WORK SMARTER

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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eightbo
Posts: 2154
Joined: Sun May 17, 2015 8:19 pm
Location: Malta / Australia

This began as a simple reply in another thread but I think there's a lot of value in here for traders so I'm making it a standalone post to benefit the highest number of people. You might want to grab a coffee.

IMPROVEMENT, GAMES, AND THE CORE ASPECTS OF TRADING.
Kai wrote:
Sat Aug 31, 2019 11:32 am
It's probably a crude analogy but in Football Manager every player has a hidden "Pressure" stat from 1 to 20 that tells you how well they perform under pressure. So knowing that stat, I know exactly what to say to my player during halftime to make them perform better, whether it's "no pressure, just play your game" or "I expect you to make the difference" etc. Another hidden stat in the game that can somewhat relate to trading is "Potential ability" that greatly varies from player to player, as harsh as it sounds some players in the game have their potential capped at a certain number and they will never improve past that point. I feel that every one of us traders has to try and make the most of his own potential no matter what it is, although it may not always be possible to do that for any number of reasons. I'm not suggesting that Eightbo has limited potential as a trader, quite the opposite, judging by one of his older videos that I recently saw I'd say he looks more like a wonderkid in FM terms.
eightbo wrote:
Sat Aug 31, 2019 6:36 am
Got a few issues to address still but definitely going in the right direction since I posted this (working smarter too).
That's great to hear, I always try to work smarter because it usually means that I don't have to work harder :D
...
I try to be the best version of myself, I already know that it is an impossible task and that I will never succeed in becoming the absolute best version, but it won't stop me from trying.
Neural plasticity shows us that the brain has a virtually unlimited capacity for learning. You'll always be constrained in some way by your environment (e.g. liquidity in a market) but I like to believe there's no limit when it comes to cognition, extending to decision-making activities such as trading, your ability to manage a football team, or playing a game [until you reach those physical constraints]. Most activities have multiple aspects to them and improvement comes about simply by developing them. If you really have hit physical constraints in all aspects of an activity, you can continue to improve by changing to a similar activity which provides a new environment and begin developing there.

Improving often involves work and as such commonly requires something driving you to do it. This driver (or lack of) is where I'll now differentiate between 'improvers' and 'non-improvers'. Regardless of what we're improving at, it's important we evaluate the potential benefits (output) for our efforts (input). Once the ratio passes a certain point, it becomes more efficient for us to change the activity and reap the benefits of improving there instead. The reality is most improvers either haven't passed that point, or they have and are pretending to themselves that they haven't so they don't have to endure the discomfort that comes with changing activity / having to put in work again. It's also common for improvers to tell themselves they've run out of activities to improve at which would contribute to their goals. Most likely, there are loads of suitable things out there but they remain invisible until either the driver becomes strong enough or they become aware of their aversion to the implied pain of change/unenjoyable work.

Improvers can 'work smarter', accelerating their progress and enjoy a higher ratio of results vs. effort by being aware of this concept and reframing their approach to improvement which I'll get to later.

Believing there's always room for improvement puts me in a good spot because even if I'm wrong, I'll plateau all the same. But if I'm right, I'm not capping myself with a limiting belief when actually there was room for further improvement. In the fighting game community, you'd call that an option select — one set of inputs which covers multiple possibilities (all if you can). I've made it a habit in my life to line up option selects wherever I can to ensure I'm capitalising optimally on opportunities (or at the very least, putting myself in a position to do so).

This leads me onto expectations — a key component in our trading.
A simple high-level overview of the core aspects of trading could be "Strategy", "Execution", and "Emotion".

I put together a model for my own trading in a notebook recently and landed on these four aspects:
   > "Emotional Awareness" (monitoring decision-making quality & course-correcting efficiently where required)
   > "Airtight Environment" (trading rules + execution of those rules)
   > "Money Management" (I like to think of this as DEFENCE)
   > "Edge" (OFFENCE).
The first three come under Risk Management and the last two make up our profitability. They're also in order of importance for my trading.

Above the four aspects, I have EXPECTATIONS from which they all stem. I view expectations as a somewhat of a filter which our decision-making passes through. This can be thought of just like how our decision-making is tainted when we're in an emotional state, except it applies to us even when we're in a calm state of mind. For a long time, I've been operating from a dirty set of expectations which were not accurate with reality. This incongruence is the source of most (if not all) of our emotional problems in trading. I'm becoming more introspective these days working to adjust the roots if you will so that they're more conducive for success. I see now that we can use our emotions as a tool to identify misaligned expectations. People throw around the word discipline a lot but I pose to you that it's all a load of bollocks. I started introducing loads of stuff that was uncomfortable but beneficial in my life like taking cold showers, sleeping on the floor, running etc. all because I thought I needed to become a more disciplined person to succeed in the markets. That's what everyone is saying in the world of trading and investing. BE DISCIPLINED. I say fuck discipline, what we need is emotional awareness coupled with correct expectations. I suspect my trading is going to go through the roof by the end of the year because of this realisation but time will tell.

I'm really satisfied with this model and it clicks for me. But when I first drew it up I actually OMITTED money management altogether, I mean that REALLY sums up my trading thus far. After I gave it some thought, I've always been this way in life (offence-orientated) — how I play chess, only training offense in games, playing ultra-offensive characters in fighting games, hell I was even a striker back when I played for a footie team. And conversely, I can't come up with any defensive examples.

A lot of people hear games and they think 'fun' but if you're playing anything seriously, and by that I mean you're actively trying to improve, it's actually about being reflective and often spending time grinding on the weaker aspects of your game even when you don't want to nor enjoy it.

