Michelle B submits: In his latest book, Enhancing Trader Performance, Brett Steenbarger said that it is important to find one's niche in trading. If we do that, then we will be uniting our talents and interests with trading. Because we will be enjoying ourselves, we will be more receptive to following the discipline required for the development of our trading skills. He delightfully---delightfully because we all want to enjoy ourselves while learning and working---says that traders need to play more, to experiment with trading styles and to spend time discovering and creating their niche. In other words, traders need to go feline. Cats are the champions in having fun while learning what they need to do to survive.
After years of using patterns in trading, my recognition of them still brings pleasure. I have become a gourmet in this regard; not just any pattern is suitable for my discriminating palate, just the best and the most delicious. If I use only thirty-minute narrow-range bars and not focus on the shorter time frames where the patterns can be identified clearly and shown in more detail, I would have passed out from boredom a long time ago.
In the case of my VCLK trade, a different kind of trader would have exulted in watching for the gap filling at the open, before any intraday pattern formed and rode up that first leg. If I did that, it would feel like my teeth were being pulled without anesthesia---very painful. I would feel as if I was blind and helpless without an intraday pattern to guide me. Despite being a chart-pattern lover, swing trading from daily chart patterns and a watchlist would also be boring for me. Though I use the historical charts for support and resistance, it is the dynamic, streaming intraday chart patterns which inspire and stimulate me with their unfolding in real time. I like doing preparation shortly before taking a trade and holding a trade for the briefest period of time possible.
However, I do not enjoy scalping because not only are there no patterns involved, I want as big as a move as I can get in the shortest period of time---I rather do one or two trades daily then dozens. I also enjoy reading news and basic information about stocks, both aspects which are used in my finding candidates premarket.
David, from Trade-Ideas, had asked following my stocktickr interview, if any of the skills I learned from my previous jobs came in handy for trading. My answer was since I learned so many skills, I felt confident I could learn yet another one. I realize now that my answer would have been more accurate if I replied I took those jobs because of my passionate interests: the ferreting out, processing and applying of information, clear communication, psychology, interest in history, love of science, and appreciation of all art and its spontaneous expression--both its form and content. Therefore, my style of trading accommodates all of those interests, and that is why it works for me.
However, it took quite awhile before I found my niche; in part because I was not as playful as I could have been as I was so serious about acquiring discipline. I did not realize if I focused on incorporating my interests and talents into trading, the discipline would have been much easier to acquire. And because none of my previous jobs by themselves satisfied my batch of interests, perhaps that is why I went from one job to another, playing around, so to speak. Happily, trading satisfies all of my preferences, interests and talents.
My niche, obviously, cannot be yours. We are all different in having our own melange of talents and interests. You could perhaps use some aspect of my niche, but it is up to you to discover and make your own. In this way, there will be a rewarding fit between your trading style and you, making the following of discipline inviting and not a chore---like how Tom Sawyer got another kid to paint the fence by describing the act of painting as fun.
Yet another nice one. I've heard "My niche, obviously, cannot be yours" but never understood it. Now that I'm in my second month of daytrading, I have begun to undertand what books like trading in the zone and other bloggers talk about.
Nice job and keep up the good work. Also, we (i think i speak for many) would like to thank Mike for getting you on.
Wow. What a great article. It is clear that you operate in a 'zone' that Dr. Brett describes as always present in extraordinary athletes. As it's been said, 'amateurs practice until they get it right. Pros practice until they can't get it wrong.' I'm also glad my Liberal Arts major and 3 hours in Intro Psychology allowed me to ask a lingering question. Look out Brett!
Great post Michelle. That jumping from job to job thing sounds a lot like me back in the day.
Lloyd Philip, David, and Michael--Thanks, guys!
Michelle, very nice article. I just interviewed Brett, and he and I couldn't agree more with what you say.
You seem to be in a clear Learning Cycle when you write things such as "since I learned so many skills, I felt confident I could learn yet another one." and "I took those jobs because of my passionate interests".
Keep moving forward
Nice post Michelle. There does seem to be an infinite number of trading styles to match an infinite number of personalities ... and you seem to have found your sweet spot.
As well as knowing and mastering their niches I believe successful traders also have a genuine passion for trading, over and above the end goal of making money.
Alvaro, If I was the type to wear tee-shirts with slogans emblazoned on them, my favorite would be:
AGING MINDS DO SO MAKE BRAND NEW NEURONS!!!!
