Should traders fix their weaknesses, or play to their strenghts? Which is more effective to improve trader performance?

 

“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” - Thomas Edison

 


Some trading coaches say that we need to eradicate our weaknesses to reach our potential, others inspire us to play to our strengths. So which is it?

There are a number for advantages to each approach.

Focusing on Strengths

  1. Maximizes Potential: By focusing on strengths, individuals can leverage their natural talents and excel in areas where they already have an advantage.

  2. Boosts Confidence: Success in areas of strength can build confidence and motivation, leading to further achievements.

  3. Efficiency: Time and effort spent on developing strengths often yield better and faster results compared to improving weaknesses.

  4. Specialization: In many fields, being exceptionally good in a particular area can be more beneficial than being average across several areas.

Overcoming Weaknesses

  1. Balanced Skill Set: Addressing weaknesses can lead to a more well-rounded skill set, which is particularly important in roles that require a broad range of competencies.

  2. Risk Mitigation: Improving weaknesses can prevent them from becoming significant liabilities that hinder overall performance.

  3. Growth Mindset: Working on weaknesses can foster a growth mindset, encouraging continuous learning and resilience.

You have made an error, fallen off the pathway, and deviated from what you know you should do (your trading plan), you are thrust into a state of internal chaos, worry, and concern. You do not know what to do. Your life can be going very well, and then something can come up and everything changes. You are still a trader, but it is not the same; everything about it is different. It is negative and dark.

What you can do if the world is not turning out for you is examine yourself for action patterns and beliefs that are not serving you well. Find out what they are and what to do about them. Maybe you are not moving forward because of fear, and maybe that fear is grounded in a terrible experience you had in the past that you have never been able to understand. Perhaps you've suffered a massive loss, a margin call or a blown account. Deal with it, move on.

A practical way to improve your performance is by thinking like a scientist. Treat every trade and every outcome as feedback. This helps you understand what works and what doesn’t.  Which of your trading setups generate the most return? Which of the instruments that you trade give you the best reward? What is the best time of day to trade? What day of the week do you make most of your profitable trades? These are just a few of the questions that you can use to uncover your trading strengths.  Evaluate your performances to get a clear picture of your ability. Study yourself and your track record and uncover what has worked well for you in the past. What has made a meaningful difference to your success?

When things have fallen apart and you have ground yourself into bits trying to figure out what happened, you may realize it was actually your fault. This is a sign of maturity as a trader. To climb out of the mess you have gotten yourself into, you must decide you are going to do what you are good at to get yourself out. Focus on your strengths. Concentrating on your wins and the positives will lift you up again. Your past accomplishments will provide a glimmer of hope for your future as a trader.

It's great to correct your mistakes, but it's in your victories that you can find your path to fulfillment and your future success. Hidden in your wins may be the key to your development as an elite trader.

 So many traders keep looking for that silver bullet. They go from one approach to another, one system to the next, in a frantic search for success, for the holy grail of trading success. The reality is that our best performance is hiding in plain sight! Explore what you are doing when you are most fulfilled and most successful. Focus on your strengths and don’t give up on your dream.


Here's to your next great trade!

Justin


P.S. If you need help overcoming problems in your trading process, feel free to reach out. I'm happy to assist.


 

Popular posts from this blog

Occam's Razor

Image
 A close shave. Recently, I found myself working day and night on fine-tuning an exit strategy for one of my day trading systems. Delving into statistical probabilities and portfolio theory can quickly turn into a quagmire of data, models, and losses. One can be tempted to add more and more criteria, rules, and layers to achieve a high probability trading system.This is know in the industry as "curve fitting".  C urve-fitting refers to the process of creating a model that closely fits a specific set of historical data. This can lead to models that perform well on past data but poorly on new, unseen/ future data due to over-fitting. Traders may be misled by profitable back tested results if a model has been curve-fitted. The model may show impressive returns and low risk in back-tests, but these results cannot be replicated in live trading. This is a common mistake that traders make and can be extremely frustrating when a trader curve fits a strategy that produces...
Read more

Is this the greatest break-out trade of the year?

Image
  A number of years ago I read a short trading book. Its a very basic book, covering a rather basic stock trading system. It was developed by a guy who was not a hedge fund manager, broker or Wall Street insider, yet it had a profound impact on my trading and beliefs about markets. You can purchase the book here for only a dollar or two: How I Made $2,000,000 in the Stock Market The basic premise is that stocks trade in a range and should only be bought when they break the range or what has become know from the book- a Darvas box. Read more about trading the Darvas box here:  Darvas Box theory NVIDIA soared to another new high yesterday and has been exceeding analyst expectations all year. For more context, read this article: NVDA news article 05/06/2024 Looking at the historical daily chart of NVDA, it may have been a classic Darvas box/ break-out trade. This is text book example of a long term upside break out.   As can be seen from this c...
Read more