The Art of Trading, What Does it Take?

The other day, a friend told me I needed to get out of the kampung to experience some big-city “fun,” so we went to an art exhibition to see the paintings of a local artist who has become quite successful. Yes, it has taken him many years to achieve his status as that of a “master,” but he has earned his success by painting, painting, and painting more. I enjoyed his works even though I'm not much of an artist myself, but, as usual, the whole endeavor turned my mind to trading, and for some inexplicable reason, the twists and turns of my thinking brought me to what I am about to to share you …

Becoming a master at anything requires years of training, which can be formal or not. Regardless, what has to occur is a two-fold process.

First, one has to learn the mechanics (technique) of what he or she is doing. In painting, the technique is all about strokes, color, light, perspective, and effect. In trading, technique is all about the trade, how to find it and execute it. Many people can learn technique of a “thing,” but less learn how to move from technique to mastering the art of whatever that thing is.

The second step in becoming a master is more subtle and almost indescribable, as it takes us to a place beyond the practicality of process; it takes us to a place in the mind.

To become a master painter, one has to, over time, incorporate the subtleties of technique into his or her unconscious mind. One has to flow and meld with the painting. This means when painting, an artist “knows” just how long to make a stroke, just how much color to add to a scene, just how much light or darkness will create a mood, and just how deep or wide to make the perspective for the intended effect.

This ability only comes with time, knowledge, and experience.

The same is true for a trader. One can readily learn the technique (mechanics) of trading, but to become consistently successful, time, experience, and knowledge have to come into play. One has to learn the subtleties of overall market movement, the reality of economic global flow, the effect of news and analysis on markets, and relationships between markets that can and do effect movement (intermarket analysis).

Once learned, second nature takes hold, and many of the decisions made are made without conscious knowledge.

This, then, becomes intuition, a sense of what will or should happen producing an “unvoiced” decision based on “feel’. This sense is the same one that produces master painters. This implies that one important aspect of successful trading is artful.

I believe the true masters of trading markets practice their “trade” with far more than just mechanics and knowledge. In their years of experience, they have mastered the mechanics of trading, but more importantly, their years of experience have incorporated into their minds, a sense of the markets and all of the surrounding influences upon those markets.

Their years of trading have created an intuitive understanding that affects their decisions whether they know it or not. This is the reason why it is difficult for those who follow these masters to duplicate their success.

In the end, one can try to copy the “style” of a master, but the outcome will surely be less than what the original is. No, the pure fact is that to become a master anything, including trading, one has to do that thing over and over again, always focusing on eliminating “errors,” always repeating the things that worked, always trying new things to improve, and, most importantly, always learning everything one can learn about whatever that particular medium is. In trading, the latter is, arguably, one of the most important …

HAPPY TRADING

Regards,

ZL