Your site is very appealing and interesting to me, and I have just started browsing through it.
Just as I prefer to get my physical exercise by just doing my daily routine--gardening, walking, and using my own physical labor instead of relying on labor-saving devices--I also prefer to use the same method with keeping my neurons fresh and new by using my brain when I work.
I will supplement those basics with extra-curricular activities like yoga postures and breathing, selective weight training, and researching information on the Net and discussing topics with other net users, but my bread and butter is my basic, routine lifestyle.
It is great when I get responses to continue what I am doing because my state is one of flux, and not some kind of static mastery.
Caravaggio, There has been discussion at various trading blogs about the importance of emotion and passion in trading, and how one can tell the difference between the positive emotional/passionate stance and the destructive neurotically/addictive based version. Dr. Brett has written a couple of useful and clear posts on this topic.
Some traders think that they must be void of emotions. But that is not the case. It is a question of nourishing the postive and life-enhancing emotions and channeling them so a trader can be at peace with his goals and self so a quiet passion---but also a deep and profound one--- can be developed and sustained.
dear Michelle,
ive read your posts several times now and i have to say that it helped me a lot...your approach seems to be similar to what i used to do, that was, i scaned through the daily charts to find a market, that show conditions which point to a certain intraday movement the next day, which i then try to explore on a very shortterm basis...example: 4 or 5 downdays in a row...market opens and break out below the recent daily low...i then switch to the 1min, ready to trade a reversal and uptrend on the 1min in a very agressive manner...in one word, im a daytrader, but unlike many daytraders outside the stockmarket, not a 1-market daytrader
now the thing was, that 3 month ago i was experimenting with a trend following approach on a 1h charting interval but just could get a grip on it...i forced myself to adopt the approach, but i wasnt working...i drove me crazy..i was trading in a sadly manner
your post about your trade in VCLK and the niceland has openend my eyes finally to return to the approach im specialise it and the nice i already had found but wasnt aware of at that point
i have to excuse for the long post and my bad english
happy trading
Peter
Hi Michelle, this may sound like a contradiction, but I am trying to retain and feed the raw passion while keeping specific emotions (during actual trading) as controlled as possible.
Also, and this may be a little paradoxical, I find that some emotions that are positive in other aspects of my life can have negative effects on my trading, so I am trying to tread very carefully in this respect.
Still, I like the idea of channeling the positive and life-enhancing emotions in to trading but I am not yet ready for that. I am still far behind you, in terms of state of mind and evolution, but each to their own pace.
: )
Hi Peter. Since your style is very similar to mine, I can well understand the attraction of it.
Perhaps you left it for a while because it was not a niche completely formed, something was not right about it---something was missing or present that was rubbing you the wrong way. So maybe your leaving it was an attempt on your part to fix some part of it. Now that you accept that you had a good thing going, see if you can fine-tune your great niche even further, so you won't be tempted to abandon it.
Think of your basic approach as a nest or a niche, a foundation upon which you can add a sunroom or spa!
Caravaggio, each one has the solution to one's problems within one's self---though the identification of the solution may involve going on a tortuous and bumpy route at times.
So even though we may all trade like idiots sometimes, we are the wise ones also because we are the only ones that can not only figure out the best solution, but much more importantly, to apply it.
As you said, go at your own pace and build trust and confidence in your ability to trade productively GRADUALLY. Use whatever limits that you deem proper and fitting for yourself as you begin to get a handle on solving problems.
Regarding your noticing that some positive emotions that work well outside the turret do not inside---Mark Douglas in 'The Disciplined Trader' covers that aspect well, and my post 'Out of the Skill(let) Into the Fire' (click on Michelle B's posts under categories to the left of this site to access this post) is basically a distillation of his wisdom.
Some 'postitive' attitudes that get rewarded outside of the turret are gung-ho enthusiasm, ostentatious display of raw ambition, and aggressiveness in targeting and achieving goals. Contrast that with a trader 'in the zone'---grounded in his own quiet identification of his niche, buttressed by his calm trust and confidence that he will do what his approach requires, and the continuous pleasure he derives from fullfilling himself.
Michelle, great you are enjoying the site. It is fascinating to know that every single brain is growing/ developing/ aging, creating new neurons and connections, and, most fun of all, that our actions determine to a large extent that process. Brain Fitness is coming.
