Audio available at the end of this post.
Last week, I published “3 Key Elements to Dan Zanger’s System”. That was my second Zanger stack — my first was “Dan Zanger on Finding the Biggest Movers”, published last September.
Both posts — and my associated tweets — received positive feedback, which was great!
But they also received more critical comments, along the lines of Zanger being a one-off, or just getting lucky by being in the right place at the right time (the dot-com bubble).
Though not for my own content, I’ve seen similar comments about Qullamaggie (the Covid-19 rally) and many other top traders.
To me, this feels akin to what people say of those who have achieved remarkable things in any field:
They got lucky.
They’re just talented.
They were born that way (good genes).
They were in the right place at the right time.
And sure, luck often plays a part in success
I certainly consider myself lucky to see this Substack grow as it has, hitting 3,000 subscribers last Sunday, 13 months after my first post. Thank you!
Where did the ‘luck’ aspect come into it for me?
Well, having people with large followings notice and share my work within a few weeks of my first post, including Dr. Mansi, Qullamaggie and Tom Dante.
In fact, publishing Qullamaggie stream notes (how this Substack started) wasn’t even my idea, but Dr. Mansi’s. I just happened to see her tweet asking if anyone was taking stream notes now, and impulsively decided to take action despite not feeling ‘ready’.
Best thing I ever did.
Lesson: Just start somewhere. It doesn’t matter if you’re ‘not ready’, or ‘not in the mood’.
Often, the simple act of starting creates the momentum you need to then keep going. This helps get you into the ‘cycle of accelerated returns’ (more on that later).
But people won’t voluntarily share content unless it’s good
Making it good was on me. Constantly improving both my content and myself still is on me. As is posting consistently to a high enough standard.
Lesson: Consistency goes a long, long way. If you just show up every day, you get ahead of most people.
And 1% improvements compound — big time!
A similar thing happened with Qullamaggie and Zanger. Sure, they needed an exceptional market to get exceptional returns.
But you can’t return nearly 390,000% in 23 months without skill and discipline. That’s not just getting lucky with an all-in buy — that’s repeatedly getting in at the right time, riding winners, and getting out and rolling your money into something else when the run is over.
Besides, for both Qullamaggie and Zanger, having plenty of good years outside of these extreme periods further points to skill.
And you won’t get that skill without lots of hard work, deliberate practice and sacrifice. And doing so consistently over a long period of time. And then being ready when the market is right.
To me, this is the real ‘right place, right time’ — the one that applies outside trading, too. Start as early as you can, so you can clock up the hours faster.
The minimum number of hours required for mastery is 10,000 (more on that later). Both Qullamaggie and Zanger went way beyond that.
I call that creating your own luck.
You might also call it the journey towards mastery.
Robert Greene and “Mastery”
“Mastery” is also the title of a book by Robert Greene, which I’m currently reading. You can also find him speaking on the topic in various talks and interviews available on YouTube. One I found particularly useful for traders is this one:
(Ignore the background music. And note that this stack also draws on ideas Robert shared in other talks/interviews.)
Robert introduces various ideas I think everyone ought to be aware of — certainly if your intention is to go against the tide, which it should be if you’re pursuing consistent profitability in trading.
But I also feel that Robert has done a fantastic job at identifying the core principles and patterns that turned ordinary people into masters.
Today, I’m delving into:
Some of those principles and patterns;
How traders like Zanger, Qullamaggie and David Ryan display those traits; and
How we might apply those lessons to our own lives.
The mountain of mastery
Robert explains that when you first enter your field, think of it as looking up a mountain, with the top of that mountain representing the knowledge, skill and experience you need to master your field.
At first, your goal — that top of the mountain — seems endlessly far away and intimidating. But then you start to learn the rules and practices, and develop the skills needed to reach the top of your field.
And step by step, you make your way up that mountain. The higher you get, the better perspective you get of what your field represents. As Robert put it:
“You have a firmer grasp on reality.”
Put differently, you have a much better idea of what it really takes to keep climbing.
But often, the more you learn about your field, the more complicated it becomes. You learn about new concepts. You find that there’s more and more information to internalise.
This can get so bad that you’re feeling completely overwhelmed, to the point where you may feel that the top of the mountain is much further away than you first thought. Perhaps even to the point where you feel like giving up.
Starting as a technical writer vs starting as a trader
If you haven’t heard about my first day in my first job as a technical writer (aged 21):
I was given a >300-page book to update, on an infamously difficult topic. Bear in mind I had neither technical writing nor industry experience. And in those days, in that company, technical writers weren’t given formal training. You learnt on the job.
I felt so out of my depth, I wanted to cry. I thought to myself: ‘If this carries on for a week, I’m resigning.’
