A little while ago, I received a rather personal email from a reader. This reader has emailed me before, sharing bits and pieces of the things they’re working on, which strongly give me the impression that they’re exceptionally hard-working, and doing all the things they need to be doing to become a successful trader.
However, even someone like that goes through periods when they struggle. We all do.
So I tried to help them by sharing a David Ryan story and making a simple, practical suggestion. Since they replied that it did help, I asked their permission to share our emails on here (both lightly edited, for clarity and to ensure anonymity).
They didn’t just give me their permission. Paul (not their real name) also wrote a story to share with you, to give their email some context.
But if you don’t feel like reading the story or emails, and want to just jump straight to my simple tip, please skip ahead to the conclusion.
Paul’s story
Paul had no trading experience when he started trading full time in 2021 after graduating from university.
He experimented with swing, day, margin, shorting, options, and more during his first year.
But like many inexperienced traders, he was a failure in every category.
***
In his second year, he discovered that to become a consistently profitable trader, you need many years’ experience, practical skills and ongoing education.
So he dedicated himself to trading.
He set aside 11 hours a day, 6 days a week, just to trade, study and backtest.
He studied every idea he could find, wherever he could find them. Books, blogs, YouTube, tweets. His own trading and journal.
He’s been doing this consistently for 6 months.
***
In poor markets, he experiences a few small losses. In good markets, he makes small gains.
Sensibly, he will invest significant money only after getting consistent.
He also knows that risk management comes first, and that situational awareness matters more than setups.
However, he violates his rules whenever he suffers a string of losers. In a weak or choppy environment, he heavily presses the gas, focusing on the result rather than the process.
***
As his trades continue to not work, he stops adhering to his process and study schedule.
Instead, he opens his laptop just to trade and scroll on social media.
This continues for 10 days.
Then, he reaches out to someone.
Paul’s email
Hi Kay,
Today, I have a different story to share with you, which is not related to the last email.
I made lots of mistakes this month by focusing too much on the outcome instead of the process.
One thing I have noticed is that trade results are influencing trading decisions as well as my daily schedule (a common problem among traders).
Actually, I became a full-time trader accidentally in 2021, without knowing anything about trading. At that time, I didn’t know what was meant by a stop loss, types of trading, position size, risk management, etc. I literally became a full-time trader with zero knowledge. Since then, I have been putting in daily efforts to become a consistent trader. I am very passionate about trading and also confident enough that one day I will become a successful trader.
I have a daily schedule that engages me from 8 a.m. to 7 p.m. for 6 days per week. 66 hours of work per week, only about trading. But when the trades are not moving as per expectation, emotions kick in, and they are not letting me focus on my daily schedule.
In addition to that, last Sunday, [personal event]. I didn’t work for the entire last week due to this external factor and my own emotions.
I mostly focus on the process and doing my work perfectly, but sometimes I am affected by external factors or trade results.
I rigorously follow my schedule for 3–4 months, but sometimes these emotions do not let me work for 1–2 weeks.
Today, I again started to focus on my daily routine, but the entire last week was wasted because of my poor emotional control.
I just wanted to share this thing with anyone, which is why I shared it with you, as I feel you are a great human being, more than a mentor.
Thanks,
[Paul]
My reply
Hi [Paul],
Thank you for sharing your story with me. I’m honoured.
I think that virtually every trader — including the biggest names out there — have times when they are so focused on the results that they fail to follow their own processes that got those good results up until that point.
Then they learn their lesson and become more disciplined than ever, or give up on trading. I won’t judge anyone for the latter — trading is tough, and there are many other endeavours in life that one could pursue and even excel at, particularly if they take with them that work ethic required for trading.
In fact, it’s something I was specifically writing about last weekend, in my David Ryan notes. It’s well-known that he won three consecutive USICs [US Investing Championships], but far less well-known that the fourth consecutive year he entered, he was flat, because he was too focused on the results and not the process.
He took the lesson and started doing the things again that got him that great performance initially, then came second in his fifth USIC. It’s all anyone can do — to trust your process. If you truly know that it works — because you have the numbers, or did the studying, to have deep faith in it — then stick to it.
I know that’s much easier to say than to do. Especially to do at all times. It is the reality of trading, however — that consistency is absolutely essential.
Are you still doing the weekly performance reviews? Review your numbers during the weekend, choose one area you’re going to relentlessly improve/work on that week, then review how you did at the end of the week to see whether you’ve achieved that one goal, irrespective of your overall results? This will help you feel successes even on weeks where your trades don’t play out as you’d hoped.
But I will say this: everyone needs a break every now and then. Allow yourself to take one. If you give yourself permission to take a break from your discipline, whether that’s for studying, diet, exercise, etc., that recovery time will allow you to come back stronger. This is what athletes do too — for instance, Josh Waitzkin talks about it in his book The Art of Learning.
The important bit is to only take those breaks when you’re allowed to. When your schedule allows you to. When you allocate yourself a few days or even a week off, take it. But don’t take additional time outside of those allocated hours unless you really, really can’t avoid it — obviously, exceptional circumstances do happen.
This sort of mindset may help you feel less bad about ‘wasted’ time. It isn’t wasted if you take the rest to come back stronger and refreshed.
Best wishes,
Kay
Trading is a marathon, not a sprint
My response links closely to something I tweeted a couple of months ago:
Conclusion
We all know that we need to follow our process consistently to get the results we want.
Unfortunately, we also all go through times when those results escape us. In the context of trading, this typically means going through a losing streak.
Over a long enough period, or at the wrong time, this can get to anyone.
So this is my one, simple tip.
Every week, set yourself a task. The ONE area you’re going to relentlessly improve that week.
Then when the week is over, review your performance. Irrespective of your financial returns that week, did you improve the area you were supposed to focus on?
(Bonus points if you can quantifiably measure the improvement. Psychologically, this has a ton of benefits.)
If you did, that week was a success. You did your work well. Pat yourself on the back, and do the same thing for next week. Identify the ONE area you’re going to relentlessly improve that week. And so on.
It helped me. It’s helped some of my readers who’ve contacted me privately. And I hope it will help you too.
More content like this
Psychology isn’t something I write a lot about, but when I do, I try to be practical. With that in mind, I’m publishing my notes on a Stockbee psychology video next week.
Meanwhile, here are all my posts relating to psychology.
The Trading Resource Hub’s full archive is available here.