Friday, June 05, 2015

The Art of Learning to Trade: Become a Master and Not A Jeopardy Contestant


I rarely read trading books. Experience tells me most are a waste of time. However, I read every performance book I can get my hands on. One of the best is Josh Waitzkin's The Art of Learning.

Josh was the chess prodigy that the movie "Searching For Bobby Fischer" was based upon. Not only was he one of the best American Chess players ever, he also made himself into a martial arts world champion. How did he become a champion in two very different fields? Simply put, Josh's talent is understanding the art of learning.

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Josh believes in acquiring a deep understanding of a discipline, and points out that few actually undertake the time and effort to gain mastery. For instance, he points to most American Kung Fu classes that teach students a plethora of average techniques at a superficial level, never actually mastering anything.

To gain mastery, one must take a technique or strategy, break it into parts, and study each part in depth. For example, Waitzkin spent thousands of hours studying the relationship between two chess pieces, king to pawn. He focused on nothing else. This gave him a keen understanding of these two pieces, their relationship on the board and the subtleties of each piece. Once he gained mastery, he moved on to another relationship. In time, these parts that he studied would come together and the whole was mastered.

It is not difficult to see how this learning technique applies to traders. I can't even count how many bad traders I have run into that are encyclopedia's of every setup and candle pattern known to man. On a superficial level, they seem to be geniuses. Yet somehow they are bad traders. It is because they know a lot at a superficial level, but do not truly understand what they have memorized.

So "trivia trader" can name every bearish topping candle pattern. As I type, I could only name one or two. However, while their names escape me, I understand the psychology behind why they are bearish, can recognize them on different time frames as they develop and know how to trade them. I choose mastery over the superficial.

When I work with students, some become frustrated because they want that toolbox of 20 setups right now. I could easily give them what they want, but who does that really serve? Instead, I spend many sessions going over the intricacies of that one setup before moving on. The process can be tedious and frustrating, but in time the student gains mastery of the setup. Then we can move on.

If you are serious about trading, work hard to learn everything you can . . .about that ONE thing. Then over on to the next. Master a few things. In time, those few things will become many and the "whole" will follow.

Put it into action right now! What is the one things you plan to master? Let me know in the comments below or by email and I will get back to you with an idea of how to go about doing it.

If you would like to learn more about how I trade, receive my nightly focus list with market analysis,setups and trade alerts, sign up for a 14 day free trial at BullsonWallStreet.com.  


14 comments:

Miles Williams said...

Fear not the man who has practiced 10,000 kicks but the man who has practiced 1 kick 10,000 times.
-Bruce Lee-

One of my favorite quote that this post reminded me of.
Cheers,
Miles Williams

Jose Argueta said...

I really like the Earnings breakout pullback, trend pullback (I play these in weak bull markets like the one we are in now), flag breakouts (strong bull markets) and trend reversals (play these in range bound markets).

This is my small basket of setups that I am starting to master depending on the market that we are in.

Any comments or suggestions on this approach?

Paul Singh said...

I love that one! I'm a big Bruce Lee fan.

Paul Singh said...

Scan for these setups everyday and paper trade them. Study your results and figure out what works and what doesnt. Also study past momo stocks and see how they reacted to these setups. Do this everyday for an hour for 6 months. You'll be surprised at what you will learn.

Greg Szacilo said...

If you had to start all over, what set up would you master first?

Paul Singh said...

A breakout related setup.

Anonymous said...

I try to learn the Noble art of Trading, by learning and studying the best i can.
Got a study advise for me?
And Trading is a job, it is just like work.

Gr. Erik 🇳🇱

antonius said...

I trade one index,and on that index i Base the trade on the high and low of the previois Day. I go long if the current Day breaks above yesterday's high, and short when it breaks under. The trade is finding the right stop and the right target. The perfect trade that i am looking forum is when the index blasts through yesterday's high or low without pullback. The rest is essentially damage control.

James Harris said...

Sort of like a quote my father told me. "A man that wants a bunch of guns is usually not as much of a threat as the man who only wants one"

James Harris said...

Sort of like a quote my father told me. "A man that wants a bunch of guns is usually not as much of a threat as the man who only wants one"

James Harris said...

I want to learn the ends and outs of breakout pull back entries. If I'm saying that correct. I'm only 4 months into trading/learning . So my cup is empty.So I'm not sure that's something that I need to learn. Because I'm starting to see that swing trading is
Probably a better fit for me.If not maybe some advice where to start with swinging trading.

James Harris said...

I want to learn the ends and outs of breakout pull back entries. If I'm saying that correct. I'm only 4 months into trading/learning . So my cup is empty.So I'm not sure that's something that I need to learn. Because I'm starting to see that swing trading is
Probably a better fit for me.If not maybe some advice where to start with swinging trading.

Tony M. said...

"The mind is like a parachute. It only functions when it is open".
My problem Paul is that I am way to interested in everything so it is way to hard to function on just one technique.... Stock trading A.D.D...Lol

Tony M. said...

"The mind is like a parachute. It only functions when it is open".
My problem Paul is that I am way to interested in everything so it is way to hard to function on just one technique.... Stock trading A.D.D...Lol