I have taken up a new pastime.
A few months ago, I started to become interested in day trading. I am finding the learning curve immensely satisfying. Every day I spend time reading around the subject, scouring the net for ideas, learning the principles of the psychology of trading, position sizing and risk – and of course identifying the strategy that’s right for me. In terms of strategies, there are literally thousands. As with any subject that is both a science and an art there is disagreement between how a trader should balance his/her focus. Some teachers will tell you it’s all about the strategy, then position sizing & risk then psychology. Others flip it and say it’s at least 70% psychology and only about 15% trading strategy. I tend to err towards psychology being the predominant focus. 90% of the market lose and wealth is never created – merely transferred. As I already said – a fascinating opportunity for the prepared few and a den of snakes for unwary.
During my research, I came across a guy called Tim Sykes. Tim gained fame by trading his way from 12,000 odd USD from his Bar Mitzvah money and turned it into 1.65 million USD by the time he was 21. He focuses on penny stocks which are defined as those trading below 5 USD/share and are deemed to be thinly traded and subject to a lot of volatility and what are termed misadvertising driven “pump and dump” schemes. This can be rich pickings if you know what you are doing, but a way to dusty death if you are a naive speculator. Tim Sykes has built himself a successful business by continuing to trade in a careful considered and relatively risk-averse manner, whilst building a training business and creating a community around him who he continues to train and mentor.
I am not using this article to specifically recommend Tim Sykes, although I am personally considering taking his training. I am especially not recommending people start a trading career in the volatile and highly speculative world of sub 10 USD stocks.
I did, however, read a really interesting article he wrote, that highlighted a habit all successful traders have, which I use in my corporate life to considerable advantage.
Everybody in the entrepreneurial world knows that it can be a very hard and unrelenting grind. There can be long chunks of time when progress can appear to be incredibly slow. Yes, there have been quite a few days when I have woken up thinking, “why do I put myself through this when I could be in a nicely-paid corporate job, with a big title, business class flights and the ability to stop thinking about work the moment I leave the office?”
Then, you get the highs when breakthroughs start to be made, people start taking notice and you make headway. I needed to learn a whole host of new skills and that process never stops. I received the gift of “loving to learn” relatively late in life but it is now central to everything I do.
Getting to the point!
One of the points Tim makes in his article is “successful traders are students of the markets for life”. Good traders get used to tracking and documenting everything they do and using it to refining their skills and strategies over time. The process of regular reflection creates the more successful trader. If you dont write down the WHAT, HOW and WHY then it will be forgotten in ten minutes. Opportunity lost.
It’s exactly the same in entrepreneurial life.
We have to find ways to continue to hone and polish what we do and how we do it. Some entrepreneurs simply read, some appoint their own coach and others join mastermind group. Yes, all of these can be incredibly valuable but there is a tip that less than 1% of entrepreneurs apply and it can be incredibly useful.
Start documenting your own business journal every day. The issue is not theory – its execution. It adds time to the day – after all the most valuable resource an entrepreneur has at their disposal is time. For many, there is simply not enough time in the day to do it.
Except they would be wrong. You make time. If you are able to look back at your business over time and are able to track:
- what worked well
- what failed
- lesson learnt
If you do it as you go and are prepared to be honest with yourself and cover everything including the “faffing about” – which we all do – then we can uncover some startling observations about ourselves.
Over time you will pick up on new ideas and strategies and you will hone yourself to be the most successful you can be. There is only one critical successful factor to making it work and for many it’s the hurdle they fail to clear. The principle of intentionality. This will be boring and cumbersome at the start but if you diarise to make sure it is done every day for 30 days you will come away with insights with yourself which may change you for ever and you won’t stop.
It is also one of the best tips to adopt to be consistently successful.