[Originally published on 7/29/2014]
This weekend my girlfriend and I watched the new movie Lucy with Scarlett Johansson. Entertaining, funny and somewhat provocative, the movie describes a woman who (through a strange turn of events) develops an ultra-powerful brain.
Being that I have studied Neuroscience at the University, while my partner has studied the brain from a health perspective, an interesting debate ensued after the movie during our summer saunter home. And out of the blue….the conversation shifted to trading (I wonder why).
We’ve both trained traders, but from different fields, and we both realized there was a lesson inside the movie for those of you wanting to build a successful trading mindset. Below is our key takeaway from the movie, what we noticed about it, and how struggling traders can breakthrough to profitability.
Unsuccessful People Believe in Events, Successful People Focus on Process
In Lucy, Johansson has CPH4, a new and powerful drug, put into her stomach that is to be sold worldwide by a ruthless businessman. After being kicked in the stomach, the CPH4 releases into her bloodstream, overcoming her blood-brain barrier, causing her brain to expand in capacity and abilities. Within minutes (after a gravity defying series of convulsions), she starts to develop super human abilities (or are they ‘human’, just undeveloped in us???)
Philosophical and scientific debates aside, why do movies like this sell? Why do we constantly see movies about random ‘events‘ that turn people’s fortunes instantly – Limitless, Powder, Trading Places, Brewster’s Millions (yes, I’m old)?
The answer is, because they follow the general meme of most media, literature and culture – they focus on ‘events‘, not ‘process‘.
What do I mean by an ‘event‘? For this article, when I’m using the word ‘event’, I’m specifically referring to the end result moment in a long chain of events.
Media typically focus on events because it keeps the dream alive. Never mind the largest wealth gap in history (happening right now), or that home incomes are dropping to multi-decade lows around the world.
Events get more reads, clicks and attention, giving people the idea that in a flash of lightning they can become rich, become a world-class athlete, some super special trader, or ultra-intelligent being like Lucy.
But an untold sub-text lies underneath all these rosy ‘events’. There’s a harbinger behind each of them. That is, when you hear about an event, you don’t hear about the long process said-now-successful person went through to get that big paycheck.
A $57 Million Dollar Payday
Richard Sherman, the feisty outspoken cornerback for the Super Bowl champion Seattle Seahawks, recently landed a record breaking deal of $57 Million, becoming the highest paid cornerback in the NFL.
You’ll hear/read tons of stories, piling to the heights of Mt. Everest in the media about his big paycheck, the terms of the deal, how much it is, whether he is worth it, and how it breaks records.
What you won’t hear about is how Sherman was born in Compton (a really rough neighborhood in California), and how many people he knew were killed due to gang violence. Or how he was the Salutatorian in his High School class (second of all students academically) spending hours studying after a long day of practice, or an all-american track star, or a super late round draft pick in the NFL.
How many stories have been printed about his ‘process‘, all the hardships he went through to get this big paycheck, or how hard he worked over the last 8+ years? Compare that to the number of stories printed about his ‘event‘ and record breaking payday. I’m guessing the event articles outnumber the process articles by a margin of 10:1, maybe even 50:1.
Why? Because stories about ‘events‘ sell, and those about ‘process‘ don’t. Who wants to hear about how they have to work harder to become successful when you’re already working down to your bones? Who wants to hear they may have to put in 7 day work-weeks for 7+ years on end, when you barely make it through a five-day work-week with a family to take care of?
Few if any, but I’m not here to give you a false picture about trading. I’m here to help you become a successful and profitable trader.
14+ Hours Behind The Charts for 7 Years Straight
Outside of the members in my trading community, most don’t know I spent 14+ hours behind the charts for the first 7 years of trading, or worked 6-7 day work weeks at the broker when I was only paid for 5, or how I skipped out on many parties or weekend events on warm sunny days practicing on forex tester 2, and refining my price action skills. There was no ‘event’ behind my current success, just a relentless focus on process.
Breaking the Bank of England (An Event)
I’m guessing you’ve heard of George Soros’s big trade where he broke the Bank of England. But how many of you know the story behind it? How many of you know how he and Stanley Drunkenmiller did painstaking research for months on end, constantly got rejected by investors called upon to help finance the trade idea, or all the other work they put into it?
Simply put, popular culture (especially in trading) has been trained to think ‘events’ just happen, and that ‘process’ is less important. You have to reverse this equation, and put process first.
Process Creates Events
By putting process first, you create the grounds for events to happen. Creating a garden doesn’t simply happen by buying a bunch of plants. You need to buy good soil, build a plant box for them, dig holes and plant them, give them nutrients, pull out weeds, and make sure they get the proper amount of sun regularly. Trading is absolutely no different.
First you had to study the basics of the market and the terminology behind it. Then you had get a free demo account and learn how to use the trading platform. After this you had to learn how to read charts and understand price action in real time. Then you had to find a trading system which made sense for you, then build a trading plan, then practice reading the patterns in the market, then train to accelerate your learning curve, learn optimal times to trade, build consistency in your trading execution, build confidence in your trading mindset, and then perhaps shift to live trading.
All of the above doesn’t happen without a focus on process in trading. Only seeing the event doesn’t help you get through the tough moments, help you keep the right perspective when draw-downs occur, or pick you up after a big loss.
Process keeps your head down until you have covered the distance. It helps you to continually move forward when you want to quit. So reverse this equation, re-direct your focus on the process, on what’s in front of you right now.
In time, you’ll find that big paycheck. It is there, and many of my students are now getting that big paycheck.
For instance, one student of mine who just got $5 million in seed capital for his new trading fund, or Tony who started his own private fund after doing 110% return on capital over a year, or another Tony who made 100% return in just a few months risking only 1% per trade, which we talked about in our private members webinar, showing his real myfxbook account (image below).
I have many students trading forex successfully, but they all got there via process.
Always Preceded By This
Events do happen, but they are always preceded by process. So take the time to see where you are (and are not) focusing on process. Then build a plan of action re-directing your efforts to each of these skills, create timelines to complete them, and measure your progress until you get there.
Remember, the very underlying reason behind ‘the holy grail‘ is a pill, a one shot silver bullet, a solve-all-your-problems thing which takes you from losing money to super trader. Does such a pill exist in football, basketball, playing piano or martial arts? No. So why would you think this exists for trading forex?
Why would you think all you need is a system to be printing money out of your laptop and trading account daily? Does having the best bow make you a professional archer? No, and neither does one system help you make money week in-week out trading. Process, and focusing on the little details does.
The underlying cultural sub-text of the movie Lucy, is that events sell, but process doesn’t. Yet it is a focus on the process which gets you the big paycheck. Most of the world’s richest today got to where they were via process, not events. Many of them were homeless, or surviving on next to nothing at one point in their lives. Now they can buy a small island of Fiji.
If you have a method and road map, it’s time to dig into the trenches and do the work. The results are worth it, and so is what’s waiting for you.