I recently got involved with Mike Bellafiore SMB Capital at an excellent conference you organized TraderLion. The topic of our presentation, which you can watch via video, was Trader Development: Best Ways to Improve Our Performance in the Financial Markets. Here are some of the key ideas we touched on in the session:
1) You must discover your position in the markets – Only by experimenting in different markets, in different time frames, and with different sources of information, can you know what makes sense to you and what you are good at. In the School of Medicine, students rotate between different clinical services, such as internal medicine, surgery, psychiatry, and family medicine, to experience these specialties firsthand. Only after experiencing all major areas of medicine do students decide whether to specialize in a particular field during their residency training. Likewise, if you're learning the markets, you'll want to try out different “specializations” and discover your potential niche. Often, traders in developing countries are so eager to make money that they immediately put their capital at risk and try to emulate what they hear from would-be experts. This is not how experience development works. Trading in different ways in simulation mode and with a small volume allows you to discover who you are and what works for you before Run through your capital. Because the markets are always changing, we must always evolve as traders and return to ways of discovering and learning.
2) Learning to trade is a team sport -There is a reason why successful trading firms like SMB and all successful hedge funds are organized into collective structures. The team leader is an experienced and successful trader who creates a group of novice traders to assist in the trading process. Junior members bring unique skills to the team and pursue opportunities as they arise. The Team Leader leverages the input of team members and acts as their mentor, showing them in real time how to translate their ideas into deals and manage them as positions. As a result, the most important learning occurs in the office, where markets, ideas and trading are seen in real time. The saying in medical school is “each one teaches one.” In a successful team, everyone learns from each other. And if you are an independent trader? Your challenge is to connect with other independent traders who are going through their own learning curves. This is where business communities and business conferences can be particularly useful. Share your best ideas online and you'll find that others with good ideas will reach out to you. This is the beginning of the kind of teamwork that accelerates the learning and development process.
3) Learn from your strengths – In particular, if you are an experienced trader looking to develop your expertise, you will want to study what you do best and where your successes have come from. Research in psychology refers to the “flow state” as a unique state of consciousness that occurs when we are immersed in activities that provide challenge and optimal interest. In a state of flow we are more productive, and a state of flow fuels our creativity, expands our awareness and helps us discover unique opportunities. Exercising our strengths creates an experience of flow, so when we are immersed in trading in rewarding and meaningful ways, we are more likely to get the best out of us. When we work in teams with others who have different strengths but also benefit from their own flow patterns, we find that the work energizes and inspires us—not something that exhausts us.
What we often do, we internalize. If we proceed with trading in the wrong way and create frustrations, we absorb a frustrating mindset. If we engage in trading as an adventure – an opportunity to discover who we are and what we do best – then our trading can enrich our lives in many ways and provide a lasting experience of fulfillment.
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