May 092011

First, I want to apologize for the lack of updates.  I got out of the habit of regular blogging during our trip and it’s been hard to get back into the habit.

I’ve found that my hobbies go in phases.  Before moving to France, learning French was my main hobby, with music a close second.  After I arrived in France I continued these hobbies, and I was really into songwriting and composition.  After a bit of frustration with my lack of progress in songwriting I got into painting.  When it became hard to progress to the next level in painting I got into photography. And after photography it was.. trading.

Trading has been my main focus for the past three years.  And I have become a little burnt out.  It’s becoming a business instead of a hobby and as a result I find myself escaping form in all with music once again.  I’ve been working on setting up my home recording “studio”.  And lately I’ve been very interested in Irish Music and learning to play it on my tin whistle.

I think the progression from one hobby to another, and possibly back to a previous hobby, is a healthy thing.  But at the same time I think those who rise to become truly exceptional are those who are passionate about one thing and are able to remain that way for a very long time.  How long?  According to Malcom Gladwell in his book Outliers, the number is roughly 10,000 hours.

So here is an interesting calculation:

3.0 years * 365 days/year * 8 hours/day = 8,760 hours.

Coincidence?  I don’t think so.  It’s hard to estimate just how much time I have spent on trading.  I think 8 hours/day including weekends is a good estimate.  During a lot of that time I have worked 12+ hours/day  on trading so that would make up for the days where I worked less.  In any case I’m definitely approaching to 10,000 hours and I don’t think it’s a coincidence that I’m starting to become consistently profitable.

Trading is insanely difficult.  What other hobby/professional can one practice for 10,000 hours and not be exceptional? If one spends that much time on any other hobby they would be very competent.  Play chess for 10,000 hours and you’ll be competing in chess tournaments.  Play 10,000 hours of poker and you’ll probably be winning online poker tournaments.  Play a musical instrument for 10,000 hours and you’ll probably be playing in local concerts.

So you would think that if you trade for 10,000 hours you’d be making thousands of dollars right?  I’m averaging $100-$200/day lately.  I don’t really feel exceptional but I know I’m very close to making it.  I’m gaining confidence and my results are improving.

I’ll write more about my results last week in the next post, but I will say that trading has become work.   It’s a job.  I have to force myself to update my journal and to review my charts after each session.  It’s no longer fun & exciting. And when I finish trading for a session I quickly forget about it and do other things.

However I’m not complaining because all of the advantages (working at home, working less hours, having my performance graded by the market instead of a “manager”, being able to work anywhere in the world, etc.) are simply awesome.  Notice making millions wasn’t in the list.  Sure that will be great and I used to dream about that but now that I see how hard trading really is, I will very happy if I can make the equivalent of my former consulting income.  If I can make more then that’s icing on the cake.

One more thought on 10,000 hours..  I’m usually a quick learner but I really went down the wrong path in the beginning.  Indicators & automation probably wasted at least a year of that.  So I’m not saying everyone needs 10,000 hours to be profitable.  But I do think everyone should plan on at least a year or two and possibly more.  If you’re not willing to work 8 hours/day for a few years then I think trading is not for you.

Happy Trading!


  9 Responses to “10,000 hours revisited”

  1. Hi,

    Good post and points.
    For how long have you been consistent with one method and approach? According to what I read in your blog you kinda tried a lot of things, assume you started right away with volume profile would it changed your results (say becoming consistently profitable after a year)?

  2. Everyone has to find out what works for them and what I do now uses a lot of market & volume profile but I also combine that with my proprietary work in volume analysis. I found it impossible to trade like FT71 consistently so I took what I learned from him and merged it into my own.

    I know others who cannot trade like FT71 either. So what I’m saying is it takes time to test out different things and find out what works and come up with something that works for each individual. I think one year isn’t enough. I’ve been studying FT71 for about 9 months now and what I learned from him is only a part of it. I still use concepts from eminiwatch for example and I studied eminiwatch method for over a year, probably a year and a half.

    Then there is Dalton & market profile, the DOM, footprint, time & sales, etc. So much to learn. I think 2 years is a better guess.

    I don’t say this to discourage anyone but to the contrary – everyone should know what they’re in for before embarking on the journey. If I had known I would have stuck to my computer consulting. I think everyone thinks “I’m smarter than average, I’ll pick it up quicker” etc. that’s what I thought.

  3. I forgot to answer the first part of your question: My method has constantly evolved. Last week was the first week I really traded real money this year. Up until last week I was on sim, testing new ideas, tweaking things, etc. Going from an FT71 approach to a combination of that with what I was doing last year..

  4. I learn a trading almost 5 years with some breaks, now I’m on break even stage.

  5. Wicked – Thanks for sharing. I’m glad you are at the break even stage as this is the last stage before the profitability stage. The catch is that the breakeven stage lasted a lot longer for me than I thought it would. And after that, the “2 ticks avg/trade” stage lasted a long time too. 😉 Good luck and if you would like to share your experience in more detail please let me know.

  6. What you say totally make sense, I also find ft stuff is good in the macro level but miss the micro/tactics, so is dalton stuff. it would be interesting to hear how you incoporate eminiwatch stuff.


  7. Valyouw – I think how I incorporate eminiwatch concepts would make a good topic for a future post.

  8. Sure, looking forward…

  9. [quote]f I had known I would have stuck to my computer consulting. I think everyone thinks “I’m smarter than average, I’ll pick it up quicker” etc. that’s what I thought.[/quote]

    The vast majority of retail traders came from some successful prior professions, many are IT guys who are extremely smart with technologies and they all believe they can become a profitable trader because they are smarter than the most and they have proven themselves to be winners in their filed. Same applies to other highly competent and “successful” professionals in medical, law, engineering, finance, accounting, and other worthy professions. As we all know, most of them never become profitable traders. It was their belief that their skills and competencies will guarantee their success in transitioning into the profession of trading that prevented them from actually making the successful transitions.

    The prop firms usually like to hire new graduates with no prior experience in anything (except for sports and other competitive activities), and the success rate of these “unexperienced” people becoming profitable traders is much, much higher than the experienced professionals who tried to made the transitions.

    The statistics of how many retail traders never become consistent is very discouraging, this is a tough business to be in, definitely agree with you on that. I am very glad to know that you have beaten the odds to become consistently profitable! You are setting a very positive example for many who are still striving to making the turn.

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