TIME TAKES TIME
We are what we do repeatedly. Excellence, then, is not an act, but a habit...Aristotle
There has been so much excitement about the run-up in gold and other commodities that many of us are at risk of forgetting about our most valuable commodity. There is a saying that excellence in trading is more a factor of time in the market than timing the market. That is a profound statement, as it speaks to the issue of what it takes to achieve trading and investing mastery.
The idea held by many is that the markets are a money machine, and all one has to do is get a computer, a trading platform and subscriptions to a couple of services, and that's that. If this were true, most would not be struggling day after day to understand and profit. This simply does not happen—for some pretty obvious reasons. Today, I will focus on two that relate specifically to your most precious trading commodity: time!
The first reason is that trading is an art and a science. Like so many other professions, it requires both skill and intuition. Let's say that you wanted to become a medical doctor. What would you do? You could rent an office, hang out a shingle, and start practicing medicine without a license or training. How long do you think that would last? How many of you would even consider doing something like that?
In order to become a licensed medical doctor, you must graduate from college, medical school and internship. Even then, most medical doctors go on to a specialized residency training that takes anywhere from an additional two to 10 years. We are talking at least 10 years of training for a medical doctor who then spends his or her entire career doing what is called "practicing." Why does a doctor tell you that he or she is still "practicing" medicine? The reason is that mastery of a subject as complex and ever-changing as medicine takes a lifetime of work. With the required continuing medical education courses, the constant challenge of new patients and unusual presentations of illness, and the barrage of information that must be mastered, the medical doctor is practicing until the day he or she stops. There is absolutely no instant gratification here; rather, it is a lifetime of diligent, consistent, methodical study. It is estimated that mastery of any profession takes approximately 10 years and 10,000 to 20,000 hours of practice.
The journey to trading mastery has many parallels with medicine. In fact, it has parallels with other professions that require both art and science. Many of you who are reading this are skilled, highly trained professionals who know what it is like to pay your dues by putting in the time and effort necessary to gain mastery. Why then do you imagine that trading mastery, among the most challenging and difficult achievements in the world, would be any different? It isn't. In fact, it is more difficult than most other professions because the type of thinking that is employed by successful traders is quite different from the thinking that takes one to success in the classical education system.
In trading, unlike any other occupation, losing is winning. If you think about that for a second, you will understand why so many simply cannot get their heads around this. When I started trading in 1994, I went to service after service like a lost child searching for the Holy Grail. I saw images and advertisements for hundreds and thousands of percent profits and my limbic rat brain lit up. The first time I saw the words "drawdown" or "sold for a loss," I unsubscribed from the service and moved on. The concept of losing was not in my vocabulary. I was a winner, a high achiever, and could not fathom the possibility that something I did would actually lose! I was so out of touch with the reality of the financial markets that I laugh at myself today!
Another observation on mistakes is that the trader who is right in his analysis 60% of the time and makes mistakes in less than 10% of his trades will make money. The trader who is right in his analysis 80% of the time and makes mistakes 20% of the time will lose...Roy W. Longstreet, "Viewpoints of a Commodity Trader."
There is no other thing that one does in life where losing is winning. Think about it again. How successful are you as a doctor if you only killed three people today? How long do you think you would last without sanction from the medical boards and lawsuits from patients? I assure you that your removal from the medical profession would be swift, well-publicized and painful.
Yet, in the markets, the ability to take small losses is what preserves you. It saves your financial capital to trade another day. It saves your psychological capital to restore itself in order to conserve energy, which you truly need to continue and grow as a trader. It saves your intellectual capital because your mind is clear, and it saves your physical capital because you are not eaten up with stress over hanging on to a loser.
It takes time to understand that there are more than 4 million technical patterns in the markets. Some of them work—i.e., play out the way we project that they will. Some of them do not. It takes more than a two-week trial with www.trending123.com to even begin to grasp the magnitude of the scope of technical analysis. It takes years to become a master of anything, particularly in the toughest game on earth—the financial markets.
Take time, do not rush, and allow yourself the luxury of learning in a consistent and dedicated manner. Ask questions of the experts on www.trending123.com. There is not a single person, with the exception of a trading savant (and I don't know any), who is expected to master the thousands of pages of educational information on www.trending123.com in two weeks. However, if you stay the course, apply yourself diligently, learn a little every day, and listen intently (and I mean intently) to every update that John does, you have a great chance to achieve mastery. Try to remember that John has spent the majority of his adult life in intense and constant study of charts and chart patterns. I could not begin to estimate the number of charts he has studied on his pathway to trading mastery, but it would likely be in the tens of thousands or more.
Time is your most precious commodity on the road to trading mastery. Take time, be gentle with yourself, and keep learning and listening. If you persevere in this with sincere effort and dedication, you can and will be successful. You have to want this more than you ever wanted anything in your life. Once you are truly committed to put in the time required, you will see the changes you want to see.
I will have much more to say about your most precious commodity in the weeks and months to come.
Gather in your resources, rally all your faculties, marshal all your energies, focus all your capacities upon mastery of at least one field of endeavor...John Haggai
Until Next Time,
Good Trading and Brain On!Janice Dorn, M.D., Ph.D.
janice@thetradingdoctor.comNeuropsychological Trading Coach
Dr. Janice Dorn is a graduate of the Albert Einstein College of Medicine, where she received her Ph.D. in Neuroanatomy. She did her postdoctoral work in Neurophysiology at the New York Medical College. She received her M.D. from La Universidad Autonoma de Ciudad Juarez, did one year of clinical clerkships in Phoenix, Arizona. and then completed a Neurology Internship at The University of New Mexico in Albuquerque.
She trained in Anesthesiology at UCLA, where she also did a Fellowship in Cancer Pain Management. She completed a Psychiatric Residency at the Maricopa Medical Center in Phoenix. She has been a faculty member to the rank of Associate Professor at the University of Texas Southwestern Medical Center in Dallas, The University of Missouri Medical Center at Columbia and the Chicago Medical School, where she won numerous awards for outstanding teaching. She also held the position of Director, International Clinical Research for a major pharmaceutical company, in which capacity she traveled internationally for nine years, and has visited almost every country in the world, including living in Scotland, Germany and South Africa. Dr. Dorn began a private boutique practice of Biological Psychiatry, Addiction Psychiatry and Psychoneuroendocrinolgy in Phoenix in 1987.
Dr. Dorn holds the following Board Certifications:
Diplomate, General Psychiatry, American Board of Psychiatry and Neurology
Diplomate, Addiction Psychiatry, American Board of Psychiatry and Neurology
Diplomate, American Society of Addiction Medicine
For the past twelve years, Dr. Dorn has focused her attention on trading, mentoring and commentary in the financial markets, with emphasis on Behavioral NeuroFinance, Mass Psychology and Trading Neuropsychology. A graduate of Coach University, she is an active trader, trading coach, and the author of 300 publications, relating to trading and investing neuropsychology, market mass psychology, psychoneuroeconomics, behavioral neurofinance and holistic wellness. Dr. Dorn is a sought-after media personality, lecturer and trading mentor who has provided real-time, web-based personal coaching for more than 600 traders and investors.
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Disclaimer - I am not a commodity trading advisor. The information on this site is for trading education only. There are no trading recommendations for any one individual made on this site and this information is paper trades for trading education. All trades are extemely risky and only risk capital should be used when trading.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.