Just taking time to reflect on a historical week in my personal trading and it has bought to light another key area that has enabled myself and many of my top performing graduates to outperform even some of the most reputable of hedge funds…keeping things simple.
I generated my best weekly return on my trading capital last week in over 4 years so a really pleasing landmark and even more pleasing was the fact that the majority of the return came from just 2 trades using 1 single strategy. A simple approach but with outstanding returns. But why can such a simplistic approach yield such positive results? It comes down to the fact that we as humans can become masters of a few simple things rather than a jack of many.
[subscribelocker] When you learn something so well all that can happen is that you become better and better at it. Why did David Beckham become the best free kick taker in the world of football? Because he spent hours and hours on the training pitch taking free kick after free kick until he was the master that everyone wanted to follow. He could have taken up several sports and been great at each but never really a master of one. Yes granted, there is an element of monotony involved but the excitement will come from the byproduct of your mastery – continuous capital growth in trading, winning trophies in football. The process of trading should become robotic and monotonous as you keep doing what you know works day in day out.
I have had the fortune to spend a great deal of time with many traders of different experiences and abilities and the one thing that is a commonality in the top performers is that they hone in on 1 or 2 strategies that match their objectives, personality and lifestyle and become brilliant at them. On the other side, sadly, are those who want to read every book, learn every indicator, use 10 different strategies and change everything at the first sign of a losing patch. And it is safe to say with this approach that sporadic results ensue.
Now it isn’t to say you remain ignorant to learning new things and keeping your finger on the pulse but ensure that anything you do goes towards improving your simplistic plan, not changing or adding heavily to it.
So wherever you are with your trading, take heart from the fact that trading is simple, surprisingly so. So if you are not there yet, break down your approach into simple steps, and then become the master of your trading and reap the rewards.
Have a great week 🙂