Organized Learning: Why Being Systematic is Fundamental to Success in Trading

Joe really doesn’t know what he is doing wrong. He has bought the seminars, bought a ton of commercial trading systems and spent a good deal of time trading manual ideas and tips which sometimes give him money but in the end always cost him dearly. Joe has been trying to “make it” in the Forex game for a few years but he finds this to be a dead-end. Most likely Joe will quit and never become a successful trader, mostly because he lacks a very important thing which is the ability to learn in an organized and systematic way. On today’s post I am going to talk to you about why being systematic is vital for success in trading and how you can shift your way of learning so that it becomes much more well organized and focused on your goals.

As a scientist one of the first things I learned along my formation was to be systematic. When you study a hard science like chemistry you must imagine that you’re asking reality a question with each experiment you run and the clarity of nature’s answer will depend on your question’s innate quality. When you run some experiment its result’s interpretation will mainly depend on how well controlled it is and how its design allows you to draw a significant answer from the results. For example if you’re running several experiments to study a reaction and you carry out 10 runs with random amount of catalyst, random temperature and random pressures the results will be very hard to interpret. For example if a result is positive you’ll wonder if it was because of the pressure, the catalyst quantity or the temperature. Nature has given you many answers inside a single container, you asked a disorganized question and you got a bunch of mixed answers.

The same basic principles apply to your development as a Forex trader. When you want to learn something about the market you need to ask it a clear question through a clear set of experiments where your variables are fully controlled. For example if I want to know how broker dependency works I should run the same system with the exact same parameters on 10 brokers and then examine their results to see how they differed. The question must be clear so that the answer can have an easy interpretation. Most of the time aspiring Forex traders will lack a complete focus in systematic learning and therefore they will just ask bad questions and get very confusing answers.

For example when Joe was attempting to learn to trade he just got into a  lot of things attempting to just find “the one that worked” everything that didn’t give Joe what he expected was discarded and therefore he ultimately failed to find anything that would satisfy his requirements. However if Joe had gone into the task of learning in a systematic way about the different things he attempted to explore the outcome would have been very different. For example the fundamental questions he needed to ask first where never actually made, for example Joe should have investigated what the results of a system in the long term are, what factors affect simulations, how to run accurate evaluations, etc.

An important point of change for most traders out there which – I believe – marks the start of the journey towards profitable trading is the point where the person realizes that there is no point in simply trying to find someone to “take responsibility” for their trading. When a trader starts to realize that he or she should be responsible for their own profits and starts to ask the market questions through carefully designed experiments for which interpretations can be drawn you start to go somewhere. As a trader starts to learn from the market in a systematic way then knowledge is built in a viable manner and theories about the market and what may be possible to do in algorithmic trading start to come to light.

The large importance of organized learning is that it allows to build knowledge in a way which has structure. When you trade you should realize that your goal is not to look for some predefined idea you might have of what might be possible (for example to simply change systems endlessly until you find “the one” that gives you instant life-long profits) but it should be to understand what you’re doing. The acquisition of a systematic learning habit is perhaps the most important and determinant factor for the success of an algorithmic trader. When you are systematic you will increase your knowledge and understanding with time even if you fail to make a profit in the beginning while disorganized learning gets you nowhere (you’ll be at the same place two or ten years down the road). When you learn in an organized way you will eventually reach profitability as you’re building knowledge and understanding with structure that increases your chances tremendously as time goes by.

So if you want to be a successful trader you should just start asking questions to the market, building systematic experiments to get the answers. Don’t have any preconceived ideas but simply build knowledge as the market answers your question. The key is to build your own understanding as I have so incessantly said within this blog :o) If you would like to learn more about algorithmic trading and how you can also build an understanding around this area please consider joining, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach towards automated trading in general . I hope you enjoyed this article ! :o)

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