Sharpening Your Trading Edge

But when the world gets more challenging—scarce resources, predators, parasites—you need to innovate.

-Steven Johnson

Don't you feel that as a trader, the world we live in gets more challenging every single day? Of course it does. When you and I trade one stock with an opposite view on its outlook, you are trying to take a dollar away from my wallet. And I am trying to do the same to you, faithful readers.

Recently, I wrote The Best time to be a Trader is Now! In the comment section of that post, BC was quick to point out:

I guess I'm missing something here. All this stuff is available to everyone. Hedge fund risk adjusted returns have fallen in last 10 years, not risen. The first statement I'm sure you can debate. But how do you answer the 2nd statement. It's a fact, not opinion.

I mean you've really talked with traders who tell you it's easier to trade now as opposed to 10 years ago? That there's lower hanging fruit now vs then.

I answered:

It is a competitive world and the fruit will always be harder to get if you stand still. But the technology is getting better, and more affordable, and more accessible. Great traders adapt. If you follow this path—using these new technologies and are willing to create, experiment, and invent—heck yes! It is so much easier to concoct recipes that will bring down the fruit from high up in the tree.

The point I make is that to counterattack unrelenting predators, you must create and innovate. If you stand still, the crocodiles lurking underneath the bushes are going to eat you alive. They are going to take it all away from you.

Winners innovate! Innovators create.

Contrary to popular belief, trading is a craft. Like an artisan who develops a craft over a lifetime, it requires a discipline to be exercised daily.

-Mike Bellafiore

Written by Michael Bigger. Follow me on Twitter and StockTwits.