I had never heard Gates speak in person and I was ready to hear all about the newest software and latest technology.

Much to my surprise, all Gates talked about was what he called “data mining”.

Gates thought data mining was important. He said that by analyzing data collected throughout your business, you could find revealing insights leading to improvement.

Although I did not fully understand the importance of data mining at the time, every year since then I have seen dramatic examples of how mining the data from your trading can lead you to important discoveries.

One dramatic example of what can be mined from your trading data was evidenced by a trader in my Professional Trader Mentoring Program.  He used the time off from trading at year-end to analyze the preceding year’s records of his trades. As you might expect, he tallied his trades by month. He listed them by setup and he figured his winning percentages and losing percentages.

Lastly, he separated trades that matched his plan from trades that were impulsive and did not fit into his plan.

The impulsive trades were obviously the result of a temporary lack of discipline and nearly all of them were losers.

In his case, the lesson from looking at his past trades could not have been clearer.

Had he not done these emotional, out-of-plan trades, he would have more than doubled his result for the year. Instead of making a 15% return on equity in his trading account, he would have made almost 40% return on his trading capital.

Maybe, this was what Bill Gates was trying to tell us.

In terms of keeping records of your trading, I have two rules.

1. What you record must make sense to you; and
2. What you record must be relatively easy for you to do.

Too often traders get excited about what they can learn from their records and devise a recordkeeping system that is too complex and too time-consuming for them to continue in the long run.

This is why my advice is to settle on a minimum of what is important to record from your trades (i.e. number of trades, ticks per winner, ticks per loser, time in winners and time in losers).  Then, diligently keep track of those few items every day.

At the end of the year, say between December 19th and January 16th this year, you can go back and look over your year in trading and learn what can be learned.  With what you learn you can plan for the coming year, using the last year as a starting point in the improvement of your trading.

Why not make a New Year’s resolution to mine the data from your trading?

Who knows, you could find some easily-implemented change to help you advance in your trading in 2011.

Bill Gates would approve.

If you are committed to making 2012 the year you breakthrough in your trading, you should join my Professional Trader Mentoring Program.

Teaming up with me, you can get the benefit of my 37 years of trading experience without having to take 37 years to get it.

Wishing you success in your trading,

Copyright © 2009-2011 by Jeff Quinto
All rights reserved

The Mount Everest analogy is meant to describe the journey from getting serious about trading, the foothills, to the start of professional trading, Base Camp One.

The first trader who talked about his journey to professional trading was Khasan from Moscow. Khasan presented a series of spreadsheets that depicted the steady improvement in his trading so far this year. He progressively increased his daily profit goals as he increased the tick count of the chart he uses to trade Eurocurrency.

He started the first of the year with a relatively fast chart, a 233 tick chart, and increased the tick count of the chart he used until today; he is trading with a 987 tick chart.

In the process, his performance has improved nicely and he is doing fewer, but significantly more profitable trades.

Khasan’s style of trading is his own variation of the retracement trade I teach traders in my Professional Trader Mentoring Program.

It is important that Khasan has taken my starting point and made his own path, his own variation. He has gone from copying me to developing his own rational strategy that reflects his personality, his experience, and his beliefs on how the market operates.

The results of his progress are gratifying to Khasan, and to me.

_____________________________________

The second trader to speak at last week’s $aturday $trategy $ession was Guillaume who is currently trading in Carnac, France on the coast of Brittany.

When he is not trading, he sails an extreme sailboat – sort of a very large sail on top of a very small boat.

Guillaume and I have worked together over the past three years. 

In the beginning, we set up the intellectual and structural foundation of his trading. 

Then, we built his skills and understanding of trading to the point that he could quit his lucrative day job a year ago. 

He, now, has been trading full time for a year.

I am particularly proud of Guillaume as I have seen him grow as a trader. 

I fully expect that Guillaume’s name will one day be well known among serious traders.

Guillaume gave an insightful presentation on the journey he has taken in the last year as a full-time professional trader.

He talked about the challenges he has faced, his failures and his successes.

Interestingly, he talked about the importance of humility.

At first blush, humility would seem to be the last thing a successful professional trader would need.

After all, was Gordon Gekko humble?

I think not?

However, Gordon Gekko was a fictional character. Guillaume and other successful traders are real.

In the real world, long term success is dependent on a healthy dose of humility to understand that you will not always be right.

You need to accept that many of your trades, no matter how skillful you become, are going to be wrong. You need to willingly, and quickly, take your losses and always be ready to exploit your gains, when your trading is successful.

The fact is that you need to mature in your trading, like Guillaume, until you are at the same time both confident and humble.

I remember when I traded on the floor and I thought that I must be getting taller because I seemed to be able to see things that I could not see before. I even imagined that I could see behind other traders. The fact was that I was not growing in height. I was growing in understanding of the markets. It just felt like I was getting taller.

Khasan and Guillaume are getting taller, not in height, but in stature and in understanding and I am pleased to have helped them as they grew.

The path from the foothills of trading to Base Camp One is long and it is hard.

But, for those traders who are willing to put forth the effort in a planned structured way, the rewards, both monetary and personal, can be significant.

Just a reminder that in three weeks, on June 25th, we will be holding our Century of Trading seminar in Santa Monica. Check it out at Century of Trading.com. Even if you cannot attend, you can get six hours of videos of the best Simon Townshend, George Kleinman and I have learned in our 100 years of trading just for the price of admission.

Wishing you success in your trading,

Copyright 2011 by Jeff Quinto, all rights reserved