There is something known as the Protestant Work Ethic, which is a concept rooted in hard work and diligence. It has been used to describe how traders feel the need to make trading feel more like the traditional 9 AM to 5 PM work day. The trading work day is highly unique. What other job offers the possibility of going into the office and leaving poorer than you were when you arrived? More importantly, what other job presents the ability to make a tremendous amount of money for doing what really feels like nothing?
This is quickly devolving into a stream-of-consciousness rant, but bear with me and it will come together at the end.
As a trader it often seems like you make money by doing nothing. Sometimes, it doesn’t really feel like you are actually working, despite how difficult trading is. For myself, I feel as though I keep track of statistics, write ideas down, and stay abreast of macro-economic developments, sector-specific news, and monetary policy not only for the obvious reason of having an edge in those areas, but also to make trading feel like work.
If you read the interview I had with Chip Kenyon last week, this might sound familiar. Chip mentioned how traders would often make a lot of money very quickly. If a trade works out, you make money, and if it doesn’t, then you lose money. While you do have to constantly reevaluate what the developing market is telling you, it still doesn’t feel “right” to make thousands of dollars or more for what seems like just sitting there. Maybe, just maybe, journaling provides you with some of that necessary work ethic so you actually feel like you deserve what you are making.
In the spirit of keeping this rant going, I quickly want to touch on another point made during the interview with Chip. It is actually not too difficult to make a good trade and make some decent money. Therefore some traders do exactly that, but then they feel that they don’t deserve the money, so they make flawed decisions that lead to losses. This is a very real phenomenon of the subconscious. The incredible irony here is that although it is easy to make one good trade, it is very, very difficult to trade well consistently, largely because of this phenomenon.
Back to journaling. I have saved all of my journals since I began trading. I have some that go back as far as 2007. They are almost all legal pads and I always kept them numbered. There are probably about 40 of them, full of notes, many which are difficult to read. While I was waiting to begin trading again this past month, I decided to pull all of them out and read through them. What I found was pretty astounding as well as enlightening. A lot of what traders go through is quite personal, so I won’t go into too much detail here. I will say, however, that there are themes in my trading which have played out consistently over the years. For example, I seemed to have some type of aversion to making money due to the nature of trading and the aforementioned Protestant Work Ethic effect.
That is something I am past now, probably because I am aware of it, and probably also because I do work harder than I ever have, only not in the ways that I expected. Another theme worth noting is how much more simple my trading strategy was when I was less-experienced. But it actually worked a bit, and in looking over my notes, I have reincorporated some of those concepts.
I had a very busy week and admittedly I had no post prepared for today. I had this idea about posting about journaling, so I started writing it and I think, in the end, it is worth publishing. I suppose I am recommending to any beginning traders that they keep a journal for multiple reasons: to make yourself feel like you have more of a real damned job, to track your own progress and clarify your thought process, and, finally, to have an archive to look back at a few years down the road and see how you have developed.
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