A trader recently asked me what I would say to my younger trader self if I could time travel and tell me. This is not something I'd considered before, and it made me reflect on what I wish I had known earlier. I think some of those reflections could be valuable lessons for many of you.
Trying to "Win"
My initial response to the trader was: "Trying to 'make money' or finish a session green will be the single biggest inhibitor of your success young Merritt. I'm from the future, believe me on this one. Let me teach you to 're-define what it means to win'."
This is a big one for me, and likely for you too. In fact it's such a problem that a lot of traders I work with don't realize how deep it goes, and perhaps even worse, how subtly and softly it drives their behavior.
It largely comes down to figuring out your true motivation/reason for taking any trading action. Whether it's an entry, add, scale out, exit, or moving a stop or target. Without the hard work on understanding your each and every "why" behind each decision, you'll find yourself chasing results instead of building a sustainable approach.
I would go so far as to say that most traders operate like this to some degree, and guess what - most traders fail don't they. Allowing this competitive desire to "win" in the preverse way of expecting that your hard work will/should lead to making money on a trade or a single session - leads to absolute disaster in your trading. Kills consistency. Leads to the ultimate failure of long term trading success.
Big problem, yes, but simple solution: force some self-awareness through behaviors you can control. So you can either journal your thoughts and rationale and "why" for trade decisions after the fact as you trade, or you can start to consciously become aware of your own impulses and desires to make a trading action, in real time, and then think about the real underlying "why" for it, and then filter it through a process that you want to be trading by. That's a lot to unpack in one long sentence, but I suggest you go back and read it again and again until you get it.
Slow Down there Lil Fella
It took me so long to learn this. As someone who is risk-seeking, I have no issues putting on more risk. The struggle for me is keeping risk in a healthy place instead of trying to make something big happen quickly. Sure some of you are risk-adverse and deal with an opposite problem, but I see many who either normally, or when faced with "Trying to Win" [see prior point], start to press and risk more than they should.
Keeping risk per trade consistent, and keeping it in line and healthy given your other risk parameters like account size and max drawdown if mandated by a firm, is an incredible key to success. Taking too much risk, always trying to press, hit homeruns, etc, this all leads to negative outcomes eventually. The worst part is often times this behavior leads to the results we want... but it kills our consistency eventually.
Learn to have a solid risk plan. Write it out. Keep to it. Don't swing for the fences. Don't max out your risk all the time, or at the first hint of frustration. Slow down there lil fella.
[I'm reminded of the joke about the young bull and the old bull who see the field full of heffers. It's the perfect analogy here, look it up if you don't know it.]
Good Fundamentals Matter More Than You'd Like
One of my favorite lines from any book came from a tennis book by Tom Veneziano: "First do the simple. Then do the simple well. Then simply be the best at doing the simple."
This couldnt' be more true for tennis, or for trading, or really for any performance endeavor. For a long time I would gloss over solid fundamentals and skills of good trading quickly, "Yeah, yeah, I know, I know, let's get to the good 'secret sauce' part of the book/article/post. I know all that stuff." My younger self would say.
Buddy, perhaps if you focused on building some better fundamentals rather than trying to be an advanced wizard too quickly, you'd find success sooner. It's true.
I hope you enjoyed this quick bit of time travel with me. Perhaps it gives you some needed perspective from the other side of young here I now find myself in.