TRAINING IN THE ZONES

Author

Paul Etwaroo
June 04, 2023

“That is the nature of genius, to be able to grasp the knowable even when no one else recognizes that it is present.”
~ Deepak Chopra

The key to systematic trading is building around what you know you do best.

For the average trader, they never consider that proposition and spend all of their time copying what everyone else says is best.

They never discover their “zone of genius”.

This term was coined by the personal development author Gay Hendricks, who broke knowledge down into four discreet zones:

1. The zone of incompetence: In this zone, you are engaging in something you inherently do not understand or are not skilled at.

2. The zone of competence: In this zone, you are doing what you are efficient at, but recognise that many people are likewise efficient at it, thus not distinguishing your capabilities in any significant way.

3. The zone of excellence: In this zone, you are doing something you are tremendously skilled at. Often, the zone of excellence is cultivated, it's practiced and established over time.

4. The zone of genius: In this zone, you capitalise on your natural abilities which are innate, rather than learned. This is the state in which you get into "flow," find ceaseless inspiration, and seem to not only come up with work that is distinguished and unique, but also do so in a way that excels far and beyond what anyone else is doing.

The average trader oscillates between zones 1 and 2 for years, leaning on external sources of information for ideas, alerts and small, short term bets that make fast money.

They make some good money in strong trends that suit what they just learned, and give it all back during the ones that don’t.

They system hop and stay on high alert for the next big thing.

When I talk to these people, they’re always looking into something (other than their own results).

A new, fancy way of seeing the same old charts that strangers just can’t stop raving about.

It’s been years and they still can’t choose the “right” timeframe.

They still have nothing but “how do you…?” questions for others.

The moving averages keep going on the chart, and off again.

Better trading occurs when you step off the hamster wheel of zones 1-2 and start digging a lot deeper into your innate capabilities.

As experience accumulates, you arrive at zone 3 when you start qualifying information instead of seeking it for it’s own sake and decide that you want to do this properly for yourself.

You start seeking independence and authority in what you do by consolidating your approach around your best results, your unique perception of markets and the edge that comes from increasing degrees of self awareness and investigation of the process, not obsession with the results.

I recently discussed with a former student, a retired teacher who was implementing rules in her system to regulate her time spent in the market and using a more momentum based view in her day trades. She had been overworked in her career and wanted to capture the feel in trading that she had hoped would have come from her professional life. A seemingly small adjustment but her focus, attention to detail and her results went straight up. She’s moving into Zone 3.

Zone 4 is finally reached not with a particular skillset, but by capitalising on the realisation that what you’ve always done best is what you’ll do best in the market. The skills are just a toolkit to complement your unique brand of “genius”.

You go from inspired to informed, then intuitive.

Conventional and capable, to unconventional and truly unique.

The traders I work with are steadily exploring this as we reveal more of what sets them apart and discover new ways to deploy it in markets.

The big wins and the losses reveal elements of nature and character that require more investigation than what’s on the charts and how to “read” it for a shred of that elusive predictability.

Trading becomes more of a creative expression of higher self than a financial pursuit.

The trader in their zone of genius is reaching a transcendent state, where money is a goal but no longer the objective.

They want to maintain the state of staying in the zone.

Potential doesn’t have any financial measure.

Once you understand that, the game becomes infinite.

How to start discovering your zone of genius:

Contemplate your answer to the following questions and consider how well you express them in your trading:

  • What work do you do that doesn't seem like work?

  • In your work, what produces the highest ratio of abundance and satisfaction to the amount of time spent?

  • When you are at your best, what is the exact thing you are doing?

  • What is the feeling you get when you’re doing what you love?

  • What is your unique ability?

The more you integrate these answers into your trading, the more you’ll be training in the zones, from incompetence to genius.

P.

The next CONSISTENCY course starts on July 1st.

There is a presale until June 17 with a $100 discount.