My experience in competitive games has allowed me to interact with a myriad of skill levels and personality types and I've observed that a lot of these improvers are growing far slower than they could be compared to the level of effort they're putting in. These gamers are not working smart enough — they're putting their efforts into aspects which aren't producing results. Here's the key takeaway: We need to regularly check-in on our results vs. effort ratio and use that as feedback to guide us in our improving. In my case, I tried to brute-force discipline elsewhere in life EXPECTING it to fix to my problems at the screen. I couldn't follow my rules and everyone was saying you need discipline to follow your rules! It made sense and how could all these big traders be wrong? I thought. I went with it and that's fine. The flaw in my approach, however, was not utilising the feedback which was staring me in the face. I was actively working on my discipline, so I thought I'm improving... right?! And I was. A little. That's the painful thing about it. But my results vs. effort ratio was garbage. By not having an awareness of this concept my growth was massively hindered. I thought maybe I just needed more time, I just needed to become a bit more disciplined. You all know the saying "If it ain't broke, don't fix it.". I'd like to challenge that idea today and say that's an inefficient way to look at things. Instead, I propose we stay hungry for more. That we probe and tweak into the unknown. That we challenge what we think we know and believe there is a new way, a better way - if only we'd look.

The more proficient you become at an activity, the lower your ratio will usually become. Smaller gains for more effort. That means if you know there's a ton of headroom between where your current skill level and the physical constraints above you, you should be seeing a stream of steady benefits for your efforts so if that ever suddenly slows down or you're not really getting any results it's a sign that perhaps you should be placing your efforts on another aspect of your game. If you hit a wall in all aspects and run out of ideas, you can always consider another activity. We need to give our results some time to present themselves but it's important we don't settle for a poor ratio for too long. Raw effort alone is pointless if it's aimed in the wrong direction. So as improvers, it's key for us to nurture our understanding of the relationship between efforts and results. We must avoid staying dormant after recent surges in our results. Let these improved results become the new baseline and once you've squeezed all the juice out, welp, it's time to find your next juice source.

We know it can be fruitful to press on your strengths and should be doing so, just as we know there is a time for working on your weakest aspects (particularly when they make up the foundation / core of the activity) but the concept of continual improvement is not about either of those things. It's about ensuring there's a certain quality to it all and understanding that yesterday's improvements ended yesterday. Let's reframe our approach to improvement and begin asking ourselves "Where can I place my efforts where it'll get me the most mileage?" → then actively monitoring that mileage. For me now in my trading, it's all about working on my DEFENCE and my monthly goal reflects that.

Today's marks the 1st and I encourage all of you to set your own goal for this month if you haven't already done so. It should be process-based, targeted to a specific aspect/skill, and you need to define some means as to how you'll measure the improvement come the end of the month.

If you really think about it, trading is just another game. The market is the server, the participants are the players, it's zero-sum with winners and losers, and you deploy strategies based on decision-making in an attempt to 'win' — whether that's moments you use discretion when trading manually or putting thought into the variables of your automation.

I don't care what sport you trade or how good you think you are, there is always another level.
WORK SMARTER and get there.
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Kai
Posts: 6092
Joined: Tue Jan 20, 2015 12:21 pm

I think you're already working smart by utilizing this forum in the first place, from opening yourself up to criticism while seeking encouragement and motivation to promising an update on your progress which will no doubt guarantee that genuine effort will be made. I think that's brilliant, people did a similar thing with blogs etc. It's a form of networking of which I'm a huge fan of, people forget that this forum as a collective probably has millions of markets worth of experience and I rarely see people using it to its fullest potential. I remember in my first few posts on the forum years ago I was asking for guidance on football because I couldn't see how to improve further and had nobody left to learn from, until Peter and co replied and pointed me towards the Portuguese traders who drastically changed the way that I view football markets.

Because of our background I think it's normal that we compare trading with gaming, one of my first thoughts when I discovered scalping was that it really feels like I was playing a game, due to the mechanical nature of scalping on the ladder, so naturally I wanted to become better at it. We are obviously latecomers to the trading game, we basically have to find ways to work smarter and more efficient, to try and bridge the gap with the traders that have been around for so long. At least without a gambling background we don't have too many bad habits to get rid of which is always a plus. It's probably much harder to become profitable today than 10-15 years ago because the markets changed so much, but at least nowadays there's so much more quality information and advice around which helps to balance it out.

However, I think it's important to stay humble and grounded, if we try and be too clever it can have an adverse effect as well, there's diminishing returns hiding everywhere. Like that Scientology trader whose name eludes me atm that claimed to be a disruptor or something and came to preach and promote his revolutionary ideas to all the uneducated plebs that frequent this forum :mrgreen: Didn't take long for the poor guy to get slapped across the face with the banstick. Like someone once said, there are 2 types of traders, those who are humble and those who are going to be humbled :)

Not really sure how much unique insight I've actually offered, if any, I see it more as a compilation of insight from all the experienced traders that I've had the pleasure of researching thus far, too many to name but maybe half of them being sports traders while the other half operating on different exchanges, because obviously the trading game that we're all trying to play has been around since the 1600s (iirc) when the first exchanges popped up.

This is all strictly IMHO so make of it what you will, I'm at that stage of my life where I try to keep myself out of arguments, even if you tell me that 2+2=5 you're absolutely correct, have a great day :) I'd rather just post a random meme instead of trying to change someone's opinion about something, people on the internet hate being proven wrong and will rarely admit it despite the mountain of evidence against them, so I see it as a pointless exercise most of the time. However, I am a big believer in networking and sharing of experiences, I think it benefits everyone and helps push everyone to become better.

