What Distinguishes Professionals From Amateurs

Chart, Trading, Courses, Forex, Analysis

I see some traders tackle markets for years and never achieve even basic competence. Then I work with others that achieve unusual success in their first years. What makes the difference?  Yes, work ethic and skill/talent sets matter quite a bit, but what increasingly hits me between the eyes is the difference in the learning process between amateurs and developing pros. Here are two of those differences that make a difference:

Professionals keep score 

Can you imagine a weightlifter who doesn't track how much they're lifting, how many reps they're doing, which muscle groups they're working, how much body mass they're adding? Conversely, consider the golfer who uses sensors and apps to track their golf swings, identifying details of what they're doing right and wrong on various courses and holes. Pro basketball teams review game film in agonizing detail; amateurs leave the game behind once they leave the court. In trading, we can easily keep score, with performance stats ranging from how much heat we take on a trade to how much we make and lose for various types of trades. What amazes me is that, when traders keep score, they learn about strengths and weaknesses in ways that they do not when they just review their weekly or monthly P/L. As I recently shared in my article on building your personal process, I have been using the Fitbit Sense and MuseS units to track my sleep, exercise, stress levels, focus, and much more. To my surprise, I might think that I'm calm and focused, but all the data sometimes tell me otherwise. By constructing daily exercises and keeping score, I'm getting better and better at my own trading psychology. If a psychologist needs to keep score to improve mindset, the odds are pretty good that most of us could benefit. 

A couple of tools for tracking performance and keeping score are TraderVue and Edgewonk. What I find with the successful developing SMB traders is that how they use such tools makes all the difference. When the score keeping leads to small, steady, consistent improvements in trading, the result is an amazing improvement in trading consistency. Once that consistency is achieved, sizing can be increased without undue downside exposure. The traders that simply track P/L and state global goals ("I need to eliminate my overtrading") simply do not make the detailed improvements that lead to consistency.

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