If you’ve moved out of the Exploration Phase and into the Gravitation Phase then you’ve successfully continued to move forward and not in place, and that’s huge. You may very well be ready to advance into the Streamline Phase now. But let’s first make sure that’s really the case before we go further. 

Do you know the strategies that appeal to you, that have stuck around and have shown promise? Do these strategies seem to fit your personality and lifestyle? In other words, do they make sense to you and are they enjoyable to trade (or at least not unenjoyable)? Do you have the availability to trade these strategies? Were their back tested results positive and, if so, were they positive enough? In other words, did you test the strategies far enough back in time and make enough money over that period to justify trading them in simulation and subsequently the live markets? Did your back testing give you a clear idea of what types of market environments caused your strategies to thrive or struggle?

And as you journaled about and reviewed on a daily or weekly basis each and every trade that you may have simulated or traded live, did you discover certain trades that you typically executed with discipline and consistency and which ended up yielding mostly positive results, as well as those that you didn’t seem to execute as well and which therefore didn’t perform as positively? This is valuable information for determining what to keep and what to put aside or throw away.

If you can identify the trades that have stuck around and shown promise then list them out in your journal and commit to focusing at least 80% of your time on them every week. All other trades and concepts, unless you decide to completely scrap them, should only get 20% of your time every week.

This is how you actually get yourself into the Streamline Phase: you must narrow down your efforts to the right things and commit to eliminating or at least to putting aside those things that you don’t like to trade, have been difficult to trade or to understand, or have actually been costing you money. Anything else that has shown a smaller amount of promise or with which you have maintained some degree of interest must be given much less of your time. This is your best chance at reaching consistent profitability sooner than later.

On top of this you have to promise yourself you won’t get distracted by new strategies that look like sure things or all of those promotional emails promising huge returns. Write them down in your journal and come back to them later if you want, but this is a sure way to fall right back onto that hamster wheel. And you want to keep yourself off it at all costs. 

So, again, this is where the allocation of your time becomes even more structured. If you’ve got 20 hours per week to commit to learning how to trade, spend at least 16 hours (80%) on your best strategies and only up to 4 hours (20%) on anything else.

Structuring your time leads to structuring your overall approach and this is very important for becoming the best trader you can be. Once you gain enough knowledge and experience have the bravery and confidence to let yourself be exactly who you are by knowing what you’re good at and what you’re not, and then develop clear plans of action based on these things and execute them in a disciplined way, the markets will happily start offering up those profits. You’re now getting closer to giving the markets what they demand.

Once your time is structured and you’re spending the appropriate amount of time on the right things, putting aside or eliminating the other things and not letting them or anything new distract you, you need to focus on getting good at the right things. Once you’re good at them, you have to continue to focus on getting really good at them. Once you’re really good at them, you have to focus on getting really, really good at them. Once you’re really, really good at them, you have to focus on getting really, really, really good at them. Sensing a pattern here? 

Focus first on getting good at your strategies and then getting even better at them. This is how you make consistent money in the markets. You turn your favored strategies into your strengths and then you constantly work on getting even better at what you’re already good at. This is called the Muscle Phase and you’ll know when you’re in it because you’ll be a much more confident trader with a much clearer idea of what YOU do in the markets to make money. 

Getting better at one or two strategies within specific trading styles will also help you understand other concepts and strategies in other styles that may have eluded you. Have faith in that. So if you’ve had success with trading stocks based on the charts, get better by looking at charts every day and testing your ideas. Within each trading style, like swing trading and options trading for instance, focus on just one or two strategies or concepts at first to make it simple. When you do this you gain more knowledge and experience in the craft of trading, and that strategy in the index futures, for instance, that you’ve put aside because it was hard to grasp may start to actually look a little clearer to you.

Did I narrow my vision, streamline my efforts and get better at my favored strategies?

Eventually, yes. The success I experienced with automated systems in volatility products allowed me to start focusing solely on what became my core approach: automated volatility systems, swing and momentum trading in stocks and market-neutral strategies in options. And my success accelerated from there.

Streamlining my efforts allowed me to get better and better at understanding why my automated volatility systems were successful and gave me the faith I needed to keep running them and increasing my risk capital. I continued studying, testing and trading the short VXX system but also began studying other systems in volatility products, like going long volatility when I wasn’t short. So I got better and better at it until I developed even more profitable automated systems.

This kept me in the markets and allowed me to narrow my vision on my other favored strategies (swing and momentum trading in stocks and market-neutral strategies in options), eventually become profitable at them and gradually become better and better at them and even more profitable. This is how I developed my core approach, which is hugely important for profitability. And the process of getting better also leads to understanding how to become more adaptable with your approach as market environments change, which is hugely important for long-term success as a trader.

I don’t want to make it sound like it’s easy, though. When you get stuck on the hamster wheel like I did, and like so many aspiring traders do, it’s hard to get yourself moving forward again. I’ve mentored traders who were firmly stuck on the hamster wheel and I remember thinking they were very close to getting off and getting themselves moving forward again but just needed a nudge.

One of the individuals I briefly mentored gave me a list of ten different trades that he had back tested, simulated and traded, as well as the results of his efforts. A few of them that he liked had been showing some promise but he had reached out to me for mentoring because in spite of some good results he needed someone to give him guidance on how to proceed. The poor guy was not only getting pulled around in all different directions by so many different trading styles but also all the different strategies within each style. This is what can make it so difficult to emerge from the Exploration Phase unless you really focus your efforts. He was obviously leaning toward spread trading in options like me but he had five or six different strategies within that trading style that he simply couldn’t choose from. 

I honed in on that trading style and told him it was best that he continued to focus on it. I told him to choose a few among them that he liked the most and had shown the most promise (there were definitely a few of these on his list, like I said) and to keep working hard on these, but I could tell after a little time working with him that what he really wanted – and this had been common with many aspiring traders seeking mentoring – was for me to give him something that worked all the time because he was tired of running into the same walls with the same strategies and hopping around among them. This is a prime example of the hamster wheel and can be extremely difficult to free yourself from it. He just didn’t want to stick with one strategy or approach and get better through adversity. But that’s the only way he was going to get better.

Traders who are stuck on the hamster wheel don’t want to hear that they need to keep working on the things they’ve already worked on because of the pain they’ve experienced and sense of futility they’ve felt. They may believe those strategies just don’t work or they just don’t want to feel the pain of another loss so they avoid them and look for new and promising things to trade. At this point they become desperate for someone to give them something, anything, that just works all the time.

But this is where it becomes so important to really narrow your vision and focus on getting better at the strategies that have stuck around and have shown promise. It forces you to really understand the strategies, which leads you to understand exactly why they don’t always work. And it’s just as important to understand when and exactly why they do work. You have to understand them inside and out by studying them, back testing them, simulating them and trading them live.  This is how you start to understand them on a deeper level and to make them your own. And this is also how you start to understand them in relation to changing market environments, which is hugely important for developing the ability to adapt and stay flexible and become a consistently profitable trader on a long-term basis.