I really like how you're trying to break down trading in different parts, that is exactly the process that I use when trying to improve at something or trying to learn something new. In previous discussions I think I've already mentioned that I'm a big fan of video analysis, in short I use it to try and identify my weaknesses so that I know which part of trading I need to work and focus on. That process served me great in the past, I also mostly cut relevant clips from my own trading and from others, (there are actually quite a few short clips of Peter showcasing an important piece of info that I was missing), and record ideas and trade examples for future reference and automation projects etc.

You may find that this is just the first of many realizations, more of them might be just around the corner if you keep at it, and if we're speaking in gaming terms once the dust settles in your mind you'll feel like you've gained several level-ups :) If you stumble on something that is working for you then you have to keep doing it and see where it takes you, a lot of my most productive periods during which the biggest progress was made actually did start with a big realization.

Might as well make a short list off the top of my head of some of the biggest realizations that I've had, I guess in the context of racing markets since people are mostly interested in those markets, even though I do prefer other markets. You've talked about the mental side of things so I can put a bit of focus on the technical side of things, maybe somebody finds it useful, you never know.
  • Realizing that even the basic principles and concepts from the financial markets still apply here was revolutionary for me, huge benefits for very little effort to learn those, without the need to go into too much depth.
  • Reading the market started making a lot more sense once I realized how important certain price points were, identifying the important prices where value can potentially switch sides made all the difference.
  • Had huge breakthroughs when decided to look beyond the market noise and try to identify long term trends, most of the work turned out to be simply trying to tell the difference between a simple retracement and a complete reversal.
  • Scalping was my starting point and took me a while to realize that the safest scalping positions that I was looking for were actually much more suited as swing positions, that changed my whole approach, especially the execution part.
  • In general realizing that in prerace there are only a finite number of scenarios that only slightly differ from one another, breaking down each scenario to figure out the best approach for every type was very much key for maintaining consistency.
  • Realizing that prices in most preoff markets ideally want to test both the bottom and the ceiling of its trading range at some point, for example early overbacking on a favorite may trigger a complete trend reversal if there is space and time for it, even on football.
I agree with you that everyone can improve way past their current ability, even the best traders, there are levels of trading that seem almost impossible to reach, that's the challenge for everyone I guess :) If you ask me what a perfect trader looks like, say in the context of prerace racing, I would maybe say that he would be a swing trader that is trading almost purely by instinct riding the order flow as it moves, constantly adjusting positions and managing risk accordingly. If for example he's following a downtrend then he's taking profit at every lower low and entering again at every temporary retracement at a lower high, getting a lot more ticks out of a trend than simply holding a single position, almost like surfing the waves. Maybe on top of that he's even countering the trend at every lower low the madlad! To really get the maximum amount of ticks out of one move.

Does such a trader even exist? :mrgreen: I don't think so.

Meanwhile, most of our trading just feels one-dimensional and far from efficient, it's still considered good but you can't help but feel there is still untapped potential here. If we take a simplified example of the mainstream prerace swing trading style, we basically open a swing position and then we have to sit through all the noise and wait, if we get it right the price starts moving in the right direction, then retraces a bit and we still have to sit through this (some exit partially, some are already out) waiting for the trend to continue to a new high/low, then it retraces once more before finally aggressively reaching our target price with the help of late momentum just before the time runs out. Then when we analyze the execution and are happy with this trade and the result, but in reality most of the work was just waiting and holding on to a position. Then we realize that it was actually all about the setup and that the execution doesn't even matter much.
evertonian
Posts: 81
Joined: Thu Apr 16, 2009 10:34 am

An excellent post Kai. Thanks for taking the time to post that. Can't add much to the technical side that you've already talked about. I would also add that succesful trading is about managing risk. Different markets exhibit different characteristics, so knowing how a market is likely to react based on how the same type of market ( race type, number of runners, price of fav, 2nd fav, 3rd etc ) allows you to frame your gain and risk.

Always think that if you feel that the market is bottoming out ask yourself why, have other horses reached value points, has the horse been steaming in throughout the morning, is there solid resistance in the market. Trading highs and lows is probably one of the most difficult skills to master as it relies so much on what other horses in the market are doing, but you can frame your risk nicely on these markets. As a trader you should know where you're going to exit if the trade goes wrong before you enter your trade, also to be honest you should have some kind of idea of where you're going to exit if you have a profitable trade too. Knowing how markets have reacted in the past gives you an idea of this.
eightbo
Posts: 2154
Joined: Sun May 17, 2015 8:19 pm
Location: Malta / Australia

Damn Kai you managed a longer post than me how's that even possible. Busy tonight but look forward to digesting it tomorrow.
eightbo
Posts: 2154
Joined: Sun May 17, 2015 8:19 pm
Location: Malta / Australia

Kai wrote:
Mon Sep 02, 2019 3:38 pm
I think you're already working smart by utilizing this forum in the first place, from opening yourself up to criticism while seeking encouragement and motivation to promising an update on your progress which will no doubt guarantee that genuine effort will be made.
Thanks. Accountability helps a bit but I'm doing daily reviews anyway so it'll be fairly easy for me to dump everything to an imgur album later in the month. I've found it's very beneficial to be an open book, less stressful and you'll form more meaningful connections w/ people.

Kai wrote:
Mon Sep 02, 2019 3:38 pm
At least without a gambling background we don't have too many bad habits to get rid of which is always a plus.
I stumbled onto trading through gambling so I had a healthy portion of unlearning to do but I think once you've done so it gives you additional insight into the other participants who are out there and how they think which I've found useful.