I didn’t just feel like I was staring up a mountain — I felt like I was barefoot and unable to find a path! (You can read how that story ended here.)
That’s very different to how most of us started trading, myself included (story here). I bought my first stock on my father’s suggestion, shocked to find that two weeks later, I’d made more than my monthly salary by doing virtually nothing. (It was April 2020. Enough said.)
That got my attention. Trading is easy! In those very early days, I saw no mountain.
But, of course, I ended up giving my 2020 gains back. Death by a thousand cuts — I started trading with stop losses even before the bull run was over. So, while I lacked a true system, situational awareness, and many other things, I’ve never blown up.
Nonetheless, those losses really hurt. The mountain became very obvious. My “grasp on reality” became much firmer.
How Qullamaggie started
In the summer of 2010 (aged 23), Kristjan started — as he put it on The Compounding Lounge — by “coincidence”. He was a security guard in a few places, including at Nasdaq Stockholm.
He had no clue what the men in suits coming and going were doing, and — coming from a working class background — he’d never heard of the stock market.
But what really made him take notice was a lavish office party. “S**t, these people have money!”
So, consulting Google, he learnt a bit about investing, bought some boring stocks, held them for a few months, sold them again, etc.
He then found out about trading — “investing on steroids”. That really got him curious. And he ended up going all in on trading from May 2011, not even bothering to graduate from university, which was just months away.
First, he paper traded, doubling his account in two weeks.
He then spent two years blowing himself up several times through day trading. And, as many of you can relate, it’s incredibly tough to lose your hard-earned money — possibly even, as they were for Kristjan at the time, your life’s savings.
Starting the climb
Kristjan’s no fool. He didn’t just become conscious of the mountain, or spent those two years simply doing the same thing over and over — he was climbing.
More specifically, he was studying. Hard.
As he put it himself, he was figuring out what was and wasn’t working for him, then doing more of what worked and less of what didn’t. (Sounds simple when you put it like that, right?)
He ultimately became profitable in 2013, and didn’t have a losing year again until 2022.
Kristjan made his first million day trading before transitioning to swing trading, which he discussed on Chat With Traders.
Only in 2013, when he went through all US stocks, did he realise that the really big moves take weeks, months and even years to play out.
In other words, Kristjan was leaving a lot of money on the table. He was only part-way up the mountain.
(Story continued later in this stack.)
Discover your life’s task
I personally believe we’re all born with an affinity for something, and that leveraging it can supercharge the ‘returns’ of your hard work.
This fits a big point Robert makes: each of us is unique. The combination of our DNA, brain configuration and experiences has never occurred before in the history of the universe, nor will it ever occur again.
And from a young age, we often display signs of being drawn to certain things over others. Those are the things we should focus on. More than that, we should completely dedicate ourselves to them.
Mozart
This is well-documented for famous, successful people in particular — as a music lover, one name that immediately springs to mind for me is Mozart, being absolutely captivated by the piano and playing his first chord aged 4.
That curiosity and aptitude then had to be nurtured and cultivated into true skill and mastery with the right training.
And while it’s probably fair to describe Mozart as ‘talented’, I think Mozart’s true luck was having a father who recognised that school — giving people a ‘well-rounded’ education — wasn’t the right place for him.
Rather, Mozart needed more specialist education and training, which he received at home from his father, and at a much younger age than most counterparts.
Right place, right time.
David Ryan
David Ryan’s ‘luck’ was similar: his trading journey started aged 13, at the dinner table.
His first trade, however, lost him money (due to the bear market at the time), but that didn’t kill his interest. David was fascinated with why his stock went down when others were going up.
Aged 16 or 17, David had trial subscriptions to Daily Graphs and Value Line. And following graduation, he tried to get a job at the company he was already getting products from — Daily Graphs (now Investor’s Business Daily, or ‘IBD’).
A few years later, David was still just as enthusiastic, considering what Jack Schwager wrote about him in Market Wizards:
“Although most of the traders I interviewed have a love for trading, none have the unbridled enthusiasm demonstrated by Ryan.
“To Ryan, the whole process of stock selection is like a terrific game—a treasure hunt as he describes it—and he still can’t believe he is getting paid to do it.
“[…] I suspect that as long as [Ryan] was supplied with his charts and computer runs, he would probably be content to work in a hall closet.”
Follow your curiosity
One of the great advantages of pursuing something that aligns to your natural affinity is that you’re much more likely to be intensely connected to what you’re studying, because of your love for your field.
It means:
You’re enjoying the process;
You learn more intensely; and
You push past obstacles more easily.
Point #3 means you stand a much better chance of getting to the top of the mountain.
You’re not going to start climbing, realise ‘damn, there’s so much more to this than I first thought’, then decide it’s not for you and give up.
