You are currently viewing Life hacks and learning to trade

Life hacks and learning to trade

One of the interesting developments of the past ten years is the gradual death of the “life hack” approach. This is a good thing. The reason this movement has died is because most “hacks” simply don’t work. But if you’re trying to develop a trading approach, you need to be careful because life hacks are alive and well in the trading community—and they still don’t work!

What is a lifehack?

I’m not an internet historian, but it seems to me that lifehacks really sprang on the scene along with the internet. Once it was easy to put up a webpage, people starting sharing cute little tips and tricks to do everyday tasks in a new and easier way.

While these were often intended to be fun or entertaining, but many of them promised to save you time or money. Some of these might actually have been useful, but it was always as much about generating traffic and views as the quality of the content.

As the internet matured and video content exploded, so did lifehacks. Many of these centered around food and cooking, and some of them were absurd. It became clear that novelty was much more important than value. Having a background in professional cooking, I felt especially empowered to evaluate these food-related lifehacks. I remember watching one particularly absurd video where the creator (who was utterly without any culinary skills) was explaining why everyone in the world was making crepes wrong… as she made inedible ugly pancakes and called them crepes.

We went through a period somewhere around 2010 where we became obsessed with efficiency and productivity—people were telling you how to be proficient in language in a month, learn a musical instrument as well as a professional in six months, and on and on.

Of course, these were all empty promises and the world mostly moved on, but there are some lessons we must not miss.

The value of Deep Work

To achieve anything of significance, we have to focus time and attention on the task, and this is true in virtually every discipline. In a world driven to frantic distraction, this ability to focus on a task has almost become a rare superpower. Hints that you can get really good at something without investing time, energy, and passion are simply lies. There are no shortcuts to achieving true expertise.

Cal Newport has written a great book on the subject called Deep Work. (That link is an affiliate link. Purchasing through that link helps support this blog.) If you feel you’re struggling with distraction, doing a thousand things and none of them very well, reading that book might help you find some perspective.

Doing deep work in trading

One of the few places where life hacking still runs rampant is in the field of trading, perhaps specifically on Twitter. Have you seen posts like any of these?

  • Simple charts of candlestick patterns. The idea is that these patterns predict which way the market is going to go.
  • Tables of favorite moving averages, as if there’s some significant difference between the 20 and 23 period moving averages!
  • Contradictory phrases intended to sound impenetrably wise: “If you try to avoid a loss you have already lost.”
  • Cherry picked backtest examples showing equity curves from systems or algos for sale.

Part of the problem is Twitter’s character limit; 280 characters provokes a superficial, “soundbite” approach to any subject, and this is why I think that “FinTwit” might be doing a lot more harm than good.

So what should we be doing?

Well, first, realize there are no shortcuts. Though an expert in a field might be able to see something at a glance a student could never see, getting to that stage of expertise takes a long time and a lot of exposure to the data. (But we’re also not arguing for the classic “10,000 hours”. That, ironically, is yet another lie!)

Most of the “great truths” in any discipline are relatively simple. If you find yourself lost in complexities (Elliott Wave, I’m looking at you!) then you might be on the wrong path. Reduce everything to bare essentials and start there. For markets, those bare essentials run something like this: “Financial markets are highly competitive and noisy. They move randomly or at least almost-randomly most of the time. It’s not easy to make money consistently in markets. If I’m going to make money, I have to find something that gives me an edge in these difficult markets…”

These essentials begin to fit themselves together into a whole that might somehow seem to be greater than the sum of the parts, but it takes some patience to have all the pieces to fit together.

Commit to doing the deep work, and don’t give up. You don’t have to work hundreds of hours each month, but you do have to be passionate and engaged in what you’re doing. You might even have to love what you’re doing; you don’t see many people achieve real excellence unless they love what they’re doing.

I’ll be sharing some blogs on closely related topics—how to do deep work, how to hone your focus, the importance of sleep in learning, using forgetting and distraction to your advantage, and how to tap your creativity. Check back soon for more!


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.