Kai wrote:
Mon Sep 02, 2019 3:38 pm
However, I think it's important to stay humble and grounded, if we try and be too clever it can have an adverse effect as well, there's diminishing returns hiding everywhere.
...
I'm at that stage of my life where I try to keep myself out of arguments, even if you tell me that 2+2=5 you're absolutely correct, have a great day :)
Yeah arguments aren't really worth the effort. People will always have differing views and it's important not to judge them as they're no less important than ourselves, no matter how "right" we think we are it's all pretty irrelevant in the grand scheme of things.
Any time spent in any type of conversation should have some aspect of value to it. A stimulating discussion based on logic leading to new knowledge can be useful if both parties are open-minded and a conversation with your mate can be done for the enjoyment but I see no value in continuing in a conversation when someone starts defending their points out of vulnerability/insecurity.


Kai wrote:
Mon Sep 02, 2019 3:38 pm
I am a big believer in networking and sharing of experiences, I think it benefits everyone and helps push everyone to become better.
+1. We're humans. We learn most effectively together. Imagine your limited knowledge if you were born and left in a forest where you grew up with no human contact until age 20.


Kai wrote:
Mon Sep 02, 2019 3:38 pm
Might as well make a short list off the top of my head of some of the biggest realizations that I've had, I guess in the context of racing markets since people are mostly interested in those markets, even though I do prefer other markets. You've talked about the mental side of things so I can put a bit of focus on the technical side of things, maybe somebody finds it useful, you never know.
👍🏻 Thanks for sharing your list. I'd add that realisations need to be EXPERIENCED by people as well. Sort of like if you told a toddler not to touch the frying pan because it'll burn their hand. You've told them and they might even think they understood it but they'd never really get it until they've done it themselves. I think it's important for traders to allocate a bit of time to really think about things and just have a pen and paper handy, that's where most of the magic happens in terms of shifting your mindset.


Kai wrote:
Mon Sep 02, 2019 3:38 pm
I agree with you that everyone can improve way past their current ability, even the best traders, there are levels of trading that seem almost impossible to reach, that's the challenge for everyone I guess :)
...
Meanwhile, most of our trading just feels one-dimensional and far from efficient, it's still considered good but you can't help but feel there is still untapped potential here.
Whilst there's always another level, I think it makes the most sense for people to aim very high, yet fall just short of their potential. Much more enjoyable in terms of quality of life. For example let's imagine we've completely maxed out our trading ability, in theory we could then get our body and mind into peak physical condition to produce better quality decision-making but at some point the trade off becomes not worth it anymore. I mean what if you really like pizza?
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mcgoo
Posts: 898
Joined: Thu Jul 18, 2013 12:30 pm

Some real nuggets here , thank you.
I recently posted about giving up. It was a bad day. It has been years and years of trying but your posts made me think ..a lot. I started to think back. I will try not to digress too much: (there is a relevant point :D )
I have overcome a terrible speech impediment and despite it lived and worked successfully in 3 countries, married a beautiful genius of a woman and am raising a whip smart gorgeous daughter-who has (fluent) verbal diarrhoea :D . It was a 25 year fight but I overcame and live gratefully talking & smiling (almost every day :D ). Your posts reminded of these things and that I am trying to do something better than the 95%-without going to a class 3 to 4 times a week under a master's tutelage. I am lucky enough to have trained with a real Aikido master for about 10 years or so and have learnt about ....among many more insights..Spirit, about welcoming it when it comes and letting it go when it leaves. I have learnt about how the body can't be sick without the mind..rejected that and then came to believe it when he helped me recover completely from my crippling arthritis. I work out like a mad old man at the gym now :lol: -something I was told would be impossible for me. Your posts reminded me of these things because you talk about insights that I have sensed in a way but not realised. Mori Sensei first teaches us basic joint locks, which are painful and hard to execute. You try on the bigger guys and they smile kindly and correct you. 3 years later you think you are getting it and Sensei shows you something you have missed all along and suddenly you have that flash of insight and the 6'5 guy is easier to move. 2 weeks later you see something else and nearly forget it all until he firmly puts your hips back in alignment and the realisation is cemented..then you start all over again as you realise it is all in the hips, knees and feet and it was never all in the joint lock. Sensei can execute the joint lock at a touch..you punch, he blocks, your joints lock :shock:.. without him doing anything other than touching you with his wrist (It sounds like rock and roll but I assure you it is real). It is joyous and feels like magic. This, I think, is how the master trader executes..nearly without thought... because 'he' got the basics right over and over and then trained/practised hard, had those insight flashes..and then it became like muscle memory and then went beyond that. Like with Aikido..I will probably never get there but what a joy it is to try.How lucky we are! I will try use my spirit to keep going.Thanks again gents...there is mastery on this forum.
I hope that wasn't all too esoteric but you really made me think. All the best :)
eightbo
Posts: 2154
Joined: Sun May 17, 2015 8:19 pm
Location: Malta / Australia

Beautiful analogy. I'm having flashbacks to being chased around the lounge with a Jo staff.

The low points in life really give context to the high times. They're part of the same journey and it's important to remember that if you find yourself at the summit looking back down the mountain.
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Kai
Posts: 6092
Joined: Tue Jan 20, 2015 12:21 pm

mcgoo wrote:
Wed Sep 04, 2019 2:11 am
I have overcome a terrible speech impediment and despite it lived and worked successfully in 3 countries, married a beautiful genius of a woman and am raising a whip smart gorgeous daughter-who has (fluent) verbal diarrhoea :D . It was a 25 year fight but I overcame and live gratefully talking & smiling (almost every day :D ). Your posts reminded of these things and that I am trying to do something better than the 95%-without going to a class 3 to 4 times a week under a master's tutelage.
Thank you for sharing such a personal story and for the Aikido analogy, really appreciate the kind words. Can only speak for myself but it's not really our place to educate others, best to leave that to the traders that run courses and such, because it is literally their job to educate their students. For me it's all about sharing opinions and experiences for the primary purpose of improving my own self, a few others may benefit from it along the way and that's great, so I don't see any real downside to it. Some say that altruism is the best source of happiness while others say it's the root of all wickedness, doesn't really matter what I think, I just know what works for me and what doesn't. Plenty of people have ulterior motives for posting on the forum, some want to promote services or blogs, some simply want credit or want to belong, I just post simply because I enjoy it (same reason why I do most things as strange as that sounds), even though I prefer to work from the shadows I do sometimes enjoy interacting with other traders and discussing various aspects of trading, there aren't many in my region that care about things beyond their narrow specialty. When/if I stop enjoying it or if becomes a big time sink then I will stop posting, but I also see it as a personal challenge and I like to test myself like I often do, to try and express myself to the best of my ability in a foreign language, to see if I'd be able to survive and thrive if I moved to an English-speaking country.

