[idaxtrader]

At this optimal state of arousal, the performer is divided by neither the understimulation of boredom nor the overstimulation of anxiety. Nor is there a divide between real and ideal that cannot be bridged. Flow occurs when there is a perception of likelihood of success at an important task, but not certainty. 71

Boredom, anxiety, and depression interfere with learning because they are distractions: They divide attention. Positive thoughts born of overconfidence are equal distractions. Interestingly, we need to feel competent to develop competence: The perception of competence generates the flow that enhances concentration and learning.

He was like the ordinary student, trying to build competence through normal efforts and practice. He could not immerse himself in markets to achieve the competence that leads to expertise. 72

Divided attention is the source of most performance shortcomings. 72


First-order competence is optimism about doing; second-order competence is optimism about competence building itself. A first-order performer feels competent to navigate through New York City but not London. A second-order performer feels competent to quickly learn the layout of any city. 72

Once they realized they could bridge the gap between real and ideal, they could face their shortcomings without fear or distraction. 73

Those who bounce from strategy to strategy are apt to pursue each one until it produces failure, leaving behind a string of disappointments. The resilient performer has cultivated enough second-order competence to stay in the zone even when the inevitable strings of setbacks occur. 75

Armstrong reveals an important secret about his ability to overcome this late-stage and often-fatal cancer. He explains that cancer gave him “a new sense of purpose” (page 151), replacing biking as his reason for being. He would start a cancer foundation and help others fight the disease. His role was no longer cyclist; he now defined himself as a survivor who would help other survivors. 75

His new goal—and his redefinition of who he was—no doubt contributed to that recovery. 75

This pervading sense that one is competent to master changing conditions allows performers to develop resilience to setbacks that would overwhelm their peers. Very often, as with Armstrong, this resilience is fueled by the performer’s creation of a new identity—one that redefines the challenge ahead. 76

The rage to master is fueled by the sense of self-mastery, and that is generated by experiencing and overcoming changing conditions. 76


If cancer and concentration camps cannot keep the human spirit from mastery, no challenges in markets, careers, or relationships are too
great to overcome—as long as you have the why. 79

There is no performance without purpose. 79

What does it mean to structure learning for success? Csikszentmihalyi outlines several preconditions of the flow experience in his book Creativity: Clear goals at each step of the learning process. Immediate feedback regarding one’s actions. A balance between challenges and skills. 80

He could not have experienced himself as competent. The coordination exercises, visualizations, and practice sessions for his swing, however, allowed him to master basic skills and develop a sense of confidence and ability. Cordoba’s feedback was essential to this process. He helped his student feel like a winner, and his student responded.

Cordoba’s genius in working with Sharon was his breaking down of complex tasks into component skills that could be rehearsed with clear goals and feedback. This is close to a universal principle in performance development: Wherever we encounter expertise, we see the intensive rehearsal of component skills. Not only does this drilling build performance to the point where it becomes automatic, it also cultivates the sense of mastery by creating positive mirrors. 83

Dan Gable explains how he consistently elicited excellencefrom his teams. He broke each skill into several segments and then demonstrated each with a clear explanation. 83

For now, the important thing to realize is that you can break trading down into bite-size pieces, rehearse those, develop mastery, and keep yourself in the flow state. Drilling is fun once we get it, and we are most likely to stick with something that feels good. The perfect practice that makes perfect develops performance-specific skills but also cultivates the conditions for sustained concentration, enhanced learning, and increased confidence. 84

Set goals for each practice session to generate immediate feedback. Each practice session’s objectives would be based upon progress from previous sessions. Goals would be specific, to track gains in learning. 87

Drill skills to promote implicit learning. We would make skills automatic through rapid repetition, solidifying learning, and providing resistance to emotional interference. 87

Competence requires curriculum: a systematic approach to learning. 87

As skills are brought to increasingly realistic performance settings, coaches generally advocate working thoroughly on one cluster of skills before starting others. Chris Carmichael and Lance Armstrong, detailing performance programs for cyclists, use the analogy of painting a house. Painting a wall of one room, then going to the ceiling of another, and then to a hallway would be inefficient. It makes more sense to complete one room at a time. 88

Carmichael and Armstrong describe four-week blocks of practice for each skill module before working on subsequent modules. Thus, for example, a cyclist may spend four weeks working on sprinting, the next four on climbing. 88


Divide overall performance into a set of skill modules that include the processes of monitoring markets for favorable trading conditions, researching/identifying trade ideas, working orders/entering positions, managing trades, and working orders/exiting positions. Assign time periods to each module to create a curriculum, with the most basic skills preceding more specialized ones. Within each period, break each module into component skills and mix the drilling of these skills to create realistic enactments. Establish explicit, challenging, but attainable training goals for each practice session and period and collect feedback about performance to track progress toward goals. Utilize feedback to set goals for the next practice sessions. Utilize feedback to make changes in the pacing of the curriculum, extending periods if progress is slower and moving ahead if progress is rapid. 89

Amateurs learn by performing, creating repeated experience without structure or feedback. Professionals learn by drilling, progressing through structured sequences of skills with the assistance of feedback and mentoring. 90

Despite this seemingly obvious truth, we see few traders attempt to learnthrough training. Instead, they approach trading in the amateur mode, only to lose money and court frustration. 90