Mastery

Mastery

By Lucas Tarigal

Our brains are wired in a way that repeated actions become effortless over time.  In other words, practice makes perfect. Seems so simple, yet the subject of mastery has many hurdles of understanding that impede people on the path. The best of the best have been trading for decades, yet we expect to be like them in a fraction of the time by reading their books. The best traders also created their own custom indicators, personal technologies and settings, and habits, yet we expect to be able to copy them and mimic their results. We get frustrated, sad, and discouraged when our expectations are not met instead of taking a long-term view of our results.

To give a personal example, I have literally lost my mind over a couple hundred bucks. I expected the market to do one thing, it did another, and I went crazy, changing everything in my life around because whatever I was doing was clearly “wrong.” This is like reaching the point where you do not care anymore! You thought you had a working system, a working method, but all you see is your equity line going down. If this next trade isn’t a winner, you do not know what you will do, the pressure is mounting and you feel like everything you do is wrong. The trades you take go against you while the trades you paper trade make money. You have tried everything, you have tried to trick your mind, trick your system, go around your rules, make up new rules, and even throw out tried and true rules. Everything you have done doesn’t work, and you are ready to call it quits, and for good this time.

I have been there, and recently (within the past few years). This experience feels uncomfortable in the extreme, but within it are the roots of trading enlightenment. You can call it whatever you like, the wall, rock bottom, or the dumpster. I got to a point where I literally had to try everything I could think of (and lose at it) before I finally understood the market truth. Even now, part of me flares up and says “ahh, but maybe if you just try this, you can beat the market, and all your dreams will come true (HA!).” When you hit bottom, it’s definitely a low point, but it’s also the most transformative time you will have in your trading career. This article is going to dive into the subject of mastery and how it can transform your life, and your trading.

What is the difference between someone who is a casual trader and someone who is a professional trader? A casual trader is someone without commitment to the path of trading mastery. Sadly, there is no such thing as a casual trader. It would be nice if there were, then we could just get on the computer here and there, make some trades, and the money would flow in. There is no such thing as a casual trader in the same way that there is no such thing as a casual black belt. A casual trader is just a gambler, who doesn’t have rhyme or reason to his trades, or only a thin outer layer of rationality that comes after the fact. If you are a trader, you are in it for mastery, and nothing else. Ironically, a master trader appears to be a casual trader because everything he does seems to be inspired and effortless (which it is). Behind this appearance of ease and casualness are years of time and practice that have gone into his craft.

When we shift from being a casual trader to a professional trader, our focus shifts from “becoming” to “being”. This shift can take quite awhile.   For me it took a few years to realize that what I had been doing this whole time was only dressed up gambling. In a July 09 update, I shared this quote: “Human suffering can largely be attributed to a constant state of becoming instead of a state of being.” This state of “becoming” has been a big part of my trading journey. Most of the time, the thoughts running through my head were all about how to become a great trader, what a great trader did and thought, and what life would be like when money was not an issue. This focus inevitably led to losses and suffering. If you are always “becoming,” your mind constantly needs EVIDENCE. There are times in trading, sometimes long periods of time, where nothing happens and small draw-downs occur. Depending on your trading style, a single day can make your whole year, or several years: there is little consistency in profit and loss. So a focus on p/l, and a constant need for evidence can lead you (as it did me) to put trades on that are not in your best interests, consistent, or have any real edge to them. What I learned was to shift my focus to “being” instead of “becoming,” and to accept the kind of trader I was at this moment. Your mind gets out of the game of looking for the market to give you something it cannot give you.

Mastery is the path you walk when several elements come together that create the experience referred to as “being in the zone.” These elements are complete focus on the now, detachment, and enjoyment. When you are completely focused on the now, your focus shifts to “being” instead of “becoming.” This means that you focus on the quality of your creation instead of the ends that result from your creation. So for trading, instead of thinking about the money you will make, or trying to make the most money from some trade (and beating yourself up when it’s not perfect), you focus on executing flawlessly within your method, and adhering to your rules perfectly. You may find your mind says “yes I know the rules say to do X, but the market has shifted in a fundamental way and if I want to make money on this trade, I need to do Y.” Money is no longer the focus, only flawlessly executing your trading plan. If the market has shifted in a fundamental way, then you can change your trading plan later after thorough research, but for that trade, you are completely focused in the now.

When you are completely focused in the now, detachment comes in the form of allowing this trade’s outcome to just be without any personal involvement. Attachment is defined as using some outside object, person, or event to define an inner state on a consistent basis. When you are unattached, nothing the market does has any reflection on how you feel as a person. Focusing on the now facilitates this detachment because when you are only concerned with this step in a journey of unknown length, judgment falls away. You cannot be attached to something and take it personally without first judging that thing. We are so used to judging losses as “bad, must avoid,” that we lose our perspective. Say you traded for five years unsuccessfully, losing on average $1000 a year. Society would say you are a failure, yet this could be EXACTLY what you needed to then start running your own successful hedge fund where losing $5000 means literally nothing. I bet if you had asked that person during his losing years whether he was practicing for success, he would have a very different answer for you then if you asked him three years after running a consistent hedge fund.

