This Week’s Battle Plan
Succeeding At
Trading
This week’s Battle Plan has little to
do with Strategies, Money Management or Philosophy. This week we’re
going to focus on what you need to do to achieve greatness in
trading. It has to do with creating a single-minded focus in
order to become one of the top traders in the world.
I first published the following piece
about five years ago in my book Connors
On Advanced Trading Strategies. I read it again this past week.
When I was done, I realized that it is as true today as it was then.
And unless proven otherwise, it will be true for generations to come.
The name of this chapter is “How Superior Beings Become.”
And, as you will see, you can achieve substantial success in trading.
But like everything else in life, it comes down to work…lots of hard
work.
How Superior
Individuals Become
I would like to conclude this book with
a look at the role that practice, experience, and psychology play in
leading one to become a superior trader. Through the use of a study
done on elite musicians, chess players, and athletes published in
1993, we will correlate these findings to our own profession.One of the subjects I have always been
fascinated by is how and why individuals achieve greatness in their
fields. Why does one individual dominate a sport, an industry, or an
art, while the masses fail? Does genetics predetermine greatness or is
it some other factor that allows individuals to become leaders in
their field?I recently finished reading a book by
Howard Gardner entitled Extraordinary
Minds. In the bibliography, he refers to a study published in
Psychological Review in 1993. The study, “The Role of Deliberate
Practice in the Acquisition of Expert Performance,” looked at
whether “great” musicians, chess players, and athletes were
genetically predisposed to achieve greatness (physiological) or
whether greatness came as a result of external factors such as
practice. (Of course, since I am a trader, I ask the question from
this perspective — “are great traders born or can they be
developed?”)The study’s findings overwhelmingly
showed that there was absolutely no basis to the argument that
genetics is the sole determinant in predicting success. In fact,
genetics played at best a very minor role in differentiating between
those who were “great” in their field versus those who were
merely “good.” The number one factor in determining
whether or not one reached the highest levels in their field was the
amount of time these individuals spent on “deliberate
practice.” Deliberate practice is defined as the amount of
time one spends in attempting to improve their performance. Simply
performing the act is not deliberate practice; deliberately attempting
to push oneself further is.Drs. Ericksson, Krampe, and
Tesch-Roemer found that those who achieved greatness in their fields
spent anywhere from 30 minutes to two hours more per day on deliberate
practice than those who were only “good” in their field. The
authors go on to say that 30 to 120 minutes of extra practice does not
seem like much until one begins adding up the difference over a period
of time. For example, they cite numerous studies that show that it
is virtually impossible to reach the pinnacle in one’s field without
at least 10 years of concentrated effort. Therefore, the 30 to 120
minutes each day the “future greats” spend on improving
themselves works out to be many thousands of hours of extra
practice over a 10-year period.I suspect that if the authors looked at
the most successful traders, their findings would be the same. Buying
Blackbox systems, trading crazy methodologies, or listening to gurus
who claim they can tell you where the Dow will be three years from now
will never bring you into the ranks of the trading elite. Simply put,
10 years of deliberate practice and hard work is the only sure recipe
for success!
Day One
Many of you are already on this path to success. Many of you have
already achieved it, and many of you will soon be there. But, if you
buy into the above argument, you’ll get there faster and further from
putting in the time. And, that time, if well spent, will potentially
lead to even greater success.
One of my programmers told me this week that TradingMarkets now has
over 24,000 pages of information on it. Use it to your advantage!.
There is no other site in the world that has the depth of trading
information as this site. And, I strongly urge you to start at TM
University. That’s the heart of this great information. And with
so many articles on proper trading, many written by professional
traders and money managers, there is no end to the knowledge you can
gain. And this knowledge, if applied correctly, ultimately leads to
mastery. And mastery, ultimately leads to profits…potentially substantial
profits.
New Features
We’ve added more new features to the site. First, you may have already
seen it, but we now have a Member’s Commentary column.
We have many, many smart traders who use this site and we can all
learn from them. The “Members Commentary” is a combination
of market insight combined with education. If you want to submit an
article to us please do. Send it to commentary@tradingmarkets.com.
If your piece is accepted, not only will you see yourself published,
you will also receive a $100 gift certificate to use at our TradersGalleria.
Other new features include a new afternoon column entitled “The
Market In Pictures,” two intra-day market audio reports that you
can find on the home page at 10 am and 1 pm (ET) and our daily
“Lesson Of The Day” which will focus on the published lesson
that has the most meaning for your trading that day. And, we’re
posting the daily pivot points for the e-minis on the home page each
day so you can have them readily available to you. I also expect us to
soon begin publishing commentary and lessons on the Single Stock
Futures markets. Rumor has it they will begin trading next month,
and we’ll be there to help you get going in them.
Have a great week trading (and our sincerest condolences go out again
this September 11 to all those who lost loved ones a year ago).
Larry
Connors and Brice Wightman
Larry Connors is CEO and co-founder of
TradingMarkets. He is also the author of four books on trading,
including “Street
Smarts,” co-written with Linda Raschke, “Connors
on Advanced Trading Strategies“, and “Trading
Connors VIX Reversals.” Larry also recently released the
video course ”Buy
The Fear, Sell The Greed: Timing The Market Every Day For The Rest Of
Your Life.â€
Brice
Wightman is a Market Analyst at TradingMarkets.com
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