How to Accelerate Your Trading Learning Curve and Increase Your Largest Profit Days, Part 1

There’s a hidden enemy hurting your trading results. It’s not a lack of discipline, or falling prey to your emotions, or using bad strategies. All those things do hurt, but they’re usually visible and can always be fixed. What I’m talking about is more dangerous.

It’s more dangerous because it’s not readily apparent. And also because it directly affects everything else. So what is this powerful hidden enemy? It’s simply this: being satisfied with your best performances.

Wait, what? Aren’t you supposed to be happy when you do well? Of course you are. And you should reward yourself mentally and emotionally. But don’t linger there. Enjoy the achievement, but don’t be satisfied. Here’s why…

Being satisfied with your best results to date leads to complacency and untapped opportunity. It causes you to not progress rapidly and reach your true potential. And yet the key to surviving your learning curve, and to reaching elite levels of performance if you’re already profitable, is to keep making your ‘best’ better.

If your current best trading day resulted in a net profit of 7 points on the ES emini S&P’s and you’re satisfied with this performance because on most days you barely break even, what kind of motivation are you giving yourself to break through that level and have a 10 or 15 point day? And if you’re not motivated to achieve that, how can you expect to improve?

The Secret to Great Trading Performance

You may be reading up to this point and thinking that you don’t have to always be improving your best performance to improve; you could simply improve by having less bad performances. Very true. But let me ask you a question. What is easier to do, fix your weaknesses or improve on your strengths?

Think about it. What do you find easier to accomplish in life in general, overcoming something that you struggle with or getting even better at something that you’re already good at? I think the answer is pretty obvious. And the answer brings forth an interesting conclusion…

That conclusion is that while elite performers (whether they be top athletes or top traders) definitely do constantly work on their weaknesses, they spend just as much time- if not even more- working on their strengths. This keeps making their ‘best’ even better, and those good performances greatly compensate for all the times they don’t do well.

Let’s take an example. Suppose you’re good at trading intraday trends. Your strengths are patience and a lack of fear of regret. You’ve always had these character traits and they translate into giving you the great ability to hold your winners longer than most people since you’re able to wait and are not always worried about regretting losing the profits. You also have the technical strength of detecting trends early and reading them well. On the other hand, you often over-trade range-bound days because you find all the fake breakout moves highly frustrating, and they bring out the anger in you, which are your natural weaknesses. You also don’t have a good eye for reading choppy days well.

Like most traders, you’re constantly working on those weaknesses. Always trying to control your frustration and anger so that you don’t over-trade and take losses. Always trying to improve your ability to detect and read range days. Now this is all well and good, and you should definitely be working on these weaknesses. But what about your strengths?

Well, if you’re like most traders, you’re not even focusing on your strengths. You’ve taken them for granted and are satisfied with the gains they bring you. But let me pose a question to you. What if you improved your ability to hold trending moves even longer and also became better at detecting them earlier? If in the average month you made 30 points from all the days with trending moves and lost 30 points from all the range-bound days- making you a break-even trader- improving your performance on the trending moves by only 20% puts you 6 points in the green, and suddenly makes you a profitable trader!

Of course improving on the range-bound days by 6 points would also have the same effect, but the point is that it’s much harder to improve that weakness of yours than it is to improve a strength! All things are already aligned in your favor when working on strengths, and this makes a given % improvement easier to achieve. And that makes all the difference.

What the Great Performers Do Differently

The great performers in any discipline naturally understand what I’ve explained above. They definitely always work to eliminate their weaknesses, but they focus even more on accentuating their strengths. They take the more efficient route to great performance.

If a boxer has a great natural right hook, he may work diligently on his weaknesses, but he’ll work even harder on perfecting that right hook. Because he knows that if it’s great, it can win him fights. And he knows that he can make it greater than he can make his other punches, and he can also achieve this feat faster. And if a tennis player has a good forehand, she’ll work a lot on all of her other shots, but she’ll become better overall if she makes that good forehand truly world-class. Because having a bunch of average shots makes her average, but having a killer forehand can win her games, sets, and matches.

So given all of this, here’s what I want you to do right now. Take an inventory of yourself and your trading results. What are your strengths? What key character traits contribute to your best performances? Do you have certain types of market environments that you make more money with? Note all of this down.

In Part 2 of this series, I’ll share with you the strategy I’ve used to improve my trading strengths, and how it leads to faster overall learning (which also helps improve the weaknesses), and to increases in overall profitability.

In the meantime, let me know what you thought of this post! Did it open up your eyes to a new way of looking at things? Or do you disagree with its conclusions? Let’s get a nice dialogue started for the benefit of all.

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