The impression that people get about traders and those who make full-time day trading a career can sometimes be a funny thing. I'm often asked about what I do for a living and when I tell people that I trade the financial markets for a few hours each day from home (or sometimes from my laptop on my travels), I get a lot of people asking what I do with my extra free time.
Of course, I tell them about how I like to get away from the computer screens by going out for a long walk in the sunshine followed by a mid-day workout or how I will spend a few hours on some of my favorite hobbies and they can appreciate those activities just fine, but when I tell them that I also spend a lot of time doing research, teaching others, and testing new trading ideas to further improve my craft I often get asked - "why?"
They wonder why it would be that if a person can trade and be consistently profitable that they would continue to spend time OUTSIDE their active trading hours to learn more. What's the point if you are already making money? Why not just stop there and settle into a simple routine?
High Performance Activities Have a Lot in Common
I've been asked this a lot of times in many different ways but it still stuns me a bit when it happens because I'm never sure why people think that trading is so different from other high performance pursuits. Why is it so acceptable in other professions to want to push yourself to be better yet as a trader you're supposed to stop trying to improve once you're making a good profit on a regular basis?
For example, there are many ways that the mindset needed for high performance in athletics and trading overlap, yet nobody would think twice about an elite sportsman who still practices every day and ask why they put in extra effort outside the actual matches. After all, you can pretty much look at any legendary athlete whether they are football/soccer stars like Messi or Ronaldo, or hockey players like Crosby and Gretzky, and people will tell you that the one thing that was different about them is that they NEVER stopped pushing to get better through training their bodies and minds. Every day was an opportunity to improve.
They knew that to reach the top they needed to train harder than anyone regardless of their natural talent but they also realised that staying there meant continually working on their craft to reinforce their strengths and improve their weaknesses.
It should be no different for a trader. They should always be looking to learn, to grow and improve their skills, and to build their overall level of knowledge and the "trading toolbox" at their disposal.
Setting Aside Time for Learning and Development
This is why for many years now I've set aside a bit of time each week to experiment with tweaks to my trading approach or to research and explore entirely new methodologies. It's not about trying to reinvent the wheel and completely overhaul a trading approach that already works. It's just a matter of growing skills over time, occasionally finding ways to improve your edge further, and also benefiting from the confidence that comes with increasing your overall trading knowledge.
Although I try to make these small testing and research sessions a part of my regular routine, there's usually times during the year that I delve more deeply. This is actually the major reason why things have been a bit quiet on the blog front lately - I've been too busy experimenting and trying new stuff out!
In many ways I almost look at this kind of experimentation as "play" because I enjoy it and don't take the results too seriously. I'm looking to approach the market and my trading in fresh and interesting ways that feed my curiosity. It can be as simple as trying out a new rule for trade management or as complex as a total overhaul of charts, analysis, and methods.
Most of the time my trading experiments may not amount to much in terms of a grand new strategy or even an improved trading edge but there's still ALWAYS something to learn. As Edison said while developing the commercial light bulb, "I have not failed. I've just found 10,000 ways that won't work." Each practice session or idea tested tells you something that can be useful in your future trading if you keep an open mind and enjoy the learning process!
Embracing the Process
Since coming back from a lengthy summer vacation I've really immersed myself in this development work which has meant a lot more hours spent on research and testing than usual. I'm still actively trading the Emini S&P 500 during the mornings on my regular Tuesday through Friday schedule and working with a handful of students but I've just had too many intriguing things to explore that were on the back-burner to put it off any longer. Add on a few very compelling strategies and system tweaks that some veteran STA traders have been developing and testing and this research cycle has pretty much kept me busy into for months!
A few interesting things have even made it through the early testing phases and I've been trading them live with smaller position sizes. That's all part of the process to integrate something new into your trading the right way - establish your rules, trade your plan in historical tests, trade in live markets with a Sim account, and if everything looks good then ease into trading real money with small size at first. Once you've gone through all of that you always gain something whether it's knowledge and skill that improves your trading expectancy or learning what trading situations you should avoid in the future and coming to those conclusions is a highly rewarding process in many ways.
That there is more to trading than just short-term reward is what people sometimes just don't understand. Just because you've "made it" in an endeavour doesn't mean you put things into cruise control without any further time or effort invested. That just sounds like a good way to see your skills atrophy over time or to lose whatever edge you once had as market conditions shift.
And really, that's what makes this so much fun over the years. There's always more to learn, always ways to improve, and every day offers new and interesting challenges. Not many jobs out there are like that and in most it's far too easy to get stuck in a mental rut where everything becomes routine and there's little prospect of escape. So when people ask why I put in the extra time and effort after my trading day is done, I guess the answer is - "because I love what I do, so why wouldn't I?"