The Process..

One of the key things about any skill-based activity is the process. You need to have a certain process to find mistakes, find margins where improvement can be made, and find new opportunities within the activity. You also need to add new techniques to improve the results.

Athletes use this in so many ways and, without any doubt, traders need it too. This can make a huge difference in your trading career, and sometimes it can be the single most important aspect that could make or break you as a trader. The same goes for athletes.

That is why athletes create processes to tackle various contexts of life. Sometimes an athlete may get injured and be out of commission for many months. During that break, their physical health may decline, or their abilities may be reduced. Sometimes, there are times when they may have to be off the field due to real family emergencies, or even when they are on the field, while things are happening in the background of their life, they may experience a drop in performance. To tackle these life changes, they develop processes, each tailored to get them out of a slump.

Let’s talk about a process for improving performance. Players develop review processes to study their games and find what they are missing. Sometimes when they are performing at their best, there is a sudden slump that follows, and that's probably not due to their loss of form. That could be because sometimes the opposition studies their game, finds a fault, and exploits that. For the player in question, they may have to go back and review their games to understand what's going wrong. Over time, when they keep doing this over and over, the brain becomes extremely tuned enough to register subtle patterns that the player can then focus on to fix the issue.

I used to be a big fan of cricket, so let me cite a live example from the game itself.

Sachin Tendulkar, as we know, has been one of the, if not the greatest, players of all time. But he did not become great because of talent alone. He was great because of his ability to adapt.

There was a time in his career when he often found himself getting out early with barely double digits on the board. The problem was always the same. It took maybe about five or six matches to change this. The great thing here is that the opposition studied his games and exploited his weakness many times over the series, and he really was lured into it.

One of his favourite shots was the cover drive. He was a master at this shot and always got it right. But during this performance slump, he had lost form, where he wasn't able to time the drive well, which often got him caught behind or by the slip. He wasn't able to fix this throughout the series, and the best thing was that the opposition was really intelligent enough to exploit this weakness.

So what did he do? He simply stopped using that shot altogether. From being one of his favourite and master shots to leaving that out of his playbook is one of the greatest restraints. He started letting the balls go that would lure him towards the drive. Immediately, his performance improved, and by the end of the series, he had regained his entire performance.

This was done by following a process. Initially, he tried to fix his shot. It did not work. So his process was to avoid it altogether. The same went for the opposition: study one of the greatest batsmen's recent matches, find a fault, and exploit that.

As a trader, you need to develop a process.

A process to add new trades to your playbook. Study charts, catalogue new patterns, backtest them, and add them to your playbook.

A process to improve execution. Study your past trades and see where you can improve your trade placements, refine entry triggers, and refine patterns.

A process to analyze statistics to cut unnecessary trades or engage the market during high-probability sessions.

There are many such processes that are solely going to improve your trading results.

But what's more important is to develop processes in other aspects of your life. Just like how athletes face real-life consequences, traders are not excluded from this. Traders, in fact, face more day-to-day burnout than seasonally active athletes. Traders go into each day and need to maintain top cognitive performance to be able to even make the day count.

You may lose a loved one, or you may lose your pets. You will need to take time off during these stressful times, and unlike sports where players can channel their stress out physically, trading asks for restraint, an ability to not push. This takes huge mental capital, especially when your emotions are compromised. Hence, during these times, you may need to develop a re-engagement process.

Sometimes you may have a huge loss that could change your financial outlook for the month or even the year. You need a process to restart and review before you even think about getting back into trading.

Hence, developing a process and having it ready is the most essential part of trading. At each stage, you may need to deploy certain steps to progress in trading.

That is why you should have a template for different contexts of life that will help you through your career in trading.

Daily, weekly, monthly, and yearly processes are extremely important. Otherwise, when the market changes or life changes, you may be left in a place where you will not have a clear protocol to move forward.