Learning how to trade e-mini futures from the masters

In one of the previous articles in this section, entitled "What it takes to be really good at something (including trading e-mini futures)", the following piece of advice appears: "Study the masters."

While studying the masters takes time, and sometimes a considerable effort, you can learn how they thought in more speedy, even if incomplete, a way from some of the popular quotes or sayings attributed to them.

Let me present three such quotes from three great masters. They are not trading masters, but that does not matter. Mastering trading is no different from mastering many other fields of human endeavor, and so what they say applies to trading as well, as you will hopefully see from my comments to the wise men's words.

1. John von Neumann

"In mathematics you don’t understand things. You just get used to them." - John von Neumann

Recognized as one of the greatest mathematicians of the twentieth century, John von Neumann was a polymath who made contributions to many fields, including physics, economics, and computer science. Fleeing the Nazi occupation of Europe, he came to America, where he died prematurely of cancer when still in his fifties. He should know what he is talking about.

While what he says may not apply equally well to science, where understanding things is still very often the key to making progress, it does apply quite well to trading. You really don't understand things in trading and those who think they do are likely to fool themselves. You simply get used to them by being exposed to them for a while. You train yourself to act as a trader just like you train yourself to act as a mathematician. There are more parallels between traders and mathematicians, but let me just name one, a particularly important one. Both mathematicians and traders practice their craft in fundamentally the same way: by recognizing patterns.

2. Richard Feynman

"You keep on learning and learning, and pretty soon you learn something no one has learned before." - Richard Feynman

Richard Feynman was one of the greatest theoretical physicists of last century. Von Neumann's contemporary, like him, took part in the Manhattan Project to build the atomic bomb, and like him, had a dubious pleasure of battling cancer. Sadly, he lost this battle, aged only 69.

Feynman's words apply to trading as well. You cannot be really good at trading unless you learn long enough to know that what you are doing is good and original and hence stands a chance to be competitive. It does not have to be very original, but it better have some twist or two that you believe is not widely used. You can shorten your learning curve and your path to becoming a competitive trader by learning from those who do not follow the herd, but unless you are willing to keep learning, you may soon end up as fodder for those who are and who can learn fast. Without the willingness to learn, you simply cannot adapt and if you cannot adapt, you are virtually bound to become yet another victim of that egregious, whimsical rascal traders often refer to as Mr. Market.

Every month I interact with people who would like to become day traders. They often are interested in KING. While I think that KING can make you a successful emini day trader, I sometimes have to advise people against it. I don't think that someone who is concerned about the learning curve, who is not at ease with computers, or who, in general, does not believe in his learning abilities or whose learning skills are poor and he is looking for some guru to spoon feed him, is very likely to succeed in this very competitive field.

I am afraid, though, that people like that often end up victims of "systems that every investment moron can use" and, if that were not enough, then suffer a drubbing at the hands of Mr. Market, which only shows that if you are not willing to learn, you may end up losing more than you bargained for.

3. Aristotle

"We are what we repeatedly do. Excellence, then, is not an act, but a habit." - Aristotle

Aristotle, who along with Plato and Socrates, is one of the symbols of the great civilization of ancient Greeks is as relevant today as he was two millennia ago. That's because the human nature has not changed in any significant manner over the past 25 hundred years or so. Excellence is really a habit and you achieve it by practice. Practice is the key to mastering trading, practice is the key to mastering it well enough to excel at it, practice is what I stress very often on this site as the most important element to trading success.

Incidentally, learning, so stressed by Feynman, is also a habit. While the popular saying asserts that you cannot teach an old dog new tricks, that's not entirely true. You can form new habits at any age, although, the older you are, the more effort this may entail. Examples of senior citizens who graduate high school or college while certainly rare could serve as an inspiration to everyone who is serious about learning something new. And since this is an election year in the US, let me remind you, partially in jest, what some might have already forgotten, namely, that "yes, we can."