Kaizen: Japanese for "improvement", or "change for the better" refers to the philosophy that focus upon continuous improvement applied to the workplace.  

After the 2nd World War, Japanese businesses implemented this philosophy with the goal of becoming more efficient and eliminating wasted time/energy in their businesses. To put it simple they wanted to make the most out of their time and by becoming slightly more efficient each day, they would be able to become a lot more efficient and productive in the future.  (There is a much more wordy way to explain it, but I think this gets the point across.)

Ever since I learned about the word Kaizen (from some trading DVD way back when) I made a conscious decision to try and base my life off of this philosophy. Since trading is a major part of my life, I apply the same method of thinking to it as well.  After all trading is your business, so why wouldn't you want your business to be as efficient and productive as possible. Every day I ask myself this question "how can I become more efficient today?" Personally, I have a lot of things that I need to improve on as far as trading goes.  However, the key is not to try and change everything at once. Just like Jason's teachings go, when you first start out trading start by using one system on one market.  I don't look to go from ordinary trader to super-trader in one day. Rather I focus on improving a little each day, knowing that if I keep it up I will eventually get there. 

It's this same mentality that allows me to not get overly upset when I make a trading mistake. I mean we all make mistakes don't we? Isn't that part of being human? Of course, the key is to learn from those mistakes and not to make the same one twice. (One thing I find helpful is taking a snapshot of the chart on which you made the mistake on and labeling it. Then the next time a similar situation arises, take a look at the previous chart as a reminder of where you goofed).

The one thing that can stand in the way of the Kaizen philosophy is pride. In order to fix or improve something you have to first be able to admit to yourself that it needs to be done.  Many people, especially traders have a difficult time admitting that they're either flat out wrong, that they've messed up, or that maybe they aren't the level of trader that they claim/want to be.  Reality checks hurt but they pave the way for success.  Say you're on a hot date with the celebrity of your dreams and you're having engine problems but don't know how to fix it. You can A) pull over and call for help, or you can B) just keep on riding. If you chose (A) then your pride may take a little hurting as you wait for someone to come help, but at the end of the day you'll reach your final destination with a much smoother ride. If you chose (B) then you may make it for a while longer but eventually it'll stop working and not only will you destroy your car, but you'll lose the celebrity date as well. (Not my best example, but I think it makes the comparison I was looking for.)

I've recently started reading Mark Douglas's book "Trading In The Zone" which has a lot to do about trading psychology and the reasoning's behind why we think the way we do. I'm only about half way through so I'm not sure how deep he gets, but it has done a great job of allowing me to identify with many of my flaws as a trader. He doesn't give any quick switch solutions on how to change, but identifying the problem is at least 3/4's of the battle.

My challenge to you is to try this way of thinking for a week.  Take 30 seconds at the beginning or end of your trading day  and make it a goal to identify one way that you can become a better trader the next day.  Write it down, then at the end of the day or week go over your list and see if you have improved at all.  If you can improve on one thing per day, you'll be low on things to jot down in no time.

Thanks for taking the time to read my post,

Akil L. Stokes


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