Recognition — Part 2

Craving Mistakes

For me, the psychological gap between “I want to make money” and “I want to be a good trader” was nothing compared to the gap between “I want to be a good trader” and “I want to go through the struggle that is required to get there”. And more importantly, the difference in progress I was able to realize because of this mental shift was instantly noticeable.

Your “first act” of trading, if you’re like most, probably looks something like this so far: You got involved when the market was hot because it seemed easy, you made some money, then the market did something you weren’t expecting and you lost a lot.

Going through this makes you realize that focusing on making money doesn’t give you a real way in, or more importantly, a way out. So you move to: “I need to be a better trader instead of expecting an easy way to make money”, and while this is a logical next step, I needed to take it one further.

I thought that I could learn trading passively, like moving to a new country and learning a second language, where if I just surrounded myself with it, I would eventually start to pick it up and over time become competent. And you may passively learn how to order a cup of coffee or call for a cab, but the difference between that and romancing a woman in her native tongue are worlds apart.

While execution itself does not always end up being precise, your approach to it must be. What is my plan, what is it based on, and what would invalidate the idea besides price alone? Why am I buying or selling here and now? How quickly will I know if I’m wrong? These are not trivial questions. This issue tends to manifest most obviously in the form of taking setups without clearly defined context or triggers, something I am all too familiar with. It seems easy, you learn a new setup, you see price doing some version of it, and you take a trade merely based on location or structure alone. What inevitably follows is one of two outcomes, you were wrong and you got stopped out, or you were right, but you were early so you got squeezed out and then you watched the trade that you initially wanted, play out without you. Everyone has gone through this. The same way every man has felt the embarrassment of being unexpectedly turned down by a woman they thought may have been interested in them because they saw a repeated behavior, but they weren’t able to read the person that was in front of them. They tried to force it without realizing they were forcing it.

This is the gap I had to cross recently. Recognizing that improvement will not come by happenstance, but by dedicating attention to not just what my mistakes are, but where they come from, and why I keep repeating them.

All of this to say, you cannot just be “willing” to go through the struggle to get the reward that you assume is on the other side. You must actively pursue that struggle.

You need to crave mistakes so that you have information to dissect and learn from. You must become obsessed with every part of your process.

The result of this obsession will not only lead to a clearer path, it will shorten it. At first my weekly reviews felt like sifting through the mud, but as I started to build a more detailed structure of the ideas I was putting together the flaws and the strengths became much more readily apparent. Results started feeling less random, and I was I able to start pinpointing where the issues were stemming from as well as where my strengths truly laid. I went from having “some good days and some bad days” to finding opportunity for improvement within every movement and decision. At first, this amount of information felt overwhelming, but at the same time, it opened my eyes to the real potential for progress that awaited me.