Book Review: How to Fail at Almost Everything and Still Win Big by Scott Adams
I'm almost positive that I mentioned this before. In case I didn't, here's the gist with book reviews. I try to finish at least one book a month. Although reading a physical book isn't the most convenient, I'm not going let this be an excuse. Instead, I use Audible.
The more I thought about this saying, the more it made sense to me. I even have my own interpretation of it.
Your life is in an ever-changing state. When was the last time that your plans changed at the last minute? This has probably happened at least once, maybe more than once. This is simply because there are always uncontrollable factors that will impact your plan in some way.
The same applies to goals, isn't that what a plan really is? Specifically, you're taught to set SMART goals. Specific. Measurable. Achievable. Realistic. Timely. Whether the reason is within your control or not, what happens when you don't reach your goal? You fail. What do you do then? You can learn from it and then set a new goal. If you this goal is easily reachable, then this diminishes your sense of accomplishment. If you set very high goals, then you'll always risk failure.
What I believe Scott Adams is getting at is that setting goals is unproductive. You should have a system. Specifically, he says that systems essentially improve your odds of success.
Let's take weight loss for example. Your goal may be to lose ten pounds over the next six months. How will you work towards this goal? What happens if you fail? How do you know that this is realistically achievable?
Instead, focus on devising a system of what diet and fitness are. Stick to this system by planning out what you eat and how you exercise. This will greatly improve the odds of reaching the outcome of losing weight.
The same, I believe, applies for trading. If your goal is to make x-amount of dollars per month, how do you know you can do it? Instead, it's more important to focus on a (trading) system. I'm sure you've heard this phrase being thrown around in a lot of trading communities and forums, but what exactly does this mean?
The trading system is what you will do to increase the odds of you making x-amount of dollars per month. Let's say this number is $3,000. How exactly will you tilt the odds in your favor to make it more likely for you to make $3,000? Unfortunately, I cannot answer this as everybody's system is different.
However, I'll talk a bit about myself. I'm still developing myself as a trader. I've felt that I wasted a lot of time with the pursuit of a holy grail strategy. However, I never really focused on developing my system until the past year.
With the start of this site, I've more or less formulated my strategy. I have a system in place to overcome one of the biggest challenges - the mentality or psychology associated with the different aspects of trading.
To reflect on my system, here's what I've been doing to develop my mentality:
In addition to finishing at least one book a month, I try to draw one takeaway. When I re-listen to the book, I draw another takeaway. For this month (and a half), I finally finished listening to "How to Fail at Almost Everything and Still Win Big" by Scott Adams.
Who is Scott Adams? Dilbert. Need I say more? Scott Adams is the creator of Dilbert. With the power of Google in your hands, you can look up the rest.
So what exactly did I think about this book?
"Loser have goals. Winners have systems."
The more I thought about this saying, the more it made sense to me. I even have my own interpretation of it.
Your life is in an ever-changing state. When was the last time that your plans changed at the last minute? This has probably happened at least once, maybe more than once. This is simply because there are always uncontrollable factors that will impact your plan in some way.
The same applies to goals, isn't that what a plan really is? Specifically, you're taught to set SMART goals. Specific. Measurable. Achievable. Realistic. Timely. Whether the reason is within your control or not, what happens when you don't reach your goal? You fail. What do you do then? You can learn from it and then set a new goal. If you this goal is easily reachable, then this diminishes your sense of accomplishment. If you set very high goals, then you'll always risk failure.
What I believe Scott Adams is getting at is that setting goals is unproductive. You should have a system. Specifically, he says that systems essentially improve your odds of success.
Let's take weight loss for example. Your goal may be to lose ten pounds over the next six months. How will you work towards this goal? What happens if you fail? How do you know that this is realistically achievable?
Instead, focus on devising a system of what diet and fitness are. Stick to this system by planning out what you eat and how you exercise. This will greatly improve the odds of reaching the outcome of losing weight.
The same, I believe, applies for trading. If your goal is to make x-amount of dollars per month, how do you know you can do it? Instead, it's more important to focus on a (trading) system. I'm sure you've heard this phrase being thrown around in a lot of trading communities and forums, but what exactly does this mean?
The trading system is what you will do to increase the odds of you making x-amount of dollars per month. Let's say this number is $3,000. How exactly will you tilt the odds in your favor to make it more likely for you to make $3,000? Unfortunately, I cannot answer this as everybody's system is different.
However, I'll talk a bit about myself. I'm still developing myself as a trader. I've felt that I wasted a lot of time with the pursuit of a holy grail strategy. However, I never really focused on developing my system until the past year.
With the start of this site, I've more or less formulated my strategy. I have a system in place to overcome one of the biggest challenges - the mentality or psychology associated with the different aspects of trading.
To reflect on my system, here's what I've been doing to develop my mentality:
- Model my trading after poker. In short, it's developing this mentality that taking losses is okay. In fact, it's perfectly fine because some plays will work out while others do not. However, it becomes a game of risk management where you want to win big, but lose small.
- Podcasts. I have a few podcasts that I listen to on a very regular basis. By "regular", I mean within 24 hours of the episode coming out. These podcasts reinforce the idea that I need to focus on myself and nobody else. They help me realize that I don't need to focus on following others and trying to do what they do. I need to do what works for me.
Here's a list of the podcasts that have helped me: - Journaling. This blog is currently being treated as a journal. Not only do I document my trades (not all), but I may write about other topics that I feel I need to get off my chest. As such, I don't quite necessarily classify this as a trading journal, but rather a psychology journal. In a way, it documents my mentality as well. However, you've probably noticed the progression of posts that focus on trade reviews. I expect to write a lot more of these as I dive deep into my thought process of taking these trades. In a way, having the obligation to post the trades here helps keep me in check. Whenever I take a trade now, I have this trigger in my head - when I have to write about this trade, can I explain why I took it? If not, then I won't take the trade.
- EdgeWonk. Yes, I'm also looking into a trade journaling software. Since it's not realistic for me to keep track of every trade to talk about later on, EdgeWonk is currently the most optimal solution for me to quickly enter in the trade details for later review.
Due to my current situation with finances, I expect to purchase the full EdgeWonk version in May. It's going to take me some time to backfill all the data, but I do believe that this is a necessary step to keep me accountable.
That's enough reflection for now. I will be starting my next book very shortly.