When we first learn anything, we need to do it consciously, deliberately and intentionally. Think back to learning to write in cursive in 2nd grade – each letter was formed with much focus right? (Did you know they are leaving that OUT of grade school curriculums these days?). Then by the time we got to high school, we didn’t give a squiggly A or Z a thought but they started teaching us to think – to justify and create in classes like English and Sociology. College extends the process of teaching us to think and grad school – at least outside of the professions – is all about original analysis and thought.

At each step of the way, the information we learned earlier goes underground. Again, we don’t consciously, deliberately or intentionally THINK about each item of information that five years earlier we did not know.

Now tell me, if succeeding at trading is one of the most difficult endeavors on the planet, why would the process of becoming more learned and sophisticated be any different? More importantly, why should it?

Trading education, especially outside the “prop” world (OPM or other people’s money) is not like progressing through levels of formal education. There is no standard curriculum, if you switch from one school to another you might not even recognize the lingo and even in OPM situations much of what the junior traders are asked to do is sit at the screen and lose money.

What are they doing – what is that form of learning called? Experience right? And why is experience important? As dictionary.com defines it “the ability to judge, make a decision, or form an opinion objectively, authoritatively, and wisely, esp. in matters affecting action; good sense; discretion”.

But ironically most trading education tells you NOT to use judgment. “Trade what you see, not what you think” for example – well now tell me, how on earth are you really supposed to do that?

There is this bizarre overlooked contradiction in much of what passes for trading wisdom – or at least smart trading psychology. On one hand, developing a trading strategy/tactics and a plan are OF COURSE the foundation to work on but on the other, the most successful firms ask their traders to spend years learning judgment while the independent/retail world is taught not to think!

The answer to this lies in re-thinking thinking altogether. How do I look at the markets? What do I believe about how they work (on my timeframe), what style of trading suits me? And then once those questions are answered, how do I put together a strategy, tactics that embody that strategy and systematically inject my judgment – or my brain’s extraordinary ability to recognize patterns – into play in order to take money out of the market (or really from other people who are trying to do the exact same thing)?

In short, without an exceptional money-making mentor (and they are very hard to come by), traders have to create the learning progression of high school, college and grad school themselves. I submit that if they look at the thinking/judgment process and institute a program for themselves that they will do much much better than if they just try to rote follow what some other “trader” teaches them.

Is it work? Yep? Is it a LOT of work? Yep. But c’mon does it hold water at all to think that competing with other motivated traders across the planet, some who will do ANYTHING to succeed, is (or was) going to be easy?

…and one more thing, this is also the process of belief and confidence building – which is exactly what you need when things go wrong – which in the markets is a whole bunch of the time! In other words, most will tell you to go back to your plan. I will tell you to go back to your judgment – judgment you have honed through a systematic process.