Less Is More
08/11/2014 6:00 am EST
In trading, it’s not about how much you know, but how well you use the knowledge specific to your trading goal and are able to simply ignore the rest, says John Locke of SMB Training Blog.
As I sat there looking at the 400 emails I got last Friday morning, I was reminded of the massive amount of information we need to sift through on a daily basis and how all that information affects our journey as traders.
I grew up with the belief that “knowing everything I could know” about a subject was a good thing. After all, the more I know, the more successful I can be, right?
Therefore when I decided to be a trader, I wanted to know everything. I really dove into it. And I’d like to tell you that I learned all there is to know about trading and instantly became a successful trader. But alas, the reality is quite different. As it turns out, even with all this knowledge, things still weren’t working.
So off I went to learn the next new thing; and the more I learned, the more there was to learn. It seemed that everywhere I turned there was something new and none of it was working. I was frustrated. I was losing money and I was on information overload.
I finally took a step back to evaluate things. I decided to meet and model the most successful people I could find in various businesses to see how they handled this “information overload.”
What I found out blew my mind. I found that the most successful people alive didn’t know nor did they even care about knowing everything. How could this be? How could they be at the top of their field and not know everything about it?
They told me that there is so much information available on any one subject—and it changes so fast—that there is no way anyone can know it all. In addition, much of the information available isn’t even relevant to their goals and serves as nothing but a distraction. In other words, once you’ve accumulated the base of information you need, anything more just slows you down.
Therefore, if you want to be successful, the answer is not in knowing everything about a subject but rather to have a goal and then delete, filter out, or ignore any information that is not relevant to that goal. This way, you can stop wandering around and focus on the things that really make a difference in your business.
More success by paying attention to less? Talk about a change in perception! But then I thought about it and it made perfect sense. Like the 80/20 rule. Focus on the 20% of information that is going to make the most difference and ignore the rest.
When I applied this to trading, I found out two very important things. First thing is that there is so much information available about trading that I could literally spend my entire life studying the subject and still not learn everything. And second, 80% of the information on trading (while it may be interesting) is nothing but a diversion that takes my attention away from the 20% of information I need to become successful.
Once I realized this, it changed my approach to trading. No longer did I have the need to know how everything worked and to try every system. Instead, I created a clear goal and decided on one style of trading. I then took all I knew about trading and threw out everything that wasn’t relevant to my goal. I focused only on the things that were necessary to become successful. And here I am today.
Needless to say, this approach exponentially improved my trading and it will do the same for you.
By John Locke, Contributor, SMB Training Blog