The belatedly astronomer Carl Sagan was known for his gentle-spirited wit. One of his to a greater extent than amusing statements is every bit follows:
"If yous want to brand an apple tree pie from scratch, yous must kickoff invent the universe."
It's funny because of the juxtaposition.
You get down with a common, comforting mental pic -- who hasn't had apple tree pie? -- as well as and so sweep out to the impossibly abstract.
When 1 thinks most making a pie "from scratch," the natural vogue is to envision a kitchen counter with ingredients on it: The apples, the flour, the eggs as well as milk as well as sugar, as well as so on.
Technically, though, Sagan is correct. He has but expanded the frame to maximum degree. To really start from "scratch," i.e. nothing, yous must manifest the atoms that brand upwards the molecules of the pie ingredients... decide the physical laws that bind the atoms together... historic flow the universe appropriately for billions of years, through all the diverse stage changes as well as evolutionary cycles to convey forth apples, sugar, human sapiens, as well as so on.
It's a natural language inward cheek meta-statement with useful purpose. It reminds yous how the narrow sentiment (which nosotros oft receive got for granted) tin exclusively be inward the context of the really (very) broad... as well as also how, for those who tin run into it, the magnificent secretly envelops the mundane.
So what does this receive got to create with trading, as well as to a greater extent than specifically with "Transformational Tools"?
The purpose of this installment, Transformational Tools, is to assist "transform" yous into a successful trader yesteryear offering a suite of mental tools, technologies as well as perspectives yous tin utilisation to modify as well as grow.
Let us zoom out a bit. How does 1 move a successful trader?
What must 1 "do," inward the broadest sense of the word?
This takes us dorsum to Sagan's apple tree pie. To wit:
If yous want to brand a successful trader from scratch, yous must kickoff invent a successful trading life.
Ah-ha! See what nosotros did there?
Before yous tin bake a pie, yous must address the external layers of reality surrounding the possibility of baking.
And earlier yous tin focus on success in trading efforts, yous must expand your consciousness to focus on the life that surrounds those efforts.
You must, inward a quite literal sense, invent (and implement) a successful trading life.
Your destiny shall non hold upwards thrust upon you; yous must boldly move forth and create it, yesteryear creating the life that enables it!
An apple tree pie is baked inward an oven, which inward plow resides inward a kitchen... as well as non precisely whatever kitchen, but a detail as well as specific one.
Every apple tree pie ever baked has a unmarried indicate of origin. No 1 has ever baked an apple tree pie inward a generic void.
Similarly, a successful trading methodology is executed yesteryear a specific trader, inward a specific intersection of fourth dimension as well as space, inward the context of that trader's "kitchen" i.e. his or her life. No 1 has ever traded purely inward the abstract.
This matters because, precisely every bit 1 cannot bake a proficient pie inward a bad kitchen, 1 cannot merchandise consistently good inward an inconsistent life. And this is all really personal every bit far every bit the actual doing is concerned -- every bit personal every bit it gets.
So for you to move a successful trader, yous receive got to piece of work in your kitchen. There is no removing "you" from the equation... as well as this uncomplicated observation explains a lot.
So many failed traders were obsessively focused on the ingredients of the pie -- the parameters of the trading methodology deployed -- that they completely failed to address the solid set down of the kitchen they were baking in (i.e. the solid set down of their actual lives).
Many kitchens receive got problems. If your oven is under-powered as well as cannot acquire hot enough... or your cutting board is permanently onion as well as garlic stained... or yous hold switching recipes mid-stream, or lack the self-discipline to follow a recipe all the way through as well as expect for results... as well as so the ingredients yous receive got literally create non matter.
You volition never receive got the pie yous desire - until your kitchen problems are dealt with.
"If I could precisely discovery the perfect combination of oscillators as well as moving average crossovers... or the best commutation covert for picking pocket-size cap winners... or the ideal juxtaposition of Elliott waves as well as Gann Wheels when the Luna is inward the 7th house..."
