Blueprint for an Uncompromised Life Part One: Constancy of Purpose The phrase "constancy of purpose" captured, for Deming, what quality is all about in organizations. Plenty of companies have mission statements, but few seem infused with a sense of mission. Jeffrey Liker's book "The Toyota Way" makes clear that what makes that firm unique among its competitors is not a set of superior production tools. Rather, at all levels of the organization, there is an abiding belief in a production system that relentlessly seeks incremental improvements. The "lean" organization eliminates all that does not contribute to quality for the customer-- whether the customer is internal (the next group of people in the production process) or external (the purchaser of the end product). My review of individuals who are widely considered to be great within their fields-- athletics, science, arts, leadership--finds that they are lean in the same way. They find a field that captures their imagination and interest, and they tinker at it and work with it until they reach a high level of mastery. This constancy of purpose is driven by a love for the effort itself: a chess grandmaster or Olympic athlete seeks out opportunities to meet challenges and become the best they can be. Taxing the production system and occasionally shutting down the production line is essential to Toyota's success. Until you test the limits of your system, you can't know where the weaknesses are. The highly successful individual is one who craves such tests. This is what Nietzsche meant when he said, "Under peaceful conditions, the warlike man turns on himself." The psychologist Abraham Maslow made a crucial distinction between individuals who are driven by needs and those who pursue values. One is engaged in the elimination of deficit states; the other seeks to accomplish positive ends in their own right. He believed that, once basic needs were met, individuals would be free to actualize their greatest potentials. Yet it is not that simple. Many people have their basic needs more than met and yet display little constancy of purpose in their own lives. Ed Seykota noted that good traders have talent, but--with great traders--the talent has them. So it is in any field. Constancy of purpose comes from the capacity to become absorbed in one's pursuits, to find them inherently challenging and meaningful, and to allow oneself to become a vehicle through which talents and skills are expressed. That requires finding one's productive niche. Not a job, not a career, but a calling. How many traders fail to succeed at their work--how many people fail to succeed in life--because they have not found that niche that fits their talents, skills, and interests? Constancy of purpose is a natural outgrowth of finding a niche: When you're doing what you are meant to be doing, it is difficult to veer from the path of quality. Blueprint for an Uncompromised Life - Part Two: Devotion to Development Perhaps the key take-away idea from my forthcoming book is that greatness is the outcome of a prolonged developmental process. It is not merely something people are born with, nor is it solely the result of hard work. Greatness lies at the intersection between talents (inborn capacities), skills (acquired competencies), and interests (personality). When these three variables come together early in a person's career (or life), it is as if an emotional spontaneous combustion results. Psychologist Howard Gardner refers to this as a "crystallizing experience": an encounter with a field that is so profound and meaningful that it organizes and sparks all future efforts. The developmental process of extraordinary achievement begins with immersing oneself in a field for the sheer joy of the immersion. Because the work fits so well with talents, skills, and interests, it no longer seems like work. It is a kind of purposeful play, but it is driven by what Maslow called the "peak experience"; by the sense of "flow" described by Csikszentmihalyi. Only later is this purposeful play channeled into directed efforts at mastery, through interactions with mentors. Developmentally, greatness begins in play. It is ironic that most individuals fail to achieve their potential stature, not because they don't work, but because they have never found that purposeful play that results from crystallizing experiences. We fall into career fields without sampling what we'd truly love; we fall into trading styles based upon what we hear and what we're taught--not from purposeful play across markets and trading styles. In Part One, I highlighted "constancy of purpose" as a crucial element of extraordinary achievement. This constancy doesn't come from guilt or even from normal motivation. It comes from a deep, emotional desire to sustain the flow experience by extending one's mastery. Every creator experiences a kind of runner's high and, like any runner, has to run every longer and faster to reach the experience. In that sense, greatness is a kind of positive addiction: it provides its own reward. The longstanding truism in the research on greatness is that it takes at least a decade of dedicated effort to reach expert levels of performance in any field. That decade is typically guided by the mentorship of others who are accomplished, particularly as the developmental process proceeds from the achievement of competence to true expertise. In every performance field I have encountered, expert performers spend more time in learning, preparation, and practice than in actual performance. Indeed, their intrinsic levels of motivation drive them to do nothing but that. It is in the course of mastering a domain, that these performers master themselves and undergo deep psychological change. Mastery of any field inevitably also brings self- mastery. Blueprint for an Uncompromised Life - Part Three: Resilience One of the most notable findings in the research on extraordinary creative achievement is that even the greatest performers in their fields produce the same ratio of undistinguished works to notable ones through their careers. Great scientists conduct many unsuccessful experiments; outstanding artists produce many paintings and works of music that never win recognition. Many of the greatest home run hitters have are also leaders in strike outs; the most successful companies, like the best actors and directors, also produce many flops in the marketplace. What makes the expert performer distinctive, researcher Dean Keith Simonton has found, is that he or she is so productive that it becomes more likely that enough successful experiences will accumulate to leave behind a legacy of achievement. We can think of this in evolutionary terms: the great individual produces many more mutations than the average person. Most of these mutations die off, but those who have produced the most variations will, in the end, have the best chance of being represented among the survivors. This has huge relevance to trading, as it is not necessarily the case that the most successful traders are the ones with the highest ratio of wins to losses. Very successful traders have typically undergone very significant