Top 3 Reasons Traders Fail to Reach Advanced Levels - A Manager's Point of View - Psychology and Money Management | futures io social day trading
futures io futures trading


Top 3 Reasons Traders Fail to Reach Advanced Levels - A Manager's Point of View
Updated: Views / Replies:1,345 / 11
Created: by MacroNinja Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Top 3 Reasons Traders Fail to Reach Advanced Levels - A Manager's Point of View

  #1 (permalink)
Elite Member
Buenos Aires Argentina
 
Futures Experience: Advanced
Platform: NT, MT4, Sierra
Favorite Futures: S&P, Bonds, Crude, FX
 
Posts: 250 since Sep 2014
Thanks: 37 given, 239 received

Top 3 Reasons Traders Fail to Reach Advanced Levels - A Manager's Point of View

Trade Psychology Thoughts from a Managers Point of View

A bit of background for this post: I've spent the last 90 days on boarding 4 new traders for a prop firm (3 of which are left). After attending a management seminar last week, we decided to review the firms systems and processes to determine what improvements could be made at a management level. I thought about the struggles we were facing getting trainees over the hump into fully qualified desk positions, and these are my top observations.

1. Let's talk a bit about checklists. Veteran surgeons and pilots still use them after 30 years of experience to enforce consistency. Would you sit on a plane from one that didn't do a pre-flight safety checklist? How good are those procedural checklists that you have?

I often find it interesting that someone who is a complete novice (after about say 3-6 months training) tens to outperform an intermediate level trainee (9-12 months training). I generally find that the novice is being very diligent about their pre-market prep work ticking off every box, checking the economic data, reviewing all the overnight reports, etc.

[For reference, people are on demo for the first three months, need to show about 5% return on capital within the risk metrics before being put on a small live account, then needing to show 5% return on capital on the small live account before being placed on a dedicated desk with a specialized market]

However, the intermediate trainee often starts to feel they have the "hang of things" after about 9 months and hitting their numbers for the first few month. At that point, they often start rolling up to the computer 15 minutes before market opens, and just starts to push buttons, or rushes the prep work because they think they know it all intuitively now and don't need to do the analysis. As a result, the performance starts to dip in the red right as the new trainees are starting to hit their quotas (in the green)

2. Lesson #2: Coaching itself is a process. This is more of an observation about the senior traders who the trainees are shadowing than about the trainees themselves, but probably applies to "self coaching" concepts. Don't "wing" the coaching process. I find that when we don't make the training and feedback systematic, something gets missed in the foundation training that causes confusion. e.g. are they simply forgetting the proper math of calculating market pressure because someone forgot to cover it? Was the PMI data release trade plan miscalculated because of wrong inputs?

Are they not even going through the daily review because the senior's gotten lazy? Make the debriefing process as systematic as possible: what could have been done better, what mistakes should be corrected. Most importantly, measure how quickly adjustments are being made when performance numbers are missed. (And if those same mistakes are still being made over and over again, maybe that trader needs to be cut)

3. Are people practicing in the game or are they practicing before the game? (Maybe a bigger question is whether they are even practicing at all)

I often find that the intermediate traders who have plateaued off in performance suffer from a lack of continued practice and training. Much like in basketball, even if you're a solid inside player, that doesn't mean you can't improve your jump shot. For the trading world, sometimes this means that a good scalper should be improving their macro analysis skills and vise versa instead of being lazy and stopping their practicing of new skill sets.

However, the practice has to be done in the right way, which means not in a live setting where there are funds at risk (both because this is a bad business practice for the P&L, and also because people can't focus on the mechanics of execution when the emotions of risk come into play).

This is obviously not intended to be a comprehensive list, but simply my observations made over time as a manager.

