Excellence is the gradual result of always striving to do better.
Pat Riley

Maybe I am starting to get a little old.  Maybe the half a generation removed from most of our traders is the difference. Then there is my pending marriage and their out-till-4AM shenanigans.  But I see a disturbing trend with a few developing traders and some potential new traders who we interview (interrogate?).  I want to emphasize that I see this with only a few.   These new traders believe that if their work output is X then their reward must be X.  If only that were the case.  When you begin as a trader, your work output must be 10x to make x.  Let’s discuss.

I do not want you to be in that group of a few.   And I have seen this with a few former talented individuals on our desk who consequently were asked to leave (See Why Traders Fail in One Good Trade (Wiley).  And I see this with a few of our present traders who have all been talked to.  And some of these above were the most talented people we have ever trained.  But that is never enough for the market.  Potential absent sustained effort is not rewarded by the market.

What I see from my seat as a mentor on a trading desk is crystal clear.  The developing traders who love trading and work at it do the best.  Our most improved trader this month has done everything a developing trader is supposed to do and then more.   Much, much, more.  Today as he reviews his numbers for the month, there will be a huge smile on his face.

Little things can make all the difference.  Do you watch the markets trade during the midday and search for important levels into the Close?  Or do you take a two hour lunch? After the Close, do you obsessively replay your trading day in your head and feed your mind with your best set ups?  Do you leverage the power of simulation?  Or are you immersed in Fantasy Baseball?  Do you take all the time that is necessary to ensure that you are in the best trading stocks for your style before the Open?  Or do you settle on the first stock that could work?  Do you work on your mental weaknesses by performing visualization exercises?  Or do you just assume you don’t need to do stuff like that?

From my seat most developing traders struggle when they first start.  This is all part of the process.  And then they have a choice.  They can increase their work output to 10x.  Or like all traders who fail they can do 1/2x.  After they start doing 1/2x then their results are inevitably -3x.   Traders who decide to do 10x then see x.

And then with trading experience and a constant work product of 10x developing traders see 2x, and then 3x.  And then with this experience their work product can decrease to 9x and see a gain up to 5x, and then 8x for a gain of 6x, and then 7x for a gain of 7x.  Only after years of a work product that is not proportionally rewarded can they then see a work product that is properly rewarded.

In May of 2009 I was at a Hall of Fame dinner for a friend in upstate NY.  One of the HOF receipients had passed.  His wife spoke in his honor.  Her speech was moving.  This woman’s accomplished husband had passed and she was still so young.  What was there really to gain from this speech?  The people in the room respected her husband, which was why he was being inducted.  Most of the people were her friends so she didn’t need to impress them.  She was retired so it’s not like this was going to help her career.  There was little for her to gain.

And yet this woman inspired the room.  With the care she had taken with the preparation of her words she shouted to everyone in the room, “If you are asked to do something then you do it well.”  She never uttered these words.  But it was in every line as she reflected on the her husband’s life.  She had scoured his old year book, called up old friends for anecdotes, and asked her children what  was most important about their father.  She had worked on this 5 minute speech for days, with almost no reward to herself.  In a room filled with mostly retired jocks she left many in joyful tears, remembering the life of her  HOF husband.

We can all learn from this remarkable speech.  If you want to be a HOF trader then embrace the value of doing something well for the sake of doing something well.  If you are asked to do something then do it as well as you can.  There really is nothing else that is as satisfying.  For the developing trader, 10x equals x.

Best of luck with your trading! Don’t forget to follow us on twitter

*originally posted May 2009