9 Steps to Trading Mastery

In my previous post I recounted my experience and some of the trading struggles I faced when I began trading. 

My breakthrough came when I finally owned the journey of becoming a masterful trader.  Becoming a successful trader isn’t a destination – it’s a process. stagesoflearning

It’s a process of moving from unconscious incompetence to ultimately unconscious competence.

In your pursuit towards trading mastery let the following 9 steps guide your actions and intentions.  

These steps are adapted from the book – Handbook of Coaching – A Developmental Approach.

1. Know yourself.

“It’s not the mountain we conquer but ourselves.”  – Sir Edmund Hillary

Leaders and thinkers through the ages have imparted this sound maxim that we must always start at home with self-knowledge before we seek to know and understand the external the world. 

“For most retail traders, trading is a solitary effort and the greater levels of self awareness you have developed. Successful trading begins and ends with self awareness.” – Robert Koppel (The Intuitive Trader)

 

2. Develop yourself.

“Learning any new skill involves relatively brief spurts of progress, each of which is followed by a slight decline to a plateau somewhat higher in most cases than that which preceded it…the upward spurts vary; the plateaus have their own dips and rises along the way…To take the master’s journey, you have to practice diligently, striving to hone your skills, to attain new levels of competence. But while doing so–and this is the inexorable–fact of the journey–you also have to be willing to spend most of your time on a plateau, to keep practicing even when you seem to be getting nowhere.”   – George Leonard (Mastery)

As a trader, sometimes it feels as though all the efforts you are investing into trading are not paying off.  This is in fact normal. 

Embrace the suck and realize that the most pivotal moments of your development will be spent on a plateau. 

Think of the plateau as a pullback in a stock that has just had a large run up.  In this light, recognize that the plateau is just a healthy consolidation before the next leg up. 

The key however is to not overextend yourself during this phase by trying to make something happen.  This is where I see a lot of traders do harm to their development. 

If you notice you have plateaued, keep active, stay focused, and engaged but don’t make earning a lot of money your focus.  The key at this stage is to not to lose money which will undo all the positive emotional and psychological progress which will cause you to start to look for changes in all the wrong places.

 

3. Take care of yourself.

The work of trading inevitably leads us into difficult terrain—sometimes painful, other times deeply challenging—and it’s likely you’ll leave some trading sessions feeling discouraged, lost, and at times inadequate.

This is unavoidable, and it requires a thoughtful plan for regular self-care. Self-care will include different practices for each of us.

Perhaps it is the ability to reach out and sit in conversation with a fellow trader, or the ability to say no when it matters most, or the routine of setting aside time for leisure, exercise, or cordoning off space in life without technology by our side.

Learning to take care of self is a perpetual challenge for many of us. Set routine goals in areas of self-care that are most important and engage in your own self-coaching to stay the course.

4. Engage in reflection.

Reflection is foundational to learning: learning about self (feelings, biases, reactions), learning about others, and learning about the world around us.

Experiment with a reflective practice that works for you, and engage in this practice on a regular basis. Maybe it’s time alone in nature, a long walk in a restorative setting, a meditation practice, a yoga practice, time alone, or regular journaling—and stay the course.

5. Know your field.

 

Trading is far more than a set of skills; it’s an ever evolving field built on the shoulders of giants.

As traders, we must constantly work and remain up-to-date with research and writing in trading, as well as peripheral fields that are relevant.

It’s easy to get overwhelmed with the sheer amount of information from news sites, blogs, social media, and so on and so forth. 

All of us have become news junkies but has it made us better traders?  I assert that the answer is no.

So I challenge you to make a list of key relevant readings, topics, and areas of study at the beginning of each new quarter or year, and stay the course.

 

6. Read outside the field. 

 

We learn about the vicissitudes of life and universal human our dilemmas through literature, history, fiction, poetry, art, and more.

“I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.” — Charlie Munger.

Branch out, and expand your thinking, your emotional terrain, your mindset and your trading will become more flexible.

7. Regularly engage in a form of coaching.

Whether you are at the early stages in your trading career or an experienced trader, you will inevitably encounter moments of doubt, failures, dilemmas, and challenges in our profession.

Trading is appealing to a great many people because it appears to be a business in which you can go at it all alone. 

A trader however without a coaching relationship in one form or another is left to make sense of these situations using only his or her own frame of reference, experiences, knowledge, and understanding of self. 

This is why most traders who learn the ropes through trial and error, through the process of learning from ones own mistakes, have a long journey to mastery.

No one needs a coach but recognize that even the best of the best performers across all domains of performance seek and get coaching

Understand that Michael Jordan didn’t need coaching in his years as the best basketball player in the world but nevertheless he actively listened and sought coaching.

So whether you find a respected colleague or join a formal coaching group, if you want to truly reach your highest potential coaching is an essential part of the journey.

8. Maintain hope and optimism.

 

A growing body of research in the area of hope and positivity teaches us that hope rapidly leads to other positive emotions that have a direct impact on our behaviour and the way we think and act.

Monitor yourself for a week or two, and pay close attention to the level of hope and optimism present in your life on a daily basis. If your findings surprise you, make some adjustments in order to build a stronger reservoir of optimism and hope.

9. Humility matters.

 

“Being humble is often associated with weakness or lack of power. Real humility comes when we see the world as it really is. The real world is a world of connectedness, of moving flows of power. When we transcend our own egos, when our outer self and our inner self connect, we experience increased integrity, increased oneness, greater connectedness. At such moments, we feel greatness.” – Robert Quinn

As traders, we all find ourselves drifting toward arrogance from time to time when we get too attached to our wins, assumptions, models, concepts, and more creating the ill-suited condition where we think we are smarter than the market or in someway different or better than other traders. 

This is a prime setup for catastrophe. 

The work of fostering humility happens when we are engaged in a conscious journey to mastery knowing we’ll never arrive because that’s not the goal. The goal is the journey.

Summary

To summarize, continual development is an important ethic and mind-set for every trader. Traders from novice to experienced are well served by routinely setting development priorities, seeking feedback to uncover the most important areas of development, and creating mechanisms for accountability.

It’s hard to grow alone, so support yourself by seeking coaching, or having a support group you can lean on.

9 Steps to Trading Mastery

by editor time to read: 5 min
0
×
Sign up for our weekly newsletter
Stay up to date with the podcast, and get notified when the next podcast drops.