Enjoyment comes from detachment. When you reach the state of detachment after completely focusing in the now, you then begin to enjoy yourself and what you do. When you play a game and you do not care whether you win or lose, you find the fun in that game, and in life. This works as a positive feedback loop, which is one of the greatest feelings you can experience in this world. Instead of spiraling down into despair, your enjoyment encourages you to focus in the now with more energy, feeding your enjoyment. Eventually this cycle creates bliss, which inspires service, bringing true fulfillment. Who knew trading could bring such lofty states of being, right? The fact is, it’s not trading that is doing it, but the path to mastery!

I have been talking about trading in this article, but you can sub in anything, and if you bring these three elements and your dedication to the path to that thing, you can arrive at that blissful point.

Let’s look at the actual path of mastery, which looks something like this:

This is a picture I worked up in Photoshop that was inspired by Mastery: The Keys to Success and Long-Term Fulfillment (which is under the recommended reading list). The Y-axis can be interpreted as skill level, the X-axis as time. As time goes on, skill level rises, then falls back slightly and plateaus. This path will be your life, and your bliss, if you choose to dedicate yourself to it. You will experience longer and longer plateaus, but will always advance in skill level.  There is no end of the road, for every mile you pass, two more show up. The slight fall in skill is important.  Most people do not realize it is part of the path, and feel emotion when it comes. When you have made some significant advancement in your practice, soon you will find that what you learned, or your new skills, will degrade a bit. This is not something to be worried about, because eventually you will advance again, and a new, higher plateau will be reached. There are tons of cycles and mini-cycles we all experience on a daily basis, so realizing that everything contributes to your path of mastery (even the uncomfortable things) is a HUGE step in actually staying on the path of mastery and reaching that point of enjoyment. Once you realize that even the bad days are all right, then you will have real confidence in your ability to always do the right thing for yourself. You will have a long-term perspective that sees a rising and lowering tide of skill laid upon higher and higher plateaus of greatness.

An exercise for “Mastery” is a bit hard for me because this article is so ethereal in nature, and mastery is such a long-term subject. What I came up with are a couple pointer questions to help you determine whether you are on the path of mastery in your practice, or whether you are a casual practitioner.

•When doing your practice, do you feel a sense of feverishness that wants to get certain actions over with as fast as possible?

Sometimes, we have something that we do on a daily basis, but for whatever reason, today you just want to get it over with. For me, checking through daily breakout stock patterns sometimes gets “boring,” and my mind wants to go through it as fast as possible (almost like “work” as used in the common American vernacular). This sense of feverishness or boredom is a part of your mind that is a casual participant, and not committed to what you’re doing. When you feel this, bring your attention back to what you are doing, and take LONGER to do what you wanted to rush through. This rewires your brain so that whenever you feel like lowering the quality of an action you are doing, you instead increase the quality more then it normally would be.

•When you perform an action repeatedly, but with lower quality, do you beat yourself up over not performing as well as you used to? Do you make excuses and find reasons for why it’s different this time?

Some days the sun shines, some days it rains. There are multiple processes affecting your mind and body all the time, most of which you have no conception of. You may think you know the exact reason something is happening, but you don’t. Chaos Theory tells us that something as insignificant as a butterfly flapping its wings can create typhoons around the world. When was the last time you saw a weatherman saying Katrina was caused by a small Monarch flying around in southeast Sydney. Let go of your attachment and resistance to changing skill levels. Know in your heart that you invariably will get better overtime, and allow the days when you do not perform well to pass into the gaping maw of the past. What you resist, persists, and if you resist and get angry over any hiccups in your performance, you will find those hiccups and mistakes become your everyday life. Shift your focus.

These questions should point you in the right direction. I will leave you with a quote that I absolutely love, and it is THE SECRET TO TRADING. Yes ladies and gentlemen, today you will get the secret, absolutely free, what a treat! Enjoy

“The Holy Grail of the market is nothing esoteric or secretive; it’s that nothing the market does has anything to do with you. As a trader, going home at the end of the day and not blaming yourself for the day’s events is The Holy Grail. When you possess the Knowledge of the Grail, you will also have the humility to accept that your successes carry the same stigma as your losses: None.”

(This quote is an amalgamation of my own writing and the writing of  Sir Grail from The Daily Worden Report from Telechart, April 1st 2009)

Love,

Lucas