At the broadest level, trading consists
of analyzing, synthesizing, and doing.
·
Analyzing
is extracting information from markets, immersing ourselves in data. It
is our look through the microscope.
·
Synthesizing
is assembling those data into a coherent picture, extracting pattern and
meaning from the reams of market information. It is our telescopic view.
·
Doing
is taking action on the meaning we have extracted from studying markets.
It includes everything from determining the best expression of a view to
managing risk and reward once the view has become a position.
In trading, the microscope and telescope of
viewing are transformed into real world doing.
At the end of a trading day, week, or
month, we repeat the process–only we turn the lens inward.
We analyze our performance, immersing
ourselves in the data that tell us how well we executed and managed our trades;
how well we discerned genuine opportunity in markets.
We synthesize our performance observations
into goals that move us forward, capturing what we’ve done well and what we
need to improve.
Then we return to doing, feeding those
goals forward into future market analysis, synthesis, and doing.
Deliberate practice is a cycle of stepping
back to observe and stepping forward to act. It’s also a cycle in which
we first act in the world and then act upon our performance.
Analyzing, synthesizing, and
doing, in markets and with us: that is what a trading process is all
about.
