Traders often start out with some beginner’s luck because strong markets attract newcomers. Even without a lot of skill, in such markets, profits can be generated almost by accident simply because the trend is one’s friend.
Mimic Success
When markets correct, and things get more volatile, as they are right now, traders often seek guidance from experts because modeling the attitudes and behaviors of successful traders is a good next step. It works in business and it works in trading. We learn a lot just from being around successful individuals.
In fact, traditionally, trading was only taught in apprenticeship situations in financial centers such as Chicago, New York, or London. These were the places where one had the opportunity to earn a “Master of Market Science” degree from the School of Hard Knocks.
Sheep vs. Goat
With the Internet, it’s now easier to find virtual apprenticeships. They can be had with the click of a button. In the end, however, following other traders doesn’t get us where we really need to go.
No matter how good the mentor is; no matter how golden their road has been, as long as we stay in the “follower mentality” we remain more sheep than goat.
We never develop the inner fortitude and self-trust that’s necessary to take money out of the market on a consistent basis. Trading for a living requires a gut-level commitment to face not only the market, and the risk it entails, but also the commitment to face (and know) ourselves.
The Flow Channel
After a few years of experience, wise traders realize that their bottom line results largely depend on their own mindset, which at the very least means sufficient self-control and discipline to find what I call the Flow Channel.
The Flow Channel is the winding path of adventure that lies just on the other side of the City of Confusion and the River Angst. To get there, traders need to pass through the Valley of Fear. Managing this crossing properly is an art, but the challenge of moving through Fear cannot be avoided.
You see, if we try to play it safe, the spark from the trading environment will be insufficient to ignite what I call the “Braveheart Response.” This response mobilizes our courage and drives purposeful, effective action without excessive regard for safety. It’s our natural response to a challenge that’s 100% meaningful, but not entirely overwhelming.
If we activate the Braveheart Response, we have one compelling advantage – we learn faster. And in this game, the game of trading, the fastest learners win.
