On Writing for Clarity in Your Trading

My new book, Trading from Your Gut, is about to go to press. It will be my third book, and on shelves in January.

Some people wonder why I bother to write books at all. Why not just trade or do something else that pays much better than writing?   After all, the legendary writer and grammarian EB White himself wrote that ‘writing is hard work, and bad for the health.’

Some trading authors are not traders; they write because their business is trading education and training. They sell seminars and courses. They write because it helps them gain a following for these other products.

From my personal experience, a small minority of trading authors are primarily successful traders. Why do these traders write? No doubt some write to spread their fame. One can be very successful without necessarily being well known as a trader. A good book will certainly increase one’s fame in the small corner of the world that cares about trading. This may make it easier to raise money or build a trading business. Nevertheless, I suspect this is not the primary reason that some of the best traders have written books.

I suspect that the successful traders who write books write them for two other reasons: first, because they themselves were taught by others and feel a sense of obligation to return back to others what they themselves received; second, because the process of writing a good book forces you to clarify your thoughts.

I find this second reason most compelling, the forced clarity of thought required to write a good book.

I have learned more about trading through the process of writing my books than I have learned by almost any other effort I have undertaken. In order to write well, I must understand a topic at a much deeper level than that required to merely operate that topic. Writing is about making choices and decisions; ranking and rating; and building foundations and structures to bring clarity.   If I am to finish a book, then I need to put down actual words that mean very specific things. In order to do this, I must have my thoughts very clear and organized. Writing forces me to be clear about what I think. So I spend a lot of time thinking while I am writing.

I encourage you to write about your trading to help clarify your own thoughts; even if only for yourself or a small circle of friends or advisors.

Write about why you trade the style you do. Write about what it is that makes you believe that you can make money using that style. Write about why you trade a particular strategy if you do. Write about what it is that makes you believe that strategy will continue to work over time. Write about why you trade the markets you do. Write about why you believe the mix of markets you trade makes the most sense for you. Write about why you are using the broker you use.

Write as if you were trying to convince another of your rationale; as if you were writing a book on trading. If at times, as I often do, you find yourself unable to write on a particular topic or issue, think harder. If you don’t have anything good to say, if your thoughts remain unclear, then you need to do more research. Perhaps you have uncovered an area where you haven’t fully developed your thinking and this in turn may be causing you to be less confident in your trading. By writing, you will surface these undeveloped thoughts so you can work to improve them. Through this process, I believe you will find, as I did, that you will learn more about your trading and improve in your own trading.

Tagged as: Authors, Clarity, EB White, Forbes, Jim Cramer, Learning, Trading, Turtle trading, Writing