Trading is a journey of mastery, viewed through the multifaceted prism of three overlapping lenses. These lenses are the Technical Lens, the Performance Lens, and the Self Lens. To achieve true mastery in trading, one must skillfully balance and synchronize these three lenses. Let's delve into each of them.
Technical Lens
This lens serves as the foundation of trading mastery. Here, traders focus on acquiring the knowledge and understanding necessary to assess and uncover value in the markets. This lens is where traders develop most of their edge. It's where trading ideas take shape, forming the basis for strategies and playbooks. As traders grow, their approach evolves, adapting to new information, insights, changing market conditions, and personal growth.
At a micro level, the Technical Lens is where traders concentrate their day-to-day or minute-to-minute attention, shaping trade ideas, interpreting signals, and structuring trades before execution. This lens is relatively tangible, making it easier to learn and master.
Performance Lens
The Performance Lens encompasses the risk management aspects of trading. It covers execution, trade management, closure decisions, and other vital components such as risk management, position sizing, capital management, stop placement, and profit-taking strategies. Unlike the Technical Lens, this lens involves higher emotional engagement as traders face the challenge of managing money and reputation.
Traders often hold themselves to stringent standards, regardless of whether others are aware of their actions. Success through this lens is challenging to learn solely from books; experience plays a significant role. Mentoring can be invaluable, though it's a personal journey with varying paces of adaptation.
Self Lens
The least explored but crucial Self Lens focuses on the trader's identity, behavior, alignment with their actions, and the context in which they operate. Neglecting this lens is akin to owning a powerful car but lacking the ability to drive it effectively or maintain its essential components.
Understanding oneself is the most arduous aspect of trading. Successful traders often acknowledge that trading teaches them more about themselves than any other endeavor. While there are no books on this topic, self-improvement can be facilitated through journals, seeking feedback, reflection, peer discussions, mentors, coaches, and various self-learning methods.
The Overlap
The three lenses do not function in isolation. Traders must consider overlaps between them. Questions like risk management compatibility with personal goals, time availability, and sleep patterns are vital. Mastery in trading is a multi-year journey, combining forward strides with setbacks, successes, failures, recovery, and growth. Mastery requires balance in all three lenses, as being exceptional in one but deficient in others can lead to failure. This is part of why learning to become a profitable trader takes so long.
In conclusion, trading mastery is a multidisciplinary, highly skilled endeavor that demands years of dedication and learning. While it may not yield instant success, a well-structured learning and growth plan can pave the way. Remember, maintaining alternative income sources while you learn can be prudent. Trading is not a solitary pursuit; it is a calculated investment in rigorous learning, with the potential for substantial rewards.