Reply With Quote
The following 22 users say Thank You to MacroNinja for this post:
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Market Wizard
London UK
 
Futures Experience: Beginner
Platform: CQG
Favorite Futures: Futures
 
xplorer's Avatar
 
Posts: 3,041 since Sep 2015
Thanks: 6,544 given, 4,801 received
Forum Reputation: Legendary



MacroNinja View Post
Trade Psychology Thoughts from a Managers Point of View

A bit of background for this post: I've spent the last 90 days on boarding 4 new traders for a prop firm (3 of which are left). After attending a management seminar last week, we decided to review the firms systems and processes to determine what improvements could be made at a management level. I thought about the struggles we were facing getting trainees over the hump into fully qualified desk positions, and these are my top observations.

1. Let's talk a bit about checklists. Veteran surgeons and pilots still use them after 30 years of experience to enforce consistency. Would you sit on a plane from one that didn't do a pre-flight safety checklist? How good are those procedural checklists that you have?

I often find it interesting that someone who is a complete novice (after about say 3-6 months training) tens to outperform an intermediate level trainee (9-12 months training). I generally find that the novice is being very diligent about their pre-market prep work ticking off every box, checking the economic data, reviewing all the overnight reports, etc.

[For reference, people are on demo for the first three months, need to show about 5% return on capital within the risk metrics before being put on a small live account, then needing to show 5% return on capital on the small live account before being placed on a dedicated desk with a specialized market]

However, the intermediate trainee often starts to feel they have the "hang of things" after about 9 months and hitting their numbers for the first few month. At that point, they often start rolling up to the computer 15 minutes before market opens, and just starts to push buttons, or rushes the prep work because they think they know it all intuitively now and don't need to do the analysis. As a result, the performance starts to dip in the red right as the new trainees are starting to hit their quotas (in the green)

2. Lesson #2: Coaching itself is a process. This is more of an observation about the senior traders who the trainees are shadowing than about the trainees themselves, but probably applies to "self coaching" concepts. Don't "wing" the coaching process. I find that when we don't make the training and feedback systematic, something gets missed in the foundation training that causes confusion. e.g. are they simply forgetting the proper math of calculating market pressure because someone forgot to cover it? Was the PMI data release trade plan miscalculated because of wrong inputs?

Are they not even going through the daily review because the senior's gotten lazy? Make the debriefing process as systematic as possible: what could have been done better, what mistakes should be corrected. Most importantly, measure how quickly adjustments are being made when performance numbers are missed. (And if those same mistakes are still being made over and over again, maybe that trader needs to be cut)

3. Are people practicing in the game or are they practicing before the game? (Maybe a bigger question is whether they are even practicing at all)

I often find that the intermediate traders who have plateaued off in performance suffer from a lack of continued practice and training. Much like in basketball, even if you're a solid inside player, that doesn't mean you can't improve your jump shot. For the trading world, sometimes this means that a good scalper should be improving their macro analysis skills and vise versa instead of being lazy and stopping their practicing of new skill sets.

However, the practice has to be done in the right way, which means not in a live setting where there are funds at risk (both because this is a bad business practice for the P&L, and also because people can't focus on the mechanics of execution when the emotions of risk come into play).

This is obviously not intended to be a comprehensive list, but simply my observations made over time as a manager.

A useful post, although it could be argued this is more about a company's management of processes and ethos than it is about psychology/money mgt.

I especially liked the bit about coaching intended as having a focus more on the coach than the coachee. Too many companies, IMO, assume that because someone knows how to do something, then they must be able to pass on that knowledge by simply talking to other people. Nothing could be further from the truth.

I experienced this situation many a time, although only once in the trading field. Unfortunately the mentors scored pretty poorly because of inexperience in mentoring.

Only do the most serious firms ever take the time to think about how to train mentors. I hope your post helps highlight that.

Reply With Quote
The following user says Thank You to xplorer for this post:
 
  #4 (permalink)
Elite Member
Buenos Aires Argentina
 
Futures Experience: Advanced
Platform: NT, MT4, Sierra
Favorite Futures: S&P, Bonds, Crude, FX
 
Posts: 250 since Sep 2014
Thanks: 37 given, 239 received

Training traders to be trainers (what tongue twister!) for sure is more difficult than merely training traders. @xplorer, I agree that the intention of the post is mostly to share the view from the management standpoint and hopefully people can glean whatever value they need.

