Thread by @AlphaMind101

A ‘Friday’ thread for traders looking to grow, develop, improve.

I‘m often asked what’s the most important skill of trading to learn?

Is it method, approach, analysis , mindset, risk attitude, Money Management, emotional resilience, etc?

The question itself is wrong?

1/15

No one of them is more or less important than any other. They are all equally important.

If you can become strong in all areas, you develop a massive edge, if you‘re weak in one, you massively handicap yourself.

Imagine you‘re strong in all those areas, but say weak in
2/15

Money Management.

Basically if you are weak on Money Management, unless you can develop that side of your game, you will never succeed.

The same is true of all the other attributes.

I’ll share an example from my own trading career.

I was very strong on analysis.

3/15

Over many years I had become excellent at identifying high-reward/low-risk strategies. My last boss called me an alchemist. This, along with strengths in other areas enabled me to develop as a competent trader. But, I also had too many periods of under-performance which 4/15

impacted my confidence. I had some periods of brilliance but also setbacks & periods of mediocracy.

After 13 years as a trader I started working with a coach. At that point I’d held senior roles on the proprietary trading desk at Credit Suisse & Commerzbank in London 5/15

After working with the coach in the year 2000, I’d had a chance to reflect on my work- How I worked, how I brought the best of myself to my work, what aspects undermined me. - This was deep work that went well below the surface. It was apparent there were disproportionate

6/15

areas of strength & weakness. My execution was good enough to be adequate, but not good enough to consistently excel. Going deeper there were issues with my risk attitudes & other factors related to position sizing, coping with uncertainty, etc. It’s rarely just one thing. 7/15

I worked on developing these over the next couple of years, with the help of the coach. It didn’t happen overnight. - Meaningful transformation doesn’t work like that. - But things started to turn for the better. The latter years of my trading career were by far my best. 8/15

The point of this is to highlight that it is never one thing, it‘s many things & they‘re all equally important. They‘re all potentially edges.

On their own they may be minor edges, but together compound & become a huge edge. But, if you are weak in 1 or 2 areas, they

9/15

become negative edges that cancel out the positive edges & all the good work you do.

Not all these aspects are tangible. The tangible aspects are easy to learn. But many aspects are intangible. Mindset, atttirude to risk & uncertainty, emotional resilience, etc.

10/15

Naturally traders will work on the ‘tangible’ areas at first. Analysis, method, system, etc. But if you aren’t or don’t work on the others areas, the less tangible aspects, you are not learning the full job.

The world of sport provides great analogies. 11/15

Sport is littered with incredibly talented athletes who had the physical skills, attributes and potential to succeed,but never developed or worked on the mental skills to translate that to high performance on the big stage. They didn’t go the ‘extra mile’. 12/15

James Surowiecki tells the story of NBA great Kermit Washington who nearly never made it. It‘s a great article that can be seen here. google.co.uk/amp/s/www.newy…

You won’t succeed at trading if you‘re just good or talented but not prepared to go that ‘Extra Mile’ to suffer.

13/15

It is no good learning 70 or 80% of the job, you need to learn the whole job.

You don’t need to be a 10/10 on all aspects of trading, that’s rare, but you cannot be a 2 or 3 out of 10 on any of it. That will hold you back.

Less than 1% of all retail traders are able

14/15

to carve out a sustained career in trading. To get into that select group you need to work at it, you need to go the ‘extra mile’.

If you want to hear more about my own journey. I discuss it In the AlphaMind podcast here. podcasts.apple.com/gb/podcast/alp…

Best of luck. Steve 15/15