If more people shared their stories and experiences less people would struggle, that's more of a fact than an opinion. But people fear being proven wrong so they'll play it safe and not get too involved, but what is there to fear really? If you offer an opinion what is the worst thing that can happen? That someone as experienced as Peter swoops in and says something along the lines of "you blasted idiot, you've got it all wrong, you should do this instead". If someone points out obvious flaws and offers an alternative opinion and thus giving you an opportunity to learn something new, isn't that actually the best thing that can happen? That is why I have no real fear of being wrong, the only real downside is that your ego may get a bit bruised in the process but the upside is limitless so that makes it a no-brainer for me. I don't like speculating and theorycrafting and can only really offer an opinion on something that I'm pretty sure that I'm familiar with, but I accept that I can easily be wrong about something, and if someone makes a great point and proves me wrong I can only be grateful for that because he probably saved me a lot of time and money, why would I resent him for helping me if it would otherwise take me 6 months or 2 years to naturally come to that conclusion.

Whatever ego I have I sort of tuck it away in a safe place (for future use maybe) after realizing that it does me more harm than good, soon as it starts rearing its ugly head I usually get humbled by the market, it has happened far too many times to count, so naturally I had to adjust my mentality and approach. I've since accepted the fact that the market will always be right and that I will only sometimes be right, and as long as it doesn't impede my confidence I'm perfectly fine with that. I feel that if you unburden yourself of your ego and stop trying to impress others and not worry about what they think then you may actually experience true freedom to first do as you please and enjoy your life, and second to remove the biggest obstacles that will prevent you from fulfilling your potential. If you rub someone the wrong way it's probably their problem and not yours, if someone is projecting their own insecurities onto you or something it makes no sense to let that bother you and force you to adjust your behavior or quit the forum, you should just be yourself. If someone hates you for no reason then maybe consider giving that mother***** a reason :mrgreen: I'm just kidding, but there is not a single successful person out there that does not have haters of some sort, it comes with the territory so there's no need to overreact to forum spats like I've seen fellow forumites do. I find it amusing that even top traders on social media get triggered by random troll comments, I really have no idea why a wolf would concern himself with the opinions of sheep.

By the way, it's worth mentioning that there seems to be a hidden benefit when you're teaching/mentoring someone, at least that's what I've concluded based on my experience whilst mentoring a couple of my closest friends from scratch. Sounds counter-intuitive but I feel that a teacher can have a good amount of benefit as well just like the student, because when you're trying to quantify something and explain it in detail to a newbie you really need to understand it at a deeper level first, so if there are missing pieces you will fill those missing pieces so that you are able to quantify it for your student. And by explaining these things to your "student" you're basically explaining them to yourself as well, you're teaching yourself on the fly as well. Difficult to explain, but if you have a very close friend or a family member that is interested in trading and if you started teaching him and transferring some your knowledge and experience I think you would would be surprised as to how much benefit there actually is from that, for you as well. Worth mentioning that I do have such a friend that I've known most of my life and we have zero trading secrets between us, for lack of a better word he is my trading partner most of the time, we don't trade together but from the start we've bounced ideas off one another and spurred each other to keep going, it has no doubt accelerated our progress. I was alone at the very start but once he decided to join the difference was night and day.
evertonian wrote:
Mon Sep 02, 2019 9:35 pm
I would also add that succesful trading is about managing risk. Different markets exhibit different characteristics, so knowing how a market is likely to react based on how the same type of market ( race type, number of runners, price of fav, 2nd fav, 3rd etc ) allows you to frame your gain and risk.
Absolutely agree, people don't have a habit of framing anything, let alone risk and reward ratios. Regarding the execution, whenever I'm involved in a market and managing a position I feel that at any given point in time there is a right move to do depending on circumstances, whether it's holding tight or quickly exiting, or lowering or increasing the position etc, and by analyzing my past trade execution I always strive to know what that right move is, mistakes will happen but once it seeps into your muscle memory then you'll just be trading on autopilot and you'll feel that you're trading the same few markets over and over again. Despite being aware of the right thing to do in a particular situation, sometimes I will consciously decide to take on a bit more risk if I am convinced that something is about to happen when I see something happening in the mind's eye, I know people like calling it their gut feeling or intuition but I think it's only because you've seen this happen so many times before, so anticipating it is just a reflex of that past experience, if that makes any sense. I believe that if something catches your eye in the first place, then there is probably a trade here somewhere, otherwise it wouldn't have caught your eye, after all our brain just keep scanning the market for trading opportunities and that's all it really does before we get involved.