losses. Because, however, they stay in the game longer--through sufficient capital and superior risk management--they are more likely to eventually enjoy and compound the large winning trades than the average trader. What this means is that a prerequisite of a high level of success is a high level of resilience with respect to loss and defeat. If the greatest individuals are the ones who are most productive, they will also be the ones with the most failed efforts. Research on psychological resilience suggests that people can survive and even thrive in conditions that others find traumatic. Their coping methods enable them to find meaning and purpose even in the greatest adversity, and they are most likely to maintain social and emotional ties during the hardest times. In my own studies of traders, I have found a correlation between the success of the trader and the degree to which the trader utilizes problem-focused coping and a coping mechanism called "positive reappraisal". The successful individuals deal with problems as they occur, rather than become wrapped up in blaming of self or others. After they have dealt with the problems, they look back on their experience and try to take away something positive from the experience. For them, adversity becomes a tool of learning--not a defeat. There are traders who are defeated by losses and there are traders who cope with losses. The highly successful individual, however, is the one who turns losses into gains by generating learning experiences and continuous self-improvement. Blueprint for an Uncompromised Life - Part Four: Enhancement of Perception As I researched a variety of fields for my new book and examined the ingredients of expert performance, one set of findings jumped out at me. Because highly accomplished performers undergo a lengthy training (formal or informal) through their immersive developmental process, they acquire unique perceptual skills. Years of painting, experimenting with different materials, and closely observing their subject matter enables artists to *see* the world in fresh ways. Similarly, the iterative trial and error process of experimentation allows scientists to perceive unique relationships in nature. Much of this enhancement of perception is a function of cognitive organization: expert performers learn to identify meaningful relationships and use these to organize and interpret what they see. This is how an expert physician, for example, can rapidly diagnose and triage patients in a busy emergency room. It is also how a hockey player learns to skate where the puck will be, not just where it currently is. It is difficult to appreciate that expert performers do not see the world as do others. Chess grandmasters see a different chessboard than novices; a baseball hitter sees the release of a 95 mph fastball differently than a fan. Experts see the world in terms of meaningful relationships--and because they have acquired a huge library of such relationships after years of observation and practice--they develop elaborate mental maps for guiding their actions. This has immense relevance for trading, where expert traders see markets differently from beginners. An expert trader might look at a depth of market (DOM) display and notice that, at a prior support level, large traders are pulling bids when they're being hit, but that they are not doing the same with their offers. That allows the expert to sell the market while the rookie is staring at a chart, counting on support. Similarly, an expert trader observes what is happening in gold, other metals, emerging equity markets, currencies, and interest rates and sees a transition from an expansionary, inflationary market to one that is counting on contraction and a tightening of monetary conditions. The rookie simply sees falling markets and oversold levels on a short-term oscillator. The expert, in general, develops a richer, more complex, more meaning-laden map of the world than the novice. Because of that, the expert also lives in a subjective world that is more filled with meaning. A gourmet meal means much more to a connoisseur than to the average person; an accomplished artist sees more in a sunset than the average Joe. In enhancing ourselves, we enhance our enjoyment of life and make the most of our experience while we're here. The development of expertise is not simply about becoming a great trader, athlete, leader, or artist. It is about cultivating the richest experience of life possible to each of us. Blueprint for an Uncompromised Life - Part Five: Multiplier Effects We have seen that expert performers in their fields undergo a very specific developmental process, beginning with crystallizing experiences, mentorship, and the achievement of competence through structured practice. Equally important, expert performers follow a different developmental trajectory from their less accomplished peers. This developmental trajectory takes advantage of what researchers call multiplier effects. A simple example from Sandra Scarr's research on intellectual development will illustrate the power of these effects. Young children with high and low IQs follow very different life paths on average, though they start from similar upbringings. This is because the high IQ children tend to seek out higher IQ peers and thus receive more intellectual stimulation from their environment. They also are more likely to be targeted for enriched academic experiences. Over time, these differences compound, creating multiplier effects and widely diverging developmental paths. Consider two intern traders at a trading firm: one shows initial talent for reading short-term market patterns, the other picks up the patterns more slowly. Initially, their P/L differs only modestly. The quicker student, however, is selected by the firm's top trader as a member of that trading team and is given extensive mentoring. The slower student is not provided this enriched experience. As a result, by the end of the year, the two students are following very different career paths, with a wide performance gap. We see a similar phenomenon when children born earlier in the year have physically matured to a greater degree than children born later in the year and hence tend to be selected for enriched Little League and other athletic experiences. The initial gap in performance widens as the mature children are provided superior experiences relative to their peers. Multiplier effects mean that what is inborn to the individual--talents--help to shape environmental experiences that in turn maximize these talents. Highly successful individuals place themselves in environments that take maximum advantage of their interests, talents, and skills. Nothing is more important for traders--and people in general--than to find their niches: those settings that will help them make the most of who they are. Many traders think they are not reaching their potential because of emotional blocks. Often, however, their performance blocks are of a very different nature: they are not trading the markets or styles that capitalize on their talents and supercharge their learning and P/L through multiplier effects. Brett Steenbarger