Maybe to highlight the "psychology" piece summarize it a different way: it is ironically the initial success that people achieve that causes them to start failing the next series of breakthroughs. If you'll permit me one Star Wars analogy, it's like Skywalker telling Yoda that he's not going to finish his training and jump straight into fighting Darth Vader. Does Luke now have a few skills up his sleeves? Yes, but that feeds a sense of over confidence that the training either doesn't need to be completed or one doesn't have to train as hard during the next phase to achieve mastery.

Reply With Quote
The following 3 users say Thank You to MacroNinja for this post:
 
  #5 (permalink)
Elite Member
Canada
 
Futures Experience: Beginner
Platform: NinjaTrader
Broker/Data: InteractiveBrokers
Favorite Futures: NQ
 
SoftSoap's Avatar
 
Posts: 594 since Aug 2015
Thanks: 347 given, 1,223 received


MacroNinja View Post
Trade Psychology Thoughts from a Managers Point of View

A bit of background for this post: I've spent the last 90 days on boarding 4 new traders for a prop firm (3 of which are left). After attending a management seminar last week, we decided to review the firms systems and processes to determine what improvements could be made at a management level. I thought about the struggles we were facing getting trainees over the hump into fully qualified desk positions, and these are my top observations.

1. Let's talk a bit about checklists. Veteran surgeons and pilots still use them after 30 years of experience to enforce consistency. Would you sit on a plane from one that didn't do a pre-flight safety checklist? How good are those procedural checklists that you have?

I often find it interesting that someone who is a complete novice (after about say 3-6 months training) tens to outperform an intermediate level trainee (9-12 months training). I generally find that the novice is being very diligent about their pre-market prep work ticking off every box, checking the economic data, reviewing all the overnight reports, etc.

[For reference, people are on demo for the first three months, need to show about 5% return on capital within the risk metrics before being put on a small live account, then needing to show 5% return on capital on the small live account before being placed on a dedicated desk with a specialized market]

However, the intermediate trainee often starts to feel they have the "hang of things" after about 9 months and hitting their numbers for the first few month. At that point, they often start rolling up to the computer 15 minutes before market opens, and just starts to push buttons, or rushes the prep work because they think they know it all intuitively now and don't need to do the analysis. As a result, the performance starts to dip in the red right as the new trainees are starting to hit their quotas (in the green)

2. Lesson #2: Coaching itself is a process. This is more of an observation about the senior traders who the trainees are shadowing than about the trainees themselves, but probably applies to "self coaching" concepts. Don't "wing" the coaching process. I find that when we don't make the training and feedback systematic, something gets missed in the foundation training that causes confusion. e.g. are they simply forgetting the proper math of calculating market pressure because someone forgot to cover it? Was the PMI data release trade plan miscalculated because of wrong inputs?

Are they not even going through the daily review because the senior's gotten lazy? Make the debriefing process as systematic as possible: what could have been done better, what mistakes should be corrected. Most importantly, measure how quickly adjustments are being made when performance numbers are missed. (And if those same mistakes are still being made over and over again, maybe that trader needs to be cut)

3. Are people practicing in the game or are they practicing before the game? (Maybe a bigger question is whether they are even practicing at all)

I often find that the intermediate traders who have plateaued off in performance suffer from a lack of continued practice and training. Much like in basketball, even if you're a solid inside player, that doesn't mean you can't improve your jump shot. For the trading world, sometimes this means that a good scalper should be improving their macro analysis skills and vise versa instead of being lazy and stopping their practicing of new skill sets.

However, the practice has to be done in the right way, which means not in a live setting where there are funds at risk (both because this is a bad business practice for the P&L, and also because people can't focus on the mechanics of execution when the emotions of risk come into play).