In the context of prerace I definitely feel that adopting the mainstream swing trading style is the way to go, some say to find your own way but it certainly helps to think along the same lines as other traders, if you spot a clear-cut opportunity then chances are others have spotted it as well and you end up pushing the price in your desired direction. A bit idealistic but you get the point, it's no secret that some people try to use their influence to push their trades in the right directions, even Peter gives a few hints on Twitter about swing opportunities with plenty of time to jump on them, not saying that he actually needs the crowd to collectively push the price but the tweets offer huge insight into what type of setups to look for and what type of setups he feels confident enough to post about them. For example on football I have seen how an unders market looks like after Psychoff posted a goal alert for it, I've recorded some. To my great surprise on some of those smaller games I spotted a big trader trying to scalp the noise that all the big lay bets created when his followers desperately wanted to catch the goal at any price. Profiting from both the goal and all the scalps is nothing short of brilliant in my book :D
eightbo wrote:
Tue Sep 03, 2019 11:09 pm
Accountability helps a bit but I'm doing daily reviews anyway so it'll be fairly easy for me to dump everything to an imgur album later in the month. I've found it's very beneficial to be an open book, less stressful and you'll form more meaningful connections w/ people.
To be honest, before trading I had no idea just how powerful networking actually is, especially in this business where everyone likes to keep their business secrets close to their chest. Through networking alone I've gained a lot of insight into other markets that I've barely touched myself at the time, and even if I don't have any real interest in those markets that knowledge alone has helped reinforce my understanding of my own markets. I never really planned it but it really snowballed when a lot of people from my region started sharing everything with me, some even trying to unethically exchange private trading videos that they got from others for something more useful, so in the end I ended up gaining insight into how everyone in my region actually trades. I really do not deserve to be privy to this information at all because I've done no actual work to obtain it, it would literally take me years to learn these things myself, but I guess that is the power of networking and sharing information and opinions, if you yourself are open then it might just motivate others to open up as well. I may not have any real interest in their trading styles but it did help paint a bigger picture of the markets and what approaches actually work, and of course it gave me automation ideas that I could probably work on for a few years.

During my first year when a certain trader (doesn't matter who, it's just an example) showed off fantastic results I remember thinking "wow, if I only knew what his strategy was I could pull off those same results". Well, funnily enough through networking and purely by accident I did eventually find out what strategy this particular trader was using, only to realize that I do not posses the skill set required to mirror his results and to actually use this strategy, it would take considerable effort for me to get near his level of execution. And then I was left doubly disappointed, because it turned out that he wasn't technically a "trader" either, he was simply abusing a simple trick that he stumbled upon, a very simple approach that any normal trader wouldn't even think of trying because he would discard it on day one.

I found that remarkable and instead of insulting his knowledge I prefer to give him credit instead, it only proves that real genius is not in the complexity but in the simplicity like so many great minds around have already concluded. Meanwhile, people hoard knowledge and invest in more monitors thinking they need more information to make the necessary decisions, but in most cases they do not really need a 4th or 6th monitor to pull of a banger trade. From the start I've been obsessed with gaining knowledge and I have a natural thirst for it, I've always thought that knowledge was power like everyone says but I've found that knowledge is only potential power, it is absolutely useless if you don't use it. That's why I think there's a bunch of traders who already have enough knowledge, it's all about focus and ironing out what you already know, filtering out the bad and tunneling on the good, knowledge alone is not enough to trade, you need actual skills both mechanical on the ladder and mental to actually use some of that knowledge.

It wasn't always the case, but I genuinely believe that I am able to learn whatever trading style or sport I want to learn (probably even cricket :D), I don't see any real obstacles anymore, I have certain biases towards certain markets and I know that some markets suit me more than others, while some markets have a much better opportunity/time ratio than others. The self-awareness that you talked about earlier plays a key role here, you really need to be aware of your own skill set first and foremost, your strengths and weaknesses, and you need to be aware of the skills needed for any one particular trading style that you're trying to learn, because even though a lot of the same skills can be transferred over they can also vastly differ from market to market. For example, learning one skill that you're already somewhat familiar with could take as little as 1 week, while learning something completely new could take maybe 6 months or 1 year or much more. You can approximate all you want but once you start the process you need to adjust accordingly, based on the level of progress you're making, if you're truly working smart then it should only be a matter of time before you succeed. If you never give up it is near impossible to fail, sort of the trading equivalent of laying a price of 1.01, as unlikely as it seems that you get the payoff if you keep at it long enough it's only a matter of time before you hit the jackpot.

