- 1. FIRST THINGS FIRST
- 2. EXAMINE YOUR MOTIVES
- 3. MATCH THE TRADING METHOD TO YOUR PERSONALITY
- 4. IT IS ABSOLUTELY NECESSARY TO HAVE AN EDGE
- 5. DERIVE A METHOD
- 6. DEVELOPING A METHOD IS HARD WORK
- 7. SKILL VERSUS HARD WORK
- 8. GOOD TRADING SHOULD BE EFFORTLESS
- 9. MONEY MANAGEMENT AND RISK CONTROL
- 10. THE TRADING PLAN
8. GOOD TRADING SHOULD BE EFFORTLESS
Wait a minute. Didn’t I just list hard work as an ingredient to successful trading? How can good trading require hard work and yet be effortless?
There is no contradiction. Hard work refers to the preparatory process-the research and observation necessary to become a good trader-not to the trading itself. In this respect, hard work is associated with such qualities as vision, creativity, persistence, drive, desire, and commitment. Hard work certainly does not mean that the process of trading itself should be filled with exertion. It certainly does not imply struggling with or fighting against the markets. On the contrary, the more effortless and natural the trading process, the better the chances for success. As the anonymous trader in Zen and the Art of Trading put it, ”In trading, just as in archery, whenever there is effort, force, straining, struggling, or trying, it’s wrong. You’re out of sync; you’re out of harmony with the market. The perfect trade is one that requires no effort.”
Visualize a world-class distance runner, clicking off mile after mile at a five-minute pace. Now picture an out-of-shape,
250-pound couch potato trying to run a mile at a ten-minute pace. The professional runner glides along gracefully-almost effortlessly-despite the long distance and fast pace. The out-of-shape runner, however, is likely to struggle, huffing and puffing like a Yugo going up a 1 percent grade. Who is putting in more work and effort? Who is more successful? Of course, the world-class runner puts in his hard work during training, and this prior effort and commitment are essential to his success.