This is obviously not intended to be a comprehensive list, but simply my observations made over time as a manager.

Great post! Regarding point #3, do you have any insight as to what your best traders are doing to improve their practice before the game? Are they re-running their trades and analyzing the market? are they reading books? do they discuss strategy and macroeconomic factors together? What works best for them?

Reply With Quote
 
  #6 (permalink)
Market Wizard
London UK
 
Futures Experience: Beginner
Platform: CQG
Favorite Futures: Futures
 
xplorer's Avatar
 
Posts: 3,041 since Sep 2015
Thanks: 6,544 given, 4,801 received
Forum Reputation: Legendary


MacroNinja View Post
Maybe to highlight the "psychology" piece summarize it a different way: it is ironically the initial success that people achieve that causes them to start failing the next series of breakthroughs. If you'll permit me one Star Wars analogy, it's like Skywalker telling Yoda that he's not going to finish his training and jump straight into fighting Darth Vader. Does Luke now have a few skills up his sleeves? Yes, but that feeds a sense of over confidence that the training either doesn't need to be completed or one doesn't have to train as hard during the next phase to achieve mastery.

True.

Reply With Quote
The following user says Thank You to xplorer for this post:
 
  #7 (permalink)
Market Wizard
Sarasota FL
 
Futures Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES
 
Posts: 3,632 since Jan 2013
Thanks: 26,738 given, 11,106 received
Forum Reputation: Legendary

I like this post a lot, especially the part about the checklist.

IMO many people could benefit hugely by having a good checklist to break down any complex task, and to prepare for one. I certainly would, and now I'll put something together for morning prep and for individual trades.

Thanks for bringing this up into the foreground. It's very valuable.

Bob.

Reply With Quote
The following 3 users say Thank You to bobwest for this post:
 
  #8 (permalink)
Market Wizard
London UK
 
Futures Experience: Beginner
Platform: CQG
Favorite Futures: Futures
 
xplorer's Avatar
 
Posts: 3,041 since Sep 2015
Thanks: 6,544 given, 4,801 received
Forum Reputation: Legendary


bobwest View Post
I like this post a lot, especially the part about the checklist.

IMO many people could benefit hugely by having a good checklist to break down any complex task, and to prepare for one. I certainly would, and now I'll put something together for morning prep and for individual trades.

Thanks for bringing this up into the foreground. It's very valuable.

Bob.

This is by no means complete, but I put it together after having read some of the posts on FIO. The one I was especially inspired by is this one by @lancelottrader

https://futures.io/psychology-money-management/36850-what-psychological-shift-did-you-make-become-profitable.html#post527910

  • Did I prepare for today?
  • Am I in the most conducive state to trade?
  • Is the door closed?
  • Have I assessed the current volume profile situation?
  • Have I assessed where the market is right now?
  • Thinking like an institutional investor - Would I be able to articulate to others the trade I'm about to take?
  • Am I prepared NOT to take any trades today?

Edit: some bullet points are of course specific to myself. For instance, on occasion I would open up the trading platform, see something and almost instantly would jump on a trade. A bad idea, at least for me. So some of the points in the checklist helped me refrain from that behaviour.


Last edited by xplorer; April 5th, 2016 at 10:22 AM. Reason: Clarification
Reply With Quote
The following 5 users say Thank You to xplorer for this post:
 
  #9 (permalink)
Market Wizard
Sarasota FL
 
Futures Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES
 
Posts: 3,632 since Jan 2013
Thanks: 26,738 given, 11,106 received
Forum Reputation: Legendary


xplorer View Post
This is by no means complete, but I put it together after having read some of the posts on FIO. The one I was especially inspired by is this one by @lancelottrader

https://futures.io/psychology-money-management/36850-what-psychological-shift-did-you-make-become-profitable.html#post527910

  • Did I prepare for today?
  • Am I in the most conducive state to trade?
  • Is the door closed?
  • Have I assessed the current volume profile situation?
  • Have I assessed where the market is right now?
  • Thinking like an institutional investor - Would I be able to articulate to others the trade I'm about to take?
  • Am I prepared NOT to take any trades today?

