It’s perhaps one of the greatest guitar riffs in the history of rock and roll. You know the one. The little ditty that intros and is intermittently revisited throughout the Eagles’ hit “Life in the Fast Lane.” (And, yes. I realize you’ll now have this earworm running through your head for the next three hours. I’m sorry, or you’re welcome.) That catchy little lick can make you a better option trader. Let me explain.
Training for Option Traders and Rockstars
If you’ve ever taken a crack at learning guitar, you know you’ve got to loosen up those fingers. Get ’em moving. The best musicians all have their routines. As this story goes, one night Eagles guitarist Joe Walsh was in his dressing room warming up for a show. He had this, well, series of notes basically that were really hard to play in this particular order. So, he’d play the bit over and over to warm up. As he was playing it this night, Don Henley and Glenn Frey happened to walk in the room and dug it right away. That little warm-up exercise became the main hook of the song “Life in the Fast Lane.”
And, man, doesn’t it sound effortless? Yeah. It does. And that’s probably because for Joe, it IS effortless. He played the thing a million times. If you do any one thing that many times, you can’t help but get good at it. Some people call it the “10,000-Hour Rule.” Athletes call it muscle memory. William S. Burroughs called it “Doing Easy.” (Weird rabbit hole to go down, but if you like beat poets and such, it’s interesting to read up on.) It’s a time-tested concept I wish I’d invented. But I didn’t. I’m just borrowing it from basically all the greats there ever have been in any discipline—including the best option traders.
Options Trading Practice
If you think about it, there really aren’t a lot of actions to take as an option trader. You can buy or sell calls or puts. Get in, and get out. That’s it. Over and over again. Granted, there are steps, logical progressions and nuances. Reasons for buying or selling the calls or the puts. And we need them to be tight. Thus, the more systematic you make your option trading, the better for LOTS of reasons.
Traders want (or should want) consistency. If you’re always taking different steps on your trade entries or exits, always doing it differently, you definitely won’t have consistent results. (I figure I don’t need to overexplain that part. It’s what our Founding Fathers would call “self-evident.”)
Moreover, as option traders, we always seek the best way of doing things. While this constant seemingly Sisyphean quest is the plight of all option traders, as we strive to improve, our methodology continues to get better. Naturally. We get to a level, that’s good. Keep working it out. Then learn more. And get it even better. Rinse. Wash. Repeat. As they say.
Further, you know what can really mess you up as a trader? Stress. You know what stress is caused by? One thing and one thing only: uncertainty. If we’re always reinventing the wheel and trying to refigure it out every time, well, that’s the definition of uncertainty. You will trade worse if you do that. But if you know what you’re going to do every time, because it’s the same thing you did the last time, you will trade better. I’m breaking it down to first principles here.
It’s about practice. I always used to think it was weird that doctors and lawyers refer to their business as a “practice.” But one day I realized why: because they are still PRACTICING! No mystery, really. The best of the best are always practicing—at whatever they want to get good at. Maybe we as traders should call our “trading business” our “trading practice.” It might be nice to have that little reminder that to become great, we must keep doing this one thing over and over and all the little nuances eventually become simple. Practice. And that, my friends, is the most rockin’ lesson I can share.
Founder and President
Market Taker Mentoring, Inc.