David, like Kristjan, got himself to profitability remarkably quickly:
Mid-1982: Graduation. Starts at IBD.
By mid-1983: Ran up his account 160% (bull market; no skill).
By mid-1984: Gave all his gains back, plus 20% of his starting capital.
By end of 1984: Studied all his trades, figured out his mistake. Entered USIC 1985.
1985–1987: Wins three US Investing Championships (USICs) in a row.
It’d be strange to not assume his obvious curiosity for the stock market, independent of the money, had something to do with that. Along with hard studying, of course, plus another big factor:
The one shortcut towards mastery: having a great mentor
If you need a shortcut, that’s a sign you’re not ready to be a master. What makes people successful is their degree of motivation.
In any case, to master anything, you need patience, and you need to know about the 10,000-hour rule (more on that later).
But the idea that you can somehow circumvent the process is bad psychology. It’s setting yourself up for failure and impatience.
But there’s one exception, as Robert points out: having a great mentor. David Ryan had one in William O’Neil. In fact, he was so determined to learn from O’Neil, he was prepared to do anything, just to get his foot into the door. Even work for free.
Qullamaggie’s mentor was Stockbee
From Pradeep, Kristjan learnt important trading concepts — in particular, what type of studying and activities actually move the needle on skill development, most notably deep dives.
This was hard work. Kristjan’s work ethic is incredible, no doubt fuelled by his determination to succeed. He was also highly motivated to scale up his trading while being able to spend less time in front of the screens.
Having Pradeep as his mentor sped up this process — a lot. Kristjan also had day trading mentors, and on The Compounding Lounge, when asked if he’d do anything differently if he could start over again, he said it’d be to find good mentors and role models from the start.
Kristjan became financially independent in 2017 — around the same time that he started to make videos and share ideas on Twitter. Six years after he started trading; four years after first becoming profitable.
To finish Kristjan’s story, he became profitable in just two years — an impressive feat. But to call this ‘lucky’ or ‘talent’ would be an insult to the man’s:
Focus and commitment, sacrificing everything else for trading; and
Hard work, for countless hours, studying practically every stock under the sun and anything he could find on trading.
The only ‘true’ shortcut he took full advantage of was having a great mentor — the only shortcut towards mastery Robert is also willing to acknowledge.
If you’re looking for any other shortcuts, your mindset is not that of someone ready to embark on the road towards mastery.
The cycle of accelerated returns
Earlier, I spoke of the ‘cycle of accelerated returns’, with full credit to Robert for that term.
As he explained (9:22):
“In those early years of entering your field, you are so deeply engaged in it, you’re so curious for its own sake, that you pay greater attention. You learn faster. You enter what I call the ‘cycle of accelerated returns’.
“When you’re excited and you learn something, now, the practice becomes more pleasurable. And you practice harder. And as you practice harder, it gets more pleasurable. And you practice harder and harder and harder until it’s like generating a motor.”
This really resonated with me, particularly (but not exclusively) as a writer. It’s generating that momentum. It’s spinning that flywheel.
The 10,000-hour rule
The 10,000-hour rule (also known as the ‘10-year rule’) says that a person needs at least 10,000 hours to achieve mastery, talented or not.
Those with great skill and knowledge at a comparatively young age didn’t get there by chance alone — they got there by clocking up the hours quicker, usually through a combination of starting earlier and spending more time per day on deliberate practice than their peers.
By the way, you may see articles online ‘debunking’ the 10,000-hour rule, declaring that the science is shaky and that you can still suck at something after 20,000 hours.
Both declarations failed to notice this important footnote:
How you spend your practice time matters.
Whether you call it ‘deliberate practice’ or ‘resistance practice’, the point stands. You can’t spend practice time randomly.
It takes targeted, hard work. You must focus. You must be completely dedicated to this one thing.
Consider both David’s and Kristjan’s stories. David spent working hours (first part time, later full time) at IBD, in the markets. Once finished with the day job, he went home and carried on studying the markets there. Kristjan was also a full-time trader from basically the start.
My work days are similarly focused. I start earlier than my colleagues, so that I can:
Write without interruption; and
Take a long lunch to trade.
After I finish work (as a writer), I’m either writing or studying. And before I go to bed, I run through my watchlists and plan the next day.
The aim is to get better at the things I love.
In fact, I want to master writing.
What happens when you’re at the top of your mountain?
Robert said (00:15):
“After years of practice and experience and study in their field, the minds of these various figures had reached a superior level of intelligence.
“They could discover things about the world that were simply invisible to everyone else.
“They had a sixth sense for trends and opportunities. They could make the most surprising and creative connections between ideas.”
Once at the top of that mountain, you’re able to see in all directions, allowing you to make connections between ideas that appear disparate to everyone else — something you can’t do halfway up the mountain.
