Specialty Skills

Imitation: Not Just Flattery, Your Key to Trading Success

Dr. Woody Johnson

When someone has the same goals as you and they are achieving them consistently, you would do well to “imitate” their strategy because they are proving by their results that the strategy works.  Of course, trading is no different.  In fact, as a trader, one of the ways to shore up your abilities and skills is to have a role model or mentor.  This would be someone that you have identified who is already a proficient trader and solicit their guidance.  One of the great supportive programs of Online Trading Academy is that they have the Extended Learning Track courses that guides the student through trading strategies and lessons where they can “see” the instructor as he/she leads them through potential trades and as well the potential pitfalls that can wreak havoc in the trades.  This student/instructor relationship can really propel the determined student into getting the results that they want, consistently; and as well they can glean important behavioral nuances too.  Another way to describe imitating someone and making their strategy for getting results yours…is modeling.

Modeling is an extremely proficient way to break down or “code” what you see as a role model’s or mentors successful actions.   As the saying goes, if someone can do it, anyone can learn it.  Modeling is a state of curiosity and selflessness.  It is a desire to listen to, watch, respect, and learn from others as well as yourself.  Modeling is an interest in process over content.  Process or the “how” something is done is arguably more important than content or the “what.”  The process is where skill is focused to create the end result.  There are countless ways to do anything, but there are ways that are extremely effective and there are time-and-energy wasters that might get you to the same result … eventually.  Modeling can take many forms.  Some of your most fundamental skills have been acquired through modeling others.  Babies and young children are expert modelers.  Only when they start learning by more traditional methods do they begin to lose this skill.

You can model anything as you identify the mastery in someone who does well the thing that you want to capture; for instance:

  • Motivation to keep your personal commitments
  • Influence
  • Achieving a personal best
  • Listening
  • Networking

Equally, you can model excellence in your ability to:

  • Get depressed
  • Sulk
  • Worry
  • Resist change
  • Respond compulsively
  • React impulsively
  • Freeze in the face of fear

This happens when you are taking in information from less than competent sources; and it is usually unconscious.  With conscious awareness you have a choice to do something differently.

Modeling also involves mentoring as stated in the above; that is, finding and “sitting next to an expert.”  This is an excellent way to model skillful behavior.  The subject being modeled can also benefit from being modeled by learning from feedback on how they structure their experience.  Even if someone does something well, it doesn’t mean that they necessarily know how they do it.  Quite often behavioral strategies, that is, the detailed “how” is not in the trader’s awareness.  This will become evident as you ask “why” questions focused on elements of the mentor’s process.  With this awareness the “unconscious competent” can achieve greater consistency in the skills they have.  A few years ago, I had enlisted the help of a mentor to help me with my futures trading.  As we traded and my questions became more detailed I noticed that on a number of occasions I asked the same question 2 or 3 times to ensure that I got it and at first became confused because she changed her answer.  It became clear that she was operating with regard to some of her executions “intuitively” and hadn’t actually coded her process.  We then began to break down to smaller increments her protocols and eventually had identified what had been out of her awareness.  This feedback also increased her results as well by bringing into awareness some of the important trade executions that had become somewhat inconsistent.

Applying the process to self by transmuting skill in another area of your life where you can see that a specific protocol is getting results; by reproducing that ability or skill in your trading you can provide a boost to your results.  For instance, you may be methodical, self-assured and cautious in your career as a physician, but highly anxious, impulsive and unpredictable when it comes to trading.  This is a common occurrence and all you need do is talk to traders and they will tell you how their rules “went out the window” as soon as they felt the pain of a position going against them and they found that they moved their stop, or double-downed, or violated their rules in some other way.  Or, they were paralyzed by panic when the tick went against them and they impulsively exited what looked like a losing trade only to see the price action move in their favor just a few bars later and would have turned what appeared a loser into a winner.

Uncovering the protocols or strategies necessary to trade consistently well involves observing personal program(s) that are sequences of mental and behavioral codes.  For instance, how you do what you do when you walk, talk, drive, read, or laugh.  Normally you don’t think of how you go about making these things happen, but they constitute a code of behavior that you have established.  The programs that make them happen are managed on your behalf by your unconscious mind.  These are known as strategies.  When you have the strategy for how someone manages his or her experience, you have the key to reproducing that experience for yourself.  Trading has context specific patterns that produce excellence around things like effective planning, rule setting, position sizing, money management, technical analysis and fundamental analysis; but these are not all.  There are ancillary aims, concepts and frames-of-mind that indirectly support your success.  Often you will hear really successful traders share that they have a consistent pattern for service to the community—a notion of giving back, which reminds them that they are a part of a larger community and that this perspective helps them to maintain a viewpoint of remaining grounded in the face of greed.  Secondly, they have a larger reason or purpose that illustrates why they desire to be successful, one that is not money driven.  They have a skill in using metaphor and visionary thinking.  Winning traders are able to create a sensory rich vision of success that creates a subconscious passion for remaining focused on what matters most; that is, keeping rules, and following their plan. They also have a dedication to sequential and purpose-driven protocols, i.e. the development of effective routines that give way to the development of strong habits leading to skill-building around rule based methods.  These are additional strong concepts that are incorporated in many highly skilled and successful traders.

Identifying a mentor isn’t as difficult as it may seem initially.  Online Trading Academy has a number of avenues that you can pursue in order to secure one.  For instance, the Power Trading Nation web site is one place we have available for our continuing education students who participate in at least 2 Extended Learning Tracks.  Additionally, as mentioned in the above, the Extended Learning Track asset classes that have many, many lessons and instructors teaching affords another great opportunity to get a role model or mentor.  The important point is that it is extremely helpful to bringing your best to the platform and trading in your highest and best interests.  Your A-Game is the only game that will consistently get you the results that you want.  You’ll want to provide yourself with every “edge” possible.

Happy Trading

This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.