Trading probably already looks like a video game to many of us. In fact there are many examples of professional video gamers, also being traders. And it makes total sense really, as the typical competitive video game is about recognizing particular events/patterns in the game, and taking advantage of them quickly when they occur. The similarities are pretty obvious if you think about it. But actually there can be a lot to be gained by creating “games within the game” in order to improve your performance.
You may have heard of the term “gamification”. If you haven’t, essentially it just means to turn something into a game. We humans have a tendency to be competitive by nature, and we like to demonstrate we’re “the best” at things by means of things like rankings, scores, grades, and other such identifiers. Why is everyone always wanting to know who the richest person in the world is? Does it really matter to anyone? Probably not, but we still can’t help but want to know! That’s gamification in every day life.
When it comes to trading, there are times you may want to actually gamify your own performance, in order to push yourself to achieve more, to be better, to go further. This can be a great measurable way to work on your performance at a particular thing. For example, imagine you have a particular setup you’re working on. You’ve gotten fairly good at it, but maybe you’ve plateaued and don’t seem to be really progressing. What can you do?
Gamify it! How many winning trades in a row can you get with that setup? Establish a personal best, then try to beat that. How many days in a row can you end with a positive P&L? How tight can you get your MAE after a day’s trading? The possibilities are nearly endless. The important thing is that there be a quantifiable, measurable goal to aim for and attempt to beat. You can even give yourself “prizes” if you want, rewards for succeeding in beating your “high score.”
This can extend to any area of your life really. I recently gamified my fuel consumption when driving! We got a new car last May, just before the supply chain world went stupid. But now, gas prices are of course completely insane. I barely ever drive as it is (once a week to get groceries and that’s about it), but still the amount of fuel I was burning was bothering me, so I began to think of what I could do about it.
This car has a “new to me” feature where it tells me the average fuel efficiency of the car, and also the fuel efficiency “RFN” (Right Fracking Now, as Jeff Mayem would say). This is a moving average! So I began to play a game a couple weeks ago. How high can I get the average fuel efficiency? It was at just under 20 MPG (I have a bit of a “lead foot”, I admit it…). But by playing a game with myself where I attempt to drive in such a way as to keep the “RFN” average, as far above the total average as possible, I can gradually pull up the overall average. As of today, it’s at 21.5 MPG.
The parallels to trading are quite interesting. Obviously in order to raise the average I have to adjust how I drive. I drive more slowly/smoothly overall, am much less aggressive “off the line”, try to do less stop & go, choose my lanes and routes more carefully, etc. But just like in trading, sometimes you find yourself in a situation where you have to “hit out”. In driving, this could be having to stomp on the gas to get out of the way of someone who just merged into you, or accelerate aggressively in order to merge into traffic, or come to a sudden unexpected stop because any number of reasons.
And that’s all fine, as long as I don’t “blow up” (crash the car), and don’t completely wreck my “P&L” (Average MPG), I can just go again and keep chipping away at my Personal Best, playing the game to the best of my abilities.
Try it some time if you have something specific you want to improve with your trading. Turn it into a game. Make it fun. After all, in trading we’re only ever truly competing against ourselves anyway!
Until next time, good trading!
Jonathan van Clute
Community Manager, Trading Research Group