Good list. I'll be working on a similar list, and these may get included.

I will probably be looking for more specific things to check off, but these are good general overall points to look at.

@lancelottrader's journal is an excellent source of any kind of trading-related ideas. There are currently several others that I would strongly recommend.

Two of the most active right now, involving the postings and real-time trades of several very good traders, are the spoos (S&P) thread and the Scalper's Journey threads:

- For mainly ES (spoos): https://futures.io/elite-circle/13452-elite-es-s-p-500-futures-contract-sp500-spoo-nalysis.html
- For mainly CL, with some ES: https://futures.io/elite-trading-journals/38439-scalper-s-journey.html

These are Elite-only threads, as are a great many of the threads on FIO. There are, of course, many that are non-Elite; it just has to do with where the thread starter placed it. Sometimes people mistakenly think that Elite is just for downloads of indicators and such. In fact, a lot of the forum content is there.

(No sweat if you don't want to go Elite -- it's certainly not my call and not my business. But the $100 one-time fee is an investment that most people who are active on the forum are glad they made. But it's your choice....)



Bob.

PS, no pressure, I just have noticed you do a lot of posting, and might like to know what else is here. And thanks for your list, too.

Reply With Quote
The following 2 users say Thank You to bobwest for this post:
 
  #10 (permalink)
Elite Member
Chicago, IL
 
Futures Experience: None
Platform: NT8,NT7,TWS,FOREX.COM app
Broker/Data: InteractiveBrokers, NinjaTrader Brokerage FOREX.COM, IQFeed
Favorite Futures: The one I'm creating in the present....ES, ZF, ZN, ZB, FX pairs
 
Blash's Avatar
 
Posts: 1,557 since Nov 2011
Thanks: 4,515 given, 2,336 received
Forum Reputation: Legendary



xplorer View Post
This is by no means complete, but I put it together after having read some of the posts on FIO. The one I was especially inspired by is this one by @lancelottrader

https://futures.io/psychology-money-management/36850-what-psychological-shift-did-you-make-become-profitable.html#post527910

  • Did I prepare for today?
  • Am I in the most conducive state to trade?
  • Is the door closed?
  • Have I assessed the current volume profile situation?
  • Have I assessed where the market is right now?
  • Thinking like an institutional investor - Would I be able to articulate to others the trade I'm about to take?
  • Am I prepared NOT to take any trades today?



Edit: some bullet points are of course specific to myself. For instance, on occasion I would open up the trading platform, see something and almost instantly would jump on a trade. A bad idea, at least for me. So some of the points in the checklist helped me refrain from that behaviour.


Love it!!!!!!

Ron

It is an axiomatic fact that while you meditate you are speaking with your own spirit. In that state of mind you put certain questions to your spirit and the spirit answers: the light breaks forth and the reality is revealed.
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)
Reply With Quote
The following 2 users say Thank You to Blash for this post:

Reply



futures io > > > Top 3 Reasons Traders Fail to Reach Advanced Levels - A Manager's Point of View

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Top 50 Reasons Why Futures Traders Lose Money iTrade2golf Psychology and Money Management 2 February 22nd, 2012 11:40 AM
'Too big to fail' foe picked for top FDIC post kbit News and Current Events 0 October 21st, 2011 06:14 PM
TOP 3 REASONS I APPRECIATE THIS FORUM tigertrader Off-Topic 9 November 1st, 2010 06:57 PM
Correct Globex Pivot Point Levels for Ninja 6.5 Private Banker NinjaTrader 24 October 27th, 2010 09:11 PM
Top Ten Reasons I'm Ready To Leave My Home Office tigertrader Off-Topic 8 August 26th, 2010 11:32 AM


All times are GMT -4. The time now is 11:32 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-11 in 0.21 seconds with 19 queries on phoenix via your IP 54.82.81.154