Jun
9
The Importance of Routine, from Victor Niederhoffer
June 9, 2010 |
I believe the absence of routine may be a critical factor in creating failure. All the distractions, including the physical and mental act of taking phone calls is enough to throw a game off. I liked to do very normal things throughout a tournament, as I reached the finals, and I would recommend that for a trader. Whatever you do, don't use the hands and mid level organs before you play.
Nick White comments:
I also hold that routines are essential to success– no doubt about that. But is there some wisdom in allowing for the fact that life throws the odd curve-ball? Are there circumstances whereby following a usual routine will get one badly hurt or killed (market or otherwise)? What ought to be done when a personal disaster strikes 2 minutes after one has placed their largest position and it then gaps half a percent against? What principles of training facilitate adaptation to the wild rather than adaptation to the expected?
One society in history seemed to grasp this - the Spartans. Their routines seemed to emphasize preparation for both the expected and predictable, as well as to develop faculties, skills and resources to deal with that which was difficult to prepare for…in other words, to build up so much personal and corporate redundancy in capabilities that there was very little (bar hubris) that could steal the victory.
Jeff Watson writes:
Whenever I am in any kind of competition, trading, poker, surfing, whatever I try to follow the same script., In poker, for example, I pick up the cards the same way every time, look at them once and leave them face down on the table. I handle my chips the same way every time and time my reaching for the chips do it in the same manner. I keep the same vacant look on my face and time my eye blinks. I keep conversation at a polite minimum as tremors in a voice can give away tells. I wear a high collared shirt as I don't want a pulsing jugular to be seen. I have several other proprietary methods to minimize any tells and other methods to create false tells. still, according to one of the ex-world champions of poker, I have less tells than anyone he's seen, but the tell I have makes him able to read me like a book. From past results, I believe that he's telling the truth.
Nick White asks:
Can tells in a closed-form game compare to tells in a wild environment? If one lost a comparably ruinous percentage of bankroll in the market as their poker game, would the displayed tells be the same? Or concealment easier?
Comments
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One straightforward approach to routinizing is to automate one’s trading and risk management, but Chair has written elsewhere against this practice.
“still, according to one of the ex-world champions of poker, I have less tells than anyone he’s seen, but the tell I have makes him able to read me like a book. From past results, I believe that he’s telling the truth.”
Similarly I generally have a powerful and flawless tennis game, constantly winning big tourneys, but Nadal just seems to have my number, at least on clay. On the plus side, it keeps me humble. I can’t say enough about the importance of humility.
[…] leave a comment » I write a comment on Daily Speculations discussing my playing style in poker. I try to make every move the same, with no variance in order to eliminate tells. So far, this method has worked for me for the past 40 years. The post went along very well, with much good info being passes, a meal for a lifetime, when an anonymous poster had to chime in. I had said, “‘I have several other proprietary methods to minimize any tells and other methods to create false tells. still, according to one of the ex-world champions of poker, I have less tells than anyone he’s seen, but the tell I have makes him able to read me like a book. From past results, I believe that he’s telling the truth‘ I didn’t think much of this as that’s what has been said before in the past. However, some anonymous doubting Thomas with the nom de plume, Narcissus decided to make himself feel better by bringing me down by saying, ““still, according to one of the ex-world champions of poker, I have less tells than anyone he’s seen, but the tell I have makes him able to read me like a book. From past results, I believe that he’s telling the truth.” […]
Routine is essential to success regardless the sport, activity etc. that one may discuss. There are undoubtedly many psychological reasons for this. Comfort and familiarity are two that come to mind. This allows the mind and the body to be able to relax and perform at the highest level.
I have trader friends who trade only in the morning when they are the freshest. They take the afternoon to do their study, reading, research etc. When they are trading, they will not use the phone, e-mail or do any other multitask work.
Jerry Rice talks about putting on his gear the same way and in the same order every time before a game.
Pete Maravich wore the same socks throughout his career. Michael Jordan ate a steak before a game. Coach Wooden stressed the fundamentals and all his players learned to bank their shots off the backboard.
Tiger Woods goes through the same pre-shot routine on every shot. In putting he takes the same amount of time in surveying and stroking a 6 foot putt as he does a 300 yard drive.
Baseball players are notoriously superstitious and have their own warm up regiment before stepping into the batters box. Watch David Ortiz sometime. Mike Hargrove was called the human rain delay because of the length of time he took to adjust himself at the plate. Pitchers success improves with the same number of days rest in between starts.
Roger Federer bounces the ball the same way and in the same number of times before he serves.
Why do this? It gives one just that little bit additional edge that may provide the difference between success and failure. Remember the difference between winning the Kentucky Derby and finishing second can be as little as a nose. The prize pool difference is over a $1MM between first and second place.
Evidence. The home team in professional football is generally viewed as having a home court advantage of 3 points. A professional basketball team is seen as having a huge home court advantage especially during playoffs. Much of this has to do with travel and sleeping in their own beds before the game.
This is not to suggest that this alone will guarantee success. It does suggest that the chances of success improve with the right type of routine. From there, I suggest the person incorporates the Marine motto “Adapt, Improvise, Overcome”. For traders the mantra is that once you have a position “Manage the Trade”
The only problem I have with becoming too married to a routine, is how I become completely disjointed when I break with it.
In this case, I try more for a healthy balance than perfect execution.
PS - Jeff W: don’t let that guy get under your skin. Anonymity breeds a braver and more brazen persona.
Narcissus intended only a gentle razzing and is sorry to hear of your sister’s situation, wishing the best for her full recovery.
Research with a similar train of thought: http://www.nytimes.com/2009/05/01/opinion/01brooks.html?scp=1&sq=Genius:%20The%20Modern%20View&st=cse
This topic lends discussion to analysis of systematics and automation within given domains or states of operating.
We may wonder how related issues apply to terms of standards and practices relative to program trading and portfolio management.
Upon reflection, when reading stories of those who have “done it all,” from rise to fall to comebacks, well, it seems the routine operated within a given system, which begs the question…
What was personal routine and what was merely following (or not following) the rules of the system?
dr
I thought the picture the web mistress victoria put up was me because I patented the method of wearing a sock on the hand. it won many matches for me, and not only because i couldnt afford or always lost gloves in the cold and the socks prevented blister. the main reason it good was that it prevented me from having to shake hands in locker room . ” oh, I”m sorry. i didnt know you were injured”. nothing worse than having to shake a dozen hands in the locker room ” good luck , vic”. the distraction was even worse than what stosur received by taking all those terribly losing phone calls from the ex champs. vic
Preparation is the key to success, routine is key to applying undistracted preparation. In University I would routinely end exam preparation an hour before the test, and listen to side one of Pink Floyd’s “Atom Heart Mother” while meditating quietly with eyes closed. My marks were generally the highest in the class and the routine worked well in all instances save one lonely “B” on the transcript which was clearly the result of being unprepared.