Meanwhile, a classic mistake that I see newbies regularly do is they try to learn how to trade prerace horses for example and after a very long time they give up on it and try football inplay, basically starting from scratch because almost none of the skills transfer over and they need to learn a whole new market on top of that, it's like in gaming when you've been playing for a while and then you start a new game from scratch and lose all the progress. Then after failing at football they try to get into tennis, which is a very unique market and again they practically start from scratch and so on. I even talked to some traders that used to have a good edge on a particular market (prerace mostly) and when they lost that one edge, instead of obtaining new edges on this market where they could at least utilize their vast experience on it they instead decided to switch to a different sport where they have zero experience and they have to start the whole newbie process again from scratch, to each his own but that to me is madness, the opposite of working smart if you will.
eightbo wrote:
Tue Sep 03, 2019 11:09 pm
I stumbled onto trading through gambling so I had a healthy portion of unlearning to do but I think once you've done so it gives you additional insight into the other participants who are out there and how they think which I've found useful.
That's a great point, probably forgot to mention that last time. This is a betting exchange after all, the psychology behind this market is what drives these prices around so much, being aware of that is invaluable, it is akin to getting inside the mind of the market because that is how "it" thinks, the market loves to squeeze every last tick out of value and even overreact, only to flip the table in an instant once the price goes too far. Sometimes I have an opinion on a market but the order flow completely murders that opinion and even calls me a dumbass on top of that (uncalled for :D), so if I opened a trade here based purely on opinion and speculation then I'd be making a loss. Maybe I will go with the order flow instead of going with my opinion but I won't feel as comfortable. However, when I form an opinion and the order flow actually shares that opinion and supports it, then it's game on. I forget the name of the video but Peter had a great order flow example recently where the price was being artificially held up, with a skill like reading the order flow you can never go hungry no matter how the markets change over time, it's a universal skill.
eightbo wrote:
Tue Sep 03, 2019 11:09 pm
👍🏻 Thanks for sharing your list. I'd add that realisations need to be EXPERIENCED by people as well. Sort of like if you told a toddler not to touch the frying pan because it'll burn their hand. You've told them and they might even think they understood it but they'd never really get it until they've done it themselves. I think it's important for traders to allocate a bit of time to really think about things and just have a pen and paper handy, that's where most of the magic happens in terms of shifting your mindset.
I fully agree, the sad thing is that before I actually got involved in all of the markets I read and re-read numerous blogs and articles and forum posts etc, I had an absolute overkill of advice but it only helped me to avoid the biggest and most obvious mistakes. In the end, I really had to experience everything for myself, it wasn't enough to just read something and absorb it right away, it's too abstract. So I'm aware of that, but these discussions may help those traders that are right on the cusp of these realizations, it may be just enough to push them over the line. Sometimes people feel that you need to be able to move mountains to get into profit but in reality you just need to have a very minor edge to nudge yourself gently into that profitable area. The reason why most of the top traders keep saying the same things is because they've reached the same conclusions, but nothing wrong with repeating something as there is an endless supply of newbies around that probably won't be digging up old posts. It's probably inappropriate to go into great details but what I did for prerace racing was directly compare the trading styles of Peter, Mugs and Caan, I've found that they differ quite a bit, especially Caan, but the things that they all had in common was the thing that interested me the most and the differences seemed less relevant.
eightbo wrote:
Tue Sep 03, 2019 11:09 pm
Whilst there's always another level, I think it makes the most sense for people to aim very high, yet fall just short of their potential. Much more enjoyable in terms of quality of life. For example let's imagine we've completely maxed out our trading ability, in theory we could then get our body and mind into peak physical condition to produce better quality decision-making but at some point the trade off becomes not worth it anymore. I mean what if you really like pizza?
Now you're speaking my language :) Aim for the stars and who cares if you only reach the sky and get stuck on a comfy Cloud 9 somewhere, just don't get too comfy and sink through it because the fall may be extremely painful :mrgreen:
stueytrader
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eightbo wrote:
Sun Sep 01, 2019 10:46 pm
I was actively working on my discipline, so I thought I'm improving... right?! And I was. A little. That's the painful thing about it. But my results vs. effort ratio was garbage. By not having an awareness of this concept my growth was massively hindered. I thought maybe I just needed more time, I just needed to become a bit more disciplined. You all know the saying "If it ain't broke, don't fix it.". I'd like to challenge that idea today and say that's an inefficient way to look at things. Instead, I propose we stay hungry for more. That we probe and tweak into the unknown. That we challenge what we think we know and believe there is a new way, a better way - if only we'd look.
A lot of great posts in this thread, but I thought I'd like to comment on this specific section above. One thing I have found true over the years is that improving discipline in one aspect does not always do so in another.

This relates to a finding I once read - wisdom in people is not uniform. A person can be seen to be incredibly wise in one area of life, or activity, and incredibly dumb in a different area!

This may explain why trying to exercise your discipline in other activity was less productive for trading in returns? In the past I have been simultaneously perfectly well disciplined in some of my employed work, while behaving like a ragged gambler in discipline terms in the betting markets. I was a wise man and a fool across different areas. I've balanced a lot more recently, just working on getting to a reasonable level of psychology for all activities in my life...it's always a work in progress though.
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Kai
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It's probably been posted many times but I agree with the concept of "Four stages of competence", which is basically just 4 stages of learning anything. I sometimes find it very beneficial to break down any skill into smaller parts to work on each one individually but these self-explanatory images are the basic concept behind it.

Image

Perhaps this chart below is a better illustration of the concept. That is why I genuinely believe that with the right approach anyone can learn any skill, but the first step is always to become aware of it in the first place, age is just a number and is more or less irrelevant imho. Knowing where you are and knowing the exact process needed to get to the next level makes everything much easier, at that point it should just be about the level of effort needed to get there.

Image
stueytrader
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Nice chart Kai.

I'm guessing that complacency arrow could arrive at any point there also, even at lower levels.
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Kai
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stueytrader wrote:
Wed Sep 11, 2019 11:40 am
Nice chart Kai.

I'm guessing that complacency arrow could arrive at any point there also, even at lower levels.
If one could be somewhat successful at lower levels then sure, I guess. I think success breeds complacency by default, it can spread like wildfire inside a comfort zone, not sure anyone can really be immune to at least some level of complacency, there aren't many true perfectionists around even many like to call themselves that. When the question of "will I make a profit here" becomes more a question of "how much profit will I make here" I think you're already getting complacent :mrgreen:

But I think that's very normal and very human, we all want a break at some point otherwise all of the hard work would probably be pointless. I love psychology and it seems like a fascinating and endless topic, haven't really looked into it too much but I guess complacency is present in all walks of life, you see England getting complacent last night after 5-1 at halftime or you see people start gaining weight and stop caring much about their appearance after getting married :D
eightbo
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stueytrader wrote:
Tue Sep 10, 2019 2:31 pm
eightbo wrote:
Sun Sep 01, 2019 10:46 pm
I was actively working on my discipline, so I thought I'm improving... right?! And I was. A little. That's the painful thing about it. But my results vs. effort ratio was garbage. By not having an awareness of this concept my growth was massively hindered. I thought maybe I just needed more time, I just needed to become a bit more disciplined. You all know the saying "If it ain't broke, don't fix it.". I'd like to challenge that idea today and say that's an inefficient way to look at things. Instead, I propose we stay hungry for more. That we probe and tweak into the unknown. That we challenge what we think we know and believe there is a new way, a better way - if only we'd look.
A lot of great posts in this thread, but I thought I'd like to comment on this specific section above. One thing I have found true over the years is that improving discipline in one aspect does not always do so in another.