“This command of [your] field is immensely satisfying. […]
“This is the highest form of intelligence we humans can achieve.”
I think, certainly within trading, that people fail to appreciate the real pleasure of reaching the top of your mountain.
It’s not money — to become the type of person who’s able to reach the top, you’ll have grown and changed so much, your motivation will have become more intrinsic. You’ll have found satisfaction in doing the hard work, developing your skill and finding your routine.
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Further reading
The Trading Resource Hub’s full archive is here.
Great Article Kynaa...Loved Your Work
Keep Posting more about Trading and Stock Markets.
Good morning Kyna!
A couple coffees coming right up!
Maybe you'll be interested in my week's diary, that I also put on YT @ https://www.youtube.com/watch?v=GsWezWAoh2c It was fun writing that.
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What a day with NNE. I'm a 68 yr old newbie trader. Been in IT since '77.
Things started on Monday when I was a little green. Had fun trading NNE channels with small amounts of money.
Keep in mind that I'm new to this, and I don't have all the terms straight in my head. When I speak of channels, I'm referring to very short duration trends in a larger trend. These trends don't last long. I draw a trend line on the highs and lows, forming a narrow "hallway". These lines need to be moved, or redrawn frequently. Price bounces in this hallway. Buy the lows and sell the highs. These channels go on for hours. The percentage gained will vary, but I lose interest in anything less than 2%. This is not easy money. But there is absolutely no emotion! You are wrestling with the market. For now, I enjoy this exercise.
Then Tuesday happened, and I was more comfortable. I traded more channels with a little more money and ended up greener. Yay!
Then Wednesday happened. It was a sad day because of that early sell off. Worked 4 hours in the up channels of an overall declining trend. I wanted my money back! I gained some, but still down a LOT. I was really bothered by this. I thought, this is not for meI didn't give up, nor did I sell to minimize my loss. I held onto a loser (I know). I said to myself, "I'll never do this again."
So, Thursday happens. Things got worse. Nope, I'm holding on. Did you happen to see my 380 shares in L2 for $25.71? That was me.
Then Friday arrived. I should have checked my email, but my family needed me. At 11:30 CDT I read my email. Really good NEWS ON NNE! AAAHHHHH! I open ToS and TradingView (amazing tool). Yikes! NNE up 40%. Wife comes into office and looks at the chart. She says, "That looks nice." ROTFL. I go to work late (old Sys admins can). I log into my tools and watch the action. NOTE: find a news source and sign up for their emails. Start with Global News Wire. You're welcome. I was not doing this on company time.
For fun I trade a channel and gain $30. (Still learning folks) The ups are really nice! RSI looking awesome. Everything is above the 21, 50, and 200. Will it make it to my $25.71 limit? Closer, closer, so close! I removed my limit. Maybe it will move a bit higher. (Wife suggested I do that) Price got within a nickel of where my limit was and petered out. Arghh!
Should I have sold at market and took what I could? Nope, I'm going to give ETH a try. Reset my limit for GTC/ETH and did some IT stuff. Came back a few minutes after the bell and woo hoo!
I got some great experience this week and trading channels was a riot. Maybe I'll have to retire after all. I was planning to work until I no longer could. However, God miraculously gave my current job to me(ask me about that). I will not remove myself from something my Heavenly Father gave me. If it is His will that I leave my day job, He will make it obvious.
Ross said in one of his videos, "You got to work for it." Yep, that was work. But it is was also an education that did more for me than a lot course work. If I had a suggestion for others who are new, or unsuccessful, it would be this. As Ross says, take it slow and work in a simulator. Simulators are good tools, and I've used them, but there's nothing like putting small amounts of real money into a trade and then work hard to make it grow. What I did on Wednesday was an "In the trenches" day. My life has been full of those kinds of days. I was once invited by the University of North Dakota President Emeritus Tom Clifford to take the lead on a big project. At the time I was the manager of UND Aerospace Technical Services. Shell Oil had recently donated two Cray super computers to our division. The first was an X-MP, the second was a Y-MP. The school wanted to sell time on those machines to regional businesses. I was asked to lead that effort. I told Tom that I was uncomfortable with that responsibility because it was WAY out of my wheelhouse. I don't remember exactly how he put it, but it went something like this. "The best way to get comfortable in a new, or larger wheelhouse is to jump in and do it." I declined the opportunity for other reasons, but he was right. Jump in, you'll get used to the water quickly.
One more bit of advice for those who have "Ears to Hear." Subscribe to Kyna Kosling's Substack and read everything she has. "Your edge is inside you." Go find it!!
Ross, thank you for everything you're doing. I appreciate your spirit and openness. I wish the best for all you traders.
Hope you enjoyed my story. I am going to relax this weekend and take my wife out to celebrate 🥳 a wild week.
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