Most are amateurs, some are professionals, and few are masters. Where are you now, and where are you headed? The choice is in your hands.
Using the Pareto Principle as a basis for this calculation since it has been proven to be valid in countless studies for the majority of the participants in sports, business, and the professions, the 80% and greater are really what we would classify as amateurs.
The remaining 20% (or less) have potentially earned the right to be called professional.
NOTE: The term professional as used here is in reference to mindset and performance—not a trading industry designation.
And, going one level deeper, 20% of the 20% of the professionals is 4% of the total who are potentially trading masters.
It’s ALL a Matter of Choice: Amateur, Professional, or Master
To make sure we are continually ‘raise the bar’ on our offering’s value for discretionary traders, we consistently interview a number of clients, subscribers, prospective clients and subscribers, and strategic partners literally every week. This feedback helps us learn more as to how best to support them achieve their target results.
Beyond those interviews we also increase our understanding of what can potentially benefit them in continually ‘raising the bar’ on their performance.
When I use the term ‘raise the bar’, I mean it in response to constantly hearing statements like these when we ask ‘what’s working and what’s not working’:
I like the breakouts but frequently get caught entering just when the breakout fails and reverses.
I always get out too soon because some money is better than losing it all if the market goes against me and back to my stop.
I just lack self-discipline and am working on a trading plan with concrete rules that I’ll have to follow no matter what.
I take 10 to 15 trades a day, I usually make money in the first half of the day and have my worst trades later in the day—sometimes it just the opposite.
I’m always getting stopped out by one or two ticks, get mad and try harder to get my money back so I don’t end the day a loser–sometimes it works–sometimes it doesn’t.
While almost every experienced trader and trading educator could give advice on how to fix each of the above statements, I believe the answer rests not in fixing but in thinking. Thinking about one’s current stage in becoming a trader.
Based on my experience as a facilitator and coach for high performance business owners and practicing professionals, I am convinced that thinking and attitude are critical factors in one’s success. Factors that must be identified, clarified, cultivated, nurtured, and applied throughout each of the following stages:
Stage 1 – The Amateur: The amateur is typically an individual relatively inexperienced and unskilled, who has yet to take full responsibility and accountability for his or her thoughts, words, and actions. Or, as Steven Pressfield discussed in his book The Art of War and again in Turning Pro, the amateur has amateur habits primarily because of his or her inability to overcome resistance.
Resistance which shows itself in a number of issues for an individual ranging from:
an addiction to money to the fear of failure and under-achieving,
the opinions of others to instant gratification, and
being easily distracted to making and living commitments.
And, when it comes to Resistance (resistance to change and taking action) for a trader:
avoiding the work necessary to create a trading plan or defined process for preparing, executing, and managing the methodology that effectively supports his or her trading,
putting off the required consistent refinement of the key components of their trading plan or process, and
not doing what he or she stated they would do in adhering to their plan, to name a few.
Stage 2 – The Professional: The professional is the individual who has made an unconditional commitment to his or her future based on thoughts, words, and actions. Or, again, as Pressfield says in Turning Pro, you’re the same person who was the amateur but now we no longer live in a state of denial and “. . . stop running from our fears. We turn around and face them”.
The key point for me in reading both of these books is how much they relate to the way trader ‘wannabe’s’ and some of the factors required to go from a ‘wannabe’ to becoming a trader.
A trader being defined as an individual who has internalized his or her trading process, executes it almost flawlessly, and takes each trading event, i.e., preparation, evaluation, decision, and execution, as a learning experience and builds on it in pursuit of his or her own definition of trading mastery.
Stage 3 – Mastery: An individual who is eminently skilled and possesses an ability and power to control his or her destiny.
In summary again, to quote Pressfield,
“The difference between an amateur and a professional is in their habits. An Amateur has amateur habits. A Professional has professional habits”.
To learn more about habits and how habits develop, read The Power of Habits by Charles Duhigg.. In my opinion, it is a book that should be required reading for one seeking to leave the ranks of an amateur and become a professional.
While you will gain insight into what a habit is and how they are developed both consciously and sub-consciously, you will find Duhigg’s Framework for habits an invaluable process for developing the habits that will help you become the professional you seek to be.
The War of Art by Steven Pressfield
Turning Pro by Steven Pressfield
The Power of Habit by Charles Duhigg
7 Habits of Highly Effective People by Stephen Covey
Until next time . . .