Nope. Nuh-uh. Not gonna work. All of that stuff is component focused. Just similar the ads yous run into on Stockcharts.com or inward the dorsum of Stocks as well as Commodities magazine. This arrangement has a 92% win rate! Winning trades inward v minutes a day! No kitchen clearance, no success. That which is zealously component focused, is virtually guaranteed to hold upwards incomplete. (And much of the fourth dimension pure bullshit.)
To bake well, fifty-fifty the world shape ingredients are non enough. You must receive got a build clean kitchen, a powerful oven, as well as the right tools (mixing bowl, cutting board, knife, whisk etc) for the job.
Trading well, as well as consistently -- an accomplishment significantly to a greater extent than challenging, lamentable pie enthusiasts -- similarly requires a successful trading life. One inward which non precisely the solid set down of the "kitchen" matters, but all the rooms of the house!
Again, most people create NOT receive got this approach.
Vetting the "state of their lives," if yous volition - which inward plow cascades downwards into all sorts of things - never occurs to them every bit vital success / failure input.
The insight is non obvious. It is sure non talked most much, specially inward the trading world. The vast bulk of marketplace seat gurus, mass peddlers, arrangement hawkers et al volition never address this stuff. It is also fuzzy, or also squishy, or also far afield from tapping into greed as well as making a quick sale.
But nosotros address it hither -- as well as address it first, inward the context of the Field Guide -- because the tillage of a salubrious trading life is so important.
Those who ignore contextual life considerations, fifty-fifty if they succeed at trading for a time, are similar immature athletes living off junk nutrient as well as cigarettes. Energy as well as enthusiasm tin enshroud over sins... for a while. But the bad habits ever grab up, as well as typically sooner rather than later.
You Must Become Extraordinary
Now allow us confront some other unpopular truth. Of those who essay trading, the bulk volition fail. There is no shame inward this yesteryear the way -- the bulk of pocket-size businesses neglect too.
(As nosotros receive got said before, if yous receive got what it takes to run a pocket-size business, yous likely receive got what it takes to hold upwards a trader. In add-on to comparable success / failure rates, both favor traits such every bit determination, resourcefulness, piece of work ethic, functional capacity with numbers, as well as so on.)
But hither is the thing:
If failure is the "ordinary," or common, result...
And success is the extraordinary, or uncommon, result...
It follows yous must become extraordinary yourself to best ensure success.
According to motivational line concern writer John C. Maxwell, the successful entrepreneur fails an average of 3.8 times earlier they succeed.
We are to a greater extent than oft than non skeptical of wide stats similar that -- in that location are so many ways to misread or manipulate information -- but conceptually the gist feels right.
The entrepreneur who has shown willingness to autumn downwards as well as acquire dorsum upwards three-plus times, without throwing inward the towel, has already demonstrated an exceptional flat of conclusion as well as resilience relative to the full general human population.
And if he has "failed forward" each fourth dimension -- learning from his mistakes, remembering what non to create -- he (or she) has demonstrated an extraordinary flat of adult learning capacity.
So, again: To best ensure the odds of extraordinary results, yous must become extraordinary yourself.
But what does that mean? How tin nosotros amend define "extraordinary" inward this context?
Let us advise a definition:
The extraordinary private embraces outlier standards of human excellence inward multiple areas of life.
The ancient Greeks had a wonderful word, "arête," which, roughly translated, represents the qualities of all precisely about excellence. Via Wikipedia:
Arête (/ˈærətiː/; Ancient Greek: ἀρετή), inward its basic sense, agency excellence of whatever kind.[1] In its earliest appearance inward Greek, this notion of excellence was ultimately fountain upwards with the notion of the fulfillment of purpose or function: the deed of living upwards to one's total potential.
Sometimes translated every bit "virtue", the discussion really agency something closer to "being the best yous tin be", or "reaching your highest human potential".
Yep. It is no accident that transcend traders -- those with stellar runway records spanning decades -- receive got a really strong arête quotient, non to cite spic-and-span kitchens (well-ordered as well as well-integrated trading lives).
There is Much You Must Do...
Switching tracks for a moment: To hold upwards successful every bit a trader, yous must attain as well as deal capital. You must receive got cash flows, as well as hold upwards comfortable treatment those cash flows.
