Expanding upon Performance...

 In tweaking my own behavior to achieve better performance, I've been forced to think about sustained performance a bit more. This is actually a very important topic that doesn't get enough attention, since people would much rather see a one-time large gain or loss on WSB and either be envious or be left with a feeling of relief that that they didn't screw over their lives in one trade.

Sustained performance, however, is something that requires discipline day in and day out. It's often not exciting, just as Netflix stock wasn't all that exciting when I identified it as a potential blockbuster company (pun intended) when it was a virtual penny stock with 5 million subscribers. But holding onto that thesis (of it being the next big thing) would require the discipline of a monk through the next 7 years of explosive growth. But on a day-to-day basis, even a company/stock like that doesn't excite you much, as you see it go up maybe 2-3% each week, then suddenly see it go up by 20-30% after a great earnings report. But what you don't realize is that those gains are compounded, leading to an incredible net % gain.

So what does holding onto Netflix stock have to do with trading? Well the "practice" of patiently riding such a story stock is similar to the practice of exercising daily discipline in one's trading. On a daily basis, it can be outright painstakingly boring. But I challenge each one of us to trade in this fashion for even one week, and see the net results over the following weekend (and take a deep breath to see how it felt to have achieved what you did in a week). 

The most fulfilling part of this one week trial of discipline is not just that you were able to stick to a plan and exercise your abilities, and not even the monetary gains you experienced over that week (this post is speaking to +edge traders), but rather the fact that you've suddenly executed a round of trading that is sustainable week after week. Before you know it, you will become a story trader (with a PnL that looks like NFLX stock).

This discipline I speak of must also be practiced intraday, i.e. you need to learn how to cut back when times just aren't that optimal for your style of trading. One of the great paradoxes of trading is that doing nothing is actually doing something. You're harvesting your gains during suboptimal periods, and setting yourself up for sustained performance that may seem almost mind-boggling. I have seen this in my own trading, but am often not smart enough to recognize what I am doing right and how rare it is to achieve that level of performance (alluded to in my prior post). We'll see how it goes from here...