Good response to Caravaggio. Emotions are signals, that can help our decision-making if we manage them properly. Emotional self-regulation is important. Equally important is to train ourselves to get into The Zone of optimal learning and performance-in that zone, of focus and flow, our emotions become our allies.
Just read the earlier 'Out of the Skillet' piece Michelle...your brand rational common sense hits home once again. I have so much to work on that it's almost like starting over, but that is no bad thing.
On the topic of the physiology of the brain, I love the idea that we can alter or rewire our brains just by the act of thinking, learning and going through new experiences. Also, I don't have any idea about how the changing dynamic of the brain affects our epigentic code, but I would like to think that there are some changes at this level when we train and feed our brains.
Ah, nothing more fascinating than Epigenetics!
http://www.bbc.co.uk/sn/tvradio/programmes/horizon/ghostgenes.shtml
I love this quote from the above link:
This work is at the forefront of a paradigm shift in scientific thinking. It will change the way the causes of disease are viewed, as well as the importance of lifestyles and family relationships. What people do no longer just affects themselves, but can determine the health of their children and grandchildren in decades to come. "We are," as Marcus Pembrey says, "all guardians of our genome."
I am 'convinced' that through time 'the genius gene' will be discovered to be a gene that though repressed in females, are carried by them to be expressed sometimes in their male offspring. Eventually this genius gene will be turned on in all females! teehee.
I saw that Horizon programme...it was amazing. In my schooling I was taught a very deterministic view on genetics, so it's reassuring to find that epigenetics says we play a much greater role in shaping out genetic destinies. Pembrey's quote that we are 'guardians of our genome' is great.
A few more links on the topic:
http://www.wired.com/news/medtech/0,1286,68468,00.html
https://notes.utk.edu/Bio/greenberg.nsf/0/b360905554fdb7d985256ec5006a7755?OpenDocument
Okay, I'll stop know, because I am steering these comments off on a tangent!
What a great discussion. What are implications of Epigenetics on trading? well, maybe we have to be careful with language. Instead of "I found my niche", we should aspire to claim that "my niche and I created each other". The dynamics of both ourselves and the systems in which we choose to play are simply fascinating. Happy dancing!
Alvaro, I just adore your, "my niche and I created each other," because that is how it feels to me but my language failed me. Dr. Brett's positive feedback loop is somehow a part of this also.
Caravaggio, I added your great links to the Wikipedia article for Epigenetics under the category of external links. All us Wikipedians thank you!
Wikipedia article on biofeedback: http://en.wikipedia.org/wiki/Bio_feedback
Hola Michelle,
Yes, of course, constant feedback is what enables than mutual impact.
Being a huge fan of Wikipedia (not a contributor, until now), that Wikipedia entry on biofeedback is not the best I have seen. Neurofeedback is still quite controversial; biofeedback has been used for years by athletes, the military...and in multiple serious clinical studies. Heart Rate Variability biofeedback is the best tool we have found for stress management. There are many randon claims out there, but also serious data.
My colleague Caroline and I were in fact preparing an entry for Wikipedia on Brain Fitness, and maybe we should also add value on the biofeedback front. Do you have any suggestion on how to best proceed? Neither of us have written for Wikipedia before. Thanks
Alvaro,
I agree about the Wikipedia article regarding biofeedback being in need of some expert editing. And an entry on a new topic would be even better!
Editing an already existing article will teach you the basic editing skills.
First, you need to open up a Wikipedia account, it takes a few minutes and of course it is free. Then you need to learn the basic editing techniques.
My Wikipedia id is Gondola. On my main page you will see several Wikipedia links explaining the basics of editing. We can discuss any questions you may have via my discussion page. I will check it daily for any correspondence from you.
See you there hopefully.
Alvaro, apparently you can edit without an account now, but an account allows other Wikipedians to talk to you and discuss projects. On the link, below just click under the title, anyone can edit, and you are given the basic info to start:
http://en.wikipedia.org/wiki/Main_Page
Hola Michelle, my colleague Caroline Latham has already starting writing a Brain Fitness entry and has a Wikipedia account, so she will be the one contacting you. Thanks, and talk to you!
Michelle,
You may enjoy this visual display with an example of emotional self-regulation
http://www.sharpbrains.com/blog/2006/11/21/emotional-self-regulation-and-biofeedback-freezeframer/
Enjoy the week, and talk to you!
PS: Caroline is travelling, so am not sure when she'll contact you. No hurry. Thanks!