To hold upwards blunt, it takes coin to brand money. The reason, say, a Warren Buffett or a Carl Icahn tin brand $300 meg inward turn a profit on a unmarried equity seat is because they routinely set billions to piece of work inward the kickoff place.
Fortunately yous don't postulate billions or anything closed to that. Heck, yous don't fifty-fifty postulate thousands when precisely starting out. (As nosotros volition clarify inward the side yesteryear side report, "How to Build a Trading Stake," yous could start with 10 bucks if postulate be).
But you will need to think most cash flow management, whether your line concern human relationship residual has 7 zeroes or 1 null inward it, as well as the possible inquiry of how to increase your cash flows, piece managing your obligations, via money-making activities that exist alongside trading for a flow of time.
And this, inward turn, goes dorsum to a successful trading life, as well as becoming extraordinary yesteryear embracing outliers of human excellence.
You cannot hold upwards average. You must become extraordinary to succeed. For instance:
The average private is non disciplined plenty to salvage money; every bit an extraordinary trader, saving coin volition hold upwards key inward edifice your cash flows for trading.
The average private is non on transcend of their finances; every bit an extraordinary trader, yous volition postulate to know your finances within out, so every bit to know your resources as well as constraints.
The average private is prone to rationalization as well as susceptible to fantasy; every bit an extraordinary trader, yous volition postulate to cultivate a hard-nosed objectivity, as well as maintain affect with reality at all times.
The average private is bad at fourth dimension as well as unloosen energy (T&E) management; every bit an extraordinary trader, yous volition postulate to move first-class at T&E management, so every bit to costless upwards personal resources to create all that needs to hold upwards done.
Do yous see, now, how so much of trading success comes dorsum to a build clean kitchen... a powerful plenty oven... as well as the comprehend of human excellence inward the context of a well-integrated trading life?
All of this stuff is VITAL to truthful trading success... as well as nosotros nonetheless haven't touched the ingredients yet!
The deep-dive methodology aspects - entry as well as exits, seat sizing, pattern filters, portfolio management - WILL come upwards shortly enough, as well as over fourth dimension volition stand upwards for the top dog torso of DM materials.
But kickoff things first... who cares most ingredients if the kitchen ain't right!
For those of yous to whom this thinking is new, in that location are 2 ways to answer to all this - the mad way as well as the glad way.
Door #1 (Mad Way): Are yous kidding me! I precisely desire to hold upwards told where to purchase as well as sell so I tin start trading as well as brand some dough! You hateful I receive got to move dorsum as well as worry most figuring out my whole damn life as well as psycho analyzing myself as well as blah blah blah? This SUCKS!!!
Door #2 (Glad Way): Wow! I never thought of it similar this... getting my "kitchen" inward order, as well as approaching this whole thing from the perspective of inventing as well as implementing a successful trading life... this could hold upwards the puzzle slice I've been missing, which both 1) helps explicate previous failures as well as 2) brings me a big measuring closer to success! That is AWESOME!!!
Those who withdraw Door #1, don't allow it hitting you...
Remember, hard problems are your friend in highly competitive environments.
When yous seat a difficult problem, yous are closer to nifty the barrier that previously held yous back.
And when yous confirm your competitors receive got non solved this problem, yous confirm the logic every bit to why an border exists, as well as why that border tin persist.
And finally, when yous solve that difficult employment yourself - a feat your contest has non achieved -- a sustainable wages is created, quite perhaps a permanent one...
Inventing as well as implementing a successful trading life (the meta-context of "life" enveloping as well as sustaining the methodology yous execute) is precisely such a difficult problem.
Figuring out how to upgrade your personal arête quotient (embrace outlier standards of human excellence) is some other difficult problem. (One that takes cognition as well as technique as well as study, non precisely willpower as well as determination, to solve.)
And the Transformational Tools - conceptual technologies, ways of framing as well as thinking - are designed to hold upwards your rocket fuel inward that regard...
Now that yous empathize the magnitude of your destination - commensurate with the magnitude of rewards for success! - let's dive right in...
(to hold upwards continued...)