new to this world, has no concept of fear.
They’re not concerned by:
- The possibility of losing out
- Looking foolish
- Competition with their peers.
They see adults and older children doing things they are unable to do.
They can’t walk over to a toy when they feel like it.
They can’t explicitly communicate exactly what they want.
So what do they do?
A Baby’s Advice To A Trader
A baby will attempt to do these things on their own and little by little, they improve. Mistakes become smaller and less frequent and they eventually master the skill.
The baby being a baby, mistakes are inevitably going to happen along the way. But with no preconceptions, no fear and the drive to succeed, the baby does succeed and learns from each and every mistake.
In a paradoxical old dog kind of way, as we learn more we tend to lose this capacity to master intrinsically new skills because of the experiences we’ve already had.
Like learning to walk or talk properly, learning to trade properly entails making many errors along the way.
It’s important to be able to identify what these errors are (this is why record/journal keeping is so important), but once you see where you’re going wrong, you adapt and adjust until eventually, you’re very good and able to replicate trading results consistently.
Own Your Trading Errors
The problem is that rather than concentrate on what the errors are and process improvement, new traders and for that matter more experienced but yet to be successful traders, deny the existence of errors completely
They do not fully explore the errors and their root causes, or attempt to avoid situations entirely where errors might possibly occur.
The danger is that they might just uncover something which is really painful to deal with. They might find that there’s something they really aren’t doing very well at all. Their ego might be battered and their pride bruised.
FYI: lack of effort is an avoidance mechanism.
Next comes the driving factor in becoming competent or even highly skilled.
- Why does a baby try to walk and talk?
- What is their motivation?
Maybe they get positive encouragement from their parents, but I consider the reason to run deeper than that.
I believe that there’s a realization of the freedom these skills provide. The ability to be able to choose what you want to eat, when you go to the bathroom, or to play with that favorite toy and when you want to do it, is a strong driver to succeed.
The baby sees others doing these things and therefore is able to figure out that they can probably do them too.
When the motives of a trader are all about greed or pride, what ends up the common denominator?
It’s back to fear.
Does fear inhibit ability to learn and progress?
You bet it does.
Let’s Accept Our Struggles – Find Solutions
What would be my advice to new trader or even an experienced trader struggling to accept that they’re not trading very well?
- Figure out the real reason you want to be successful as a trader. Try to to ego out of the equation. Maybe to make an independent living or even because you are passionate about it and what you have learned so far.
- Be humble or prepare to be humbled. There’s no little league in trading and the objective of your competitors (which is basically everyone else) is to part you from your trading account balance.
- Push your comfort zone a little bit every single day. Realize that you will probably feel vulnerable and make a mental note of that. You could for example, set a target and try to achieve it. I’m not talking about a profit target. I’m talking about a trading action-type target. Think of things like taking your stop every single time or making sure you fill out your trade journal come hell or high water.
- Keep records of your progress and make sure you review them regularly. Seeing positive (or negative) changes is never as stark from day to day. Big improvements should happen steadily and over time. Use your errors as a source of strength and improvement. Embrace them as perhaps the most beneficial way to learn.
- Be part of a more experienced community of some kind. If you see that your trading objective is attainable, you’re much more likely to dig deep when the going gets tough.
- Take the emotions out of learning by looking at someone else. If you analyze someone (preferably someone you don’t know at all) who is trying to learn a skill, very quickly you’re able to see the ways in which their approach is beneficial to progress and the self-inflicted obstacles they face. Then compare this to yourself.
Over time, even if you fail to begin with, persistent effort will ultimately yield improvements. Be like a baby. Have no ego and no fear -just a goal and the resolve to reach it.