This relates to a finding I once read - wisdom in people is not uniform. A person can be seen to be incredibly wise in one area of life, or activity, and incredibly dumb in a different area!

This may explain why trying to exercise your discipline in other activity was less productive for trading in returns? In the past I have been simultaneously perfectly well disciplined in some of my employed work, while behaving like a ragged gambler in discipline terms in the betting markets. I was a wise man and a fool across different areas. I've balanced a lot more recently, just working on getting to a reasonable level of psychology for all activities in my life...it's always a work in progress though.
It's easy to mistake the things which appear next to each other at ground-level as being closely related. I think the reality of the situation is that concepts which can often look neatly arranged / categorised are actually REALLY MESSY below ground — tying to all sorts of differing beliefs and expectations which we hold at a subconscious level and that we really don't have an easy way of accessing. Once we realise this disparity (as it sounds like you have), we still can't necessarily identify what's going on down there right away, but just by opening ourselves up to the idea that those concepts could be rooted in a whole manner of seemingly unrelated things, we're then able to begin the process of narrowing in on the true source, rather than working within a framework of incorrect assumptions that we didn't even know we were making.

This ties in nicely to Kai's mentioning of the 4 competencies framework. It's funny you should mention that actually Kai as going from conscious competence to unconscious competence is what I'm focusing on right now in my trading. In fact just last night I watched this presentation titled "Becoming an unconscious competent trader". Personally I didn't find a crazy amount of value in this one but it was useful as an aid to brainstorm off. I mention it because it presents this idea of a fifth stage of competency: 'Reflective Competence' — something you can research if you're into that sort of thing:
◘.png

Even in my notes from yesterday, I commented on how I felt I was in the Conscious Competence stage in my trading ("Learned" Section) and I'm quite happy with that. It's been a long and bumpy road up to this point. It's not quite been a month yet but here's a sneak preview of what I'll be releasing for anyone interested in my trading: https://i.imgur.com/sEYPiok.png
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Kai
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eightbo wrote:
Wed Sep 11, 2019 12:41 pm
This ties in nicely to Kai's mentioning of the 4 competencies framework. It's funny you should mention that actually Kai as going from conscious competence to unconscious competence is what I'm focusing on right now in my trading. In fact just last night I watched this presentation titled "Becoming an unconscious competent trader". Personally I didn't find a crazy amount of value in this one but it was useful as an aid to brainstorm off. I mention it because it presents this idea of a fifth stage of competency: 'Reflective Competence' — something you can research if you're into that sort of thing:
◘.png
Don't think I've heard of reflective competence yet, looks interesting and it does makes sense, thanks for sharing that. I think the stages get progressively harder, but at the same time if you go through this process more than once then I think it gets progressively easier, because you're basically repeating more or less the same process and you also get progressively more confident that you can do it again.
eightbo wrote:
Wed Sep 11, 2019 12:41 pm
Even in my notes from yesterday, I commented on how I felt I was in the Conscious Competence stage in my trading ("Learned" Section) and I'm quite happy with that. It's been a long and bumpy road up to this point. It's not quite been a month yet but here's a sneak preview of what I'll be releasing for anyone interested in my trading: https://i.imgur.com/sEYPiok.png
I am not easily impressed but that is an impressive level of detail, you're much more meticulous than I am :D Not looking to add any pressure but I really don't see how anyone can fail with this type of approach, if they truly persist that is. In your case it certainly won't be for lack of effort.

If someone is struggling to understand what "stage" they're actually in, it may help to look at their trading results as a rough guideline. For example, if you barely make a profit at the end of the day but you feel like you've performed well and pulled off some fantastic trades during the day, then that suggests that there is probably a lot more work to be done. Likewise, if you end the day with a good result despite butchering all of the best opportunities or completely missing out on them, then you very well may be performing at a very high level already, if even your sub-optimal performance is already good enough to make the losing days highly unlikely to occur. This is where everyone wants to be ideally, producing good results for very little actual effort, whilst getting rewarded when they knock one out of the park when at their peak performance.
stueytrader
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eightbo wrote:
Wed Sep 11, 2019 12:41 pm
It's easy to mistake the things which appear next to each other at ground-level as being closely related. I think the reality of the situation is that concepts which can often look neatly arranged / categorised are actually REALLY MESSY below ground — tying to all sorts of differing beliefs and expectations which we hold at a subconscious level and that we really don't have an easy way of accessing. Once we realise this disparity (as it sounds like you have), we still can't necessarily identify what's going on down there right away, but just by opening ourselves up to the idea that those concepts could be rooted in a whole manner of seemingly unrelated things, we're then able to begin the process of narrowing in on the true source, rather than working within a framework of incorrect assumptions that we didn't even know we were making.
I think that's very true, and key too. Like many traders I have often floated along in my development thinking in general terms like 'I must work on my planning/research/discipline' etc etc...

A lot of this was vagary, and little help to me really. I needed to actually tease apart a lot of detail about how I was functioning in my trading specifically, rather than congratulate myself about feeling generally well focused (which included many other activities than trading) as a person.

Like you suggest, I used to conflate achieving such general things as a well organised day (including all my other commitments) with being well enough focused and aligned to do well at trading specifically.

Just to confuse this slightly more though (sorry), there is also a higher level of function though that does conflate more general function with specific trading function - that is how trading fits with your other aspects of life (work, social, financial). So, the interlinking can't be entirely ignored either.
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