Should You Stop Learning And Just Trade?

Do you ever “arrive” as a successful trader?  Is there ever a time where you just know it all and can rest on your laurels and trade?

I don’t think so.

Just as a professional athlete constantly goes over the basics and tweaks technique, I think traders should as well.  Trading is dynamic and can be called a performance sport that requires you to keep yourself fresh and ready for action.

Some of the brightest and most successful people in the world would agree that anything you’re trying to achieve will be a perpetual learning process. Don’t discount this philosophy in your life either.

We all have personal traits that we can continually work on to become a better person.
The danger is that once you start to see a degree of success in trading (or anything in life), you stop making the effort to learn any more as it’s easy to feel that either you’ve already got things figured out or simply that the extra effort is unnecessary.

But it’s precisely when you feel this way that you need to be learning more.


Don’t Wait Until It’s Too Late

It’s all too familiar a story that a trader can see a good run of results only to follow that up with a losing streak that more than wipes out those initial gains. Recognizing the fact that there’s always the chance of your strategy stopping working or even that your trading execution performance could take a nose-dive, should be motivational enough to drive you to keep learning.

However, most people are reactive to a drop in performance instead of proactive.

In trading, we never know what the next trade will be or how the trading setup will unfold.  We are reactive within the confines of a trading plan but in terms of keeping our success in check, we need to be proactive with the understanding that what once worked, may stop.


Change With The Times

What’s old is not always what’s new again.  Over time, things change or at least are fine tuned.

Taking a look at the sport of fast pitch softball.  For years, the fastball was taught with:

  • Seeing the back of your hand with ball overhead
  • When ball is behind you, face it towards second base
  • Release with a quick bend in your elbow

There’s that old sports coach who might have had some minor success at college level ball some time way back in history.  That’s what they teach.

Slow motion video has shown that the elite softball players don’t do that at all.  The ball is either facing upwards or more towards short stop.  The arm is brought down to the side and the forearm fires through the hips.

The old coach persists with the same tired old methods whether they have any merit or not because that is what brought them success in the past. What they fail to see to acknowledge is there can always be improvement.

Keeping up with the times might seem like a lot of extra effort and a big risk when you already have a successful way of working, but not doing so will ensure you get left behind.

Far too many young pitches are taught this dated form of pitching and it is hobbling their chances of even greater success.

Traders who choose not to evolve, not to grow, can see their once successful way of trading turn their equity curve into a lesson in stubbornness.


All There is to Know

I don’t think I know any trader who claims to know everything about all aspects of the markets and trading. There are plenty of folks who know very little about certain topics purely because they denounce them as useless.

Now of course there are plenty of questionable ideas out there, but to dismiss ideas out of hand is not a particularly wise approach either.

Keeping an open mind is the hallmark of someone who still seeks that little edge to keep them on the success path.


Changing Market Conditions

If you find success in one type of market condition, when conditions change it’s more than likely that at least initially you’ll struggle unless you have ways of adapting to the changes. It’s such a common issue that traders lose a lot of money by being slow to adapt when conditions dramatically change.

Take for example when the stock market corrects lower. A steady push up for many months can be arrested by a sudden sharp sell-off which can be very costly if you’re not wise to this. To compound the issue, many traders then see the added volatility as a precursor to a bigger sell-off.

If it was just a minor correction however, these traders also get caught selling on the surge back up.
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Take a look at current day.  The markets keep making all time highs and this will change.  Traders who get stuck in the mindset of bull markets and can’t adapt to the opposite, are going to find themselves in a heap of trouble when the inevitable comes.


Never Stop Learning in Trading

Of course there’s a balance to be struck. Abandoning one trading strategy for another before you master it simply papers over the cracks of poor trader performance.

Changing from trading based on a theory that’s currently making money to the latest and greatest method carries risk too. But simply standing still in the belief that you know all you need to in order to maintain a profitable trading career is simply not wise.

So make sure that you are humble and recognize the need for incremental learning. Be a perpetual student of the markets and yourself – never stop learning in trading.