This week @Steenbab and I presented a webinar for an educational trading firm in Spain.  Consistency and the Stages of Learning were our topics, with Dr. Steenbarger focusing on mindset.

One slide I developed for the webinar stresses an important lesson for traders.  Here it is below:

Let me share an anecdote of a conversation we recently had with a developing trader.  We brought him into a private office and told him he was gonna get a bump in risk and capital.  His coach, we say Team Leader, suggested one for him in an email.  Our Floor Manager agreed this was sensible.  I greenlit the idea.

I encouraged the trader to dig deeper into his edge.  Tag his trades and import them into SMBU Performance Center- Tradervue.  See the trades where he had the most edge.  Trade those trades bigger.  Eliminate the trades that were not working for him.  This was to be his focus.

And he said something that I hear commonly from traders who get off track.  Trader wanted to trade more of his big picture trades.

No!  No!  No!  No, for this trader and his strengths.

I counseled this was not necessary at this stage in his learning.  He was in the Consistency stage, leaking into the Sizing stage.  He was not at the Expand your Edge stage.

Now if he had edge with bigger picture trades then his idea could have been advisable.  But he was having edge with active, short-term trades.  Let’s do more of this.  Let’s trade them better and bigger.

Work on your technology to find more of these trades.

Study these trades intensively.

PlayBook these trades.

Trade them bigger in real-time.

Knock off the worst trades.

Let’s win in the stages of Consistency and then Sizing.  Let’s win there.

And then we will conquer the next stage- Expand your Edge.

Notice the end to my slide above: A focus outside of your stage is harmful.

Embrace the stage of learning that you are in as a trader.  Win it.  And then and only then win the next stage.

*no relevant positions