The modern-day answers for so called success is drummed into us from early school days. Whether its school, our careers or in sporting endeavours we hear that hard work, dedication and commitment with a spice of talent thrown in will help get you to the top or achieve your dreams. Trading is one profession however where hard work alone will not get you far in reaching your aspirations. Of course, they have a part to play but they must be balanced with a wide-ranging set of refined critical skills to perform and achieve consistent annual returns
The Trading Monk
It is not surprising that very few high achievers in the business world succeed as traders. The Alpha male mode of consciousness actually works against the counter intuitive movement of the markets. A Buddhist monk is more likely to succeed in trading over most business and corporate leaders. Buddhists value the mental state of equanimity which is also one of the most critical mindsets we need to practice as a trader. Equanimity is holding an even mind and a state of psychological stability and composure which is undisturbed by experience of or exposure to emotions, pain, or other phenomena that may cause others to lose the balance of their mind.
Greed and fear are the overriding emotions experienced by most newer traders so it is important to understand the power of our own thoughts and resulting actions that emanate from these thoughts. When we are making decisions based on these overriding thought patterns we are doomed for failure. We have to throw away goals and outcomes whilst learning to be present so we can make critical decisions based on what is in front of us rather than what has occurred in the past or what may happen in the future.
The markets are counter intuitive and moved by a myriad of complex factors which means we have to totally release our outcomes for each trade and future returns. All traders who have been around for a while know that we never usually make money on the trades we expect which means we can never predict where our big winners are going to come from.
The Trading Mathematician and researcher
Trading is a pure numbers game so if you have a passion for numbers you are in the right game. One of the important things I have learnt from trading and building systems is how perfect numbers are. The more I play with number patterns the more I am amazed at how perfect number sequences are in the universe. I am slowly understanding how everything can be explained through mathematics. There is no doubt that those who are mathematically gifted will have a great advantage when developing systems for trading. Most traders I have known- myself included have been through periods of delusion. It’s very easy to curve fit data or see patterns that don’t exist. We need the numerical skills to truly understand the ramifications of our research approaches.
The Trading Artist
To develop trading strategies that consistently reap high annual returns also requires immense creativity. We must always be seeing things from multiple perspectives and moving beyond the small confines of how we experience and see the world. The skills of Systems Thinking are well worth developing in order to build robustness and resilience in your trading careers. To see beyond our current perspective requires creativity and an ability to be wrong and test ideas that may seem illogical at the time. Einstein reminds us that We can’t solve problems by using the same kind of thinking we used when we created them.and to raise new questions, new possibilities, to regard old problems from a new angle requires creative imagination.