I remember back in 1997 when I stepped into Maverick Trading for the first time. As I I remember observing professional traders with years of experience and I couldn’t believe how easy it seemed to be. They seemed to go in and out of the market with precise timing, always market was going to take a big run or tremendous fall. However, when I sat down at my own computer, it didn’t come as simple to me as I was pretty sure I was entering and exiting at the absolutely worst time. How in the world could they make it look so easy while I was having a difficult time with the easy stuff?
Sittng there at my desk, I recalled a young kid|remembered one of my players I was coaching on the high-school rugby team I was coaching ask me how in the world I could kick as accurately as I, or pass a ball that far, or read the defense of the other team. At first I thought, well…I just can. When I really thought about it, I remembered all the time and practice I put|But my next thought took me back to all the days of practice I had put into the sport starting at age 14. I remembered all the days going outside practicing kicks, pasing the ball as far as I could and watching every rugby game I could get my hands on| all the times kicking that stupdi ball, throwing the ball as far as I could and watching every rugby game I could get my hands on|analyze every video of the New Zealand AllBlacks I could find. I recalled playing over 300 games during my playing career. And the answer I gave that kid was, “practice, practice, practice”. He took that advice and became the most amazing|my urging and soon became the most skilled rugby player I have ever seen. as he grew up,He ended up playing on the National team, surpasing any of my personal achievements in rugby.
Struggling my first couple weeks trading at Maverick Trading, I realized I was just like that kid. I wanted to have instant results without putting in the years of hard work to get there. Over the years, I have seen this attitude so much as people think trading are the easy way to financial success. In fact, they tout it on commercials, TV shows,etc. all around.
So, you announce to your family that you are going to quit your job, become a full time trader, profits will flow effortlessly into your account and life will be wonderful. It all seems so easy, and the seminar people are doing it, so why can’t you. You are just as intelligent as everyone else.
This type of thinking borders on the delusional. Just as one cannot wake up one day and announce that one, without any formal education training including the school of hard knocks is going to start a career as a heart surgeon, one does not become a proficient trader immediately. Get over yourself, because it is a fantasy.
No matter how many bells, whistles, indicators, seminars and books with which you surround yourself, you have to go through the gauntlet. Trading is simple, but it is not easy. Trading is a skill that takes effort, time, study and disciplinededication. In order to obtain the necessary skills of trading, one must progress on a path, which is intellectual, spiritual, and personal. For many, this is the most difficult journey ever taken. Start where you are, and realize it won’t come without work|understand that it is about the process, that it takes time and all the things you desire are worth it if you just keep going with passion. Without passion, why bother?
Each person must achieve the levels of the learning process, and must do this one step at a time. You cannot skip a step, but if you become arrogant, do not continue to learn and grow, you can and will fall down a step or two.
#1 – Unconscious Incompetence: You are too ignorant to know how ignorant you are. You are clueless as to the realities of trading, a.k.a. ignorance is bliss.
This is the first stage of trading and you are not aware of the existence of, or need for, specific trading skills. You don’t know what you don’t know, including that you have any deficiencies since you don’t know that there are any specific trading skills. Denial will definitely come into play here as well, as you may think that such skills are unnecessary or not useful, and all you have to do is to subscribe to a service or hotline, or jump on the next “hot” pick and money will come rolling into your account. If you every want to move to the next stage, you must overcome your denial and become aware of your incompetence and become consciously aware of the need for training. Without taking this next step, you will not progress and no new skill will be acquired. There will be no profits.
#2 – Conscious Incompetence: You know that you don’t know, but you are not entirely sure what you don’t know.
Upon reaching this stage, you become aware that trading is a skill, which exists, which is practiced by many and is relevant to your success. You also become aware of your deficiencies in this area by attempting to trade or practicing how to trade. This is the stage in which you begin to figure out how much you don’t know. Successful traders will, at some point during this stage of the learning process, make a commitment to learn. They will make a commitment to study, to be teachable and to practice, practice and practice until you know what you don’t know.
#3 – Conscious Competence: At this point, You know what you know, and you can trade, but you have to think about it.
The great thing about reaching this stage is that you know the skill of trading can be performed reliably, consistently and at will. However, you have to concentrate a lot, and think a lot, in order to do it. It is not second nature, nor is it automatic. At this stage, you are hungry for more learning, but you are not able to teach anyone else how to do it. The only way to proceed from this stage to the final stage is to practice more and more until you have reached the level of:
#4 – Unconscious Competence: You know exactly how to do everything, and don’t have to even think for a second about it. You just do it.
After all your time, hard work and dedication, the act and process of trading consolidates within the memory and pattern recognition areas of your brain…it becomes second nature. If you are really good at it, you can trade and do other things at the same time. Certain people at this stage are capable of teaching others, but this is not universal. In fact, it may be more difficult to teach at this stage since the skill has become largely instinctual. It is at this stage when, if someone asks you how you knew to do that, you have to pause, think and say, “I don’t really know. I just did it.” This is trading mastery.
Professional traders, professional athletes and anyone else who has perfected their craft execute the fundamentals with unconscious competence. That means they’ve practiced the moves so many times in the past that they can do them almost perfectly every time without a second thought. We all remember the game winning shots that Michael Jordan made look almost effortless. However, we never see the 100 shots he took every single day or the early morning practices before anyone else was at the gym. Practice makes perfect.
Head Trader, Robb Reinhold
Maverick Trading