When we’re children we’re always obsessed with the latest ‘craze’. Yo-Yos, roller skates, Tamagotchi, Pokemon… across the decades, the list is endless.
Maybe some of us think we grow out of these phases, but I am constantly surprised and find it hilarious when I see online communities of traders going through similar crazes with trading approaches and systems.
As soon as one ‘special’ system pops up out of nowhere, it’s soon forgotten in a matter of months or years once people realise it’s not the Holy Grail, and then the search continues for the next ‘Big Thing’.
Ichimoku vs. Jiro
The most recent one I’ve heard a lot of discussions about is the Japanese trading system Ichimoku Kinko Hyo and variations of it. The explanations of how it works seem to vary and the results are always questionable. I don’t know why people bother when there is a much better approach to the whole subject of trading.
This was brought to my mind while watching the highly-acclaimed documentary ‘Jiro Dreams of Sushi’, which many of you would have seen.
The film is entirely about sushi, but it has been years since I watched something that inspired me so much with my trading. It really got me fired up and I’ll share the reasons for that with you today.
Tomorrow I’ll actually explain how you can already put these points into practise and start taking a proven successful approach with your trading. But first, let me explain why you should forget about Ichimoku and start taking lessons on trading from Jiro and his sushi restaurant.
P.S. Just like Jiro dreaming of sushi, I also used to dream of trading every single night, much to the amusement of my friends. But that’s another story for another time.
Trading Lessons from Jiro
1. How long is long enough to go-live?
Jiro may be an extreme case, but the lesson is definitely valid for all of us. In his restaurant, new workers spend 10 years as an apprentice before they are finally able to ‘go live’ and serve sushi for customers. One apprentice even claimed he had made one type of sushi 200 times before Jiro finally tasted one that he approved of.
On reflection, this should be something we bear in mind for our own trading. When learning to trade, we are all so eager to get started immediately and end the learning process. In reality, we should take tips from Jiro – learn to do one thing perfectly, before moving onto the next thing. Once you do everything perfectly, you’re ready to go live.
2. When can you call yourself the finished product?
The film shows Jiro at 85 years old and having worked making sushi for 75 years. What age do you think he decided he was the finished product and had nothing left to learn? Never.
Jiro was still eagerly trying to find new ways to improve his recipes and learn more. He claims if he had a better sense of smell and taste he could have achieved even more. As if earning triple Michelin Star status was not already enough!
“You must dedicate your life to mastering this skill,” Ono says in the film. “This is the key to success."
This is absolutely the case for trading too. We should never get complacent and believe we have seen everything that needs to be seen. The markets are constantly changing and there are always new situations, techniques and methods to learn and take on board.
This doesn’t mean you have to reinvent the wheel every time you lose a trade, but absorb the new experience into your repertoire and grow as a trader. (If done correctly, you will be retired long before 85!)
3. “We don’t care about money”
This may come as an odd one, since trading is all about making money, but give this a chance. Jiro is only willing to buy the very best ingredients and doesn’t worry about the cost. His focus is on creating the best quality product he can possibly make.
He states “We don’t care about money” and this is especially true when you consider his restaurant can only host 10 people at any time.
This is a fantastic lesson for trading. Although our end goal is money, we shouldn’t be making it our focus. In fact, the best traders aren’t focused on making big amounts of money, they are focused on achieving a profit with as little relative risk as possible. When we try and shoot for the stars with our trading, we will inevitably fall short a lot of the time.
Instead, we should focus on trading the highest quality method we possibly can. We want to focus on not making mistakes, on not taking ridiculous risks (no matter how big the reward) and looking at the long term goals of our trading, rather than falling for the seductive short term profits.
4. How can you maintain such consistency and discipline?
Passion; pure and simple. If you have passion you will stay disciplined, enjoy continuously developing and create the best quality work imaginable. If you don’t enjoy trading the way you are at the moment, find a new way to trade that suits you more. If you still don’t enjoy it – find a different career.
If we enjoy our job, we will excel at it, but unfortunately the opposite is often true as well. Many people start trading for the money, but hate the line of work – they don’t last long in the industry.
As Jiro says “Once you decide on your occupation… you must immerse yourself in your work. You have to fall in love with your work. Never complain about your job. You must dedicate your life to mastering your skill. That’s the secret of success… and is the key to being regarded honorably.”
5. Preparation is the most important ingredient
This is my favourite lesson of them all, as it is so key to trading and is one aspect that separates the successes from the failures.
Jiro improved all his processes to make sure his sushi was better than any competitors; therefore increasing preparation time significantly to make sure everything was perfect.
As an extreme example, every day an apprentice has to massage an octopus for 45 minutes before it’s ready to prepare to serve. Other restaurants massage their octopus for a much shorter time, but Jiro knew the extra time would add a few extra levels of tenderness to the food.
The apprentices hate it, but the end product is what matters.
Jiro has the same routine every day and misses work when he has to take time off for holidays. The preparation is just as enjoyable as preparing the food – he has learnt to love the entire process and this passion is represented by the extraordinary lengths they go to in preparation of the food to ensure its quality.
In trading, many of us take the easy route to preparation and do the minimum possible. Maybe a quick check of the market news, a few trend lines drawn on the chart and we’re ready to trade. Others don’t even do any preparation before trading.
But let me tell you this – if you spend hours preparing before you trade, you will see the difference. This can be done at the weekend when the market is closed and then renewed daily before you start you trading day – check the news, look at significant levels, plan your charts, create analysis documents, have your work station set up etc. The difference in your trading will be noticeable immediately and you’ll be prepared for all situations.
“Always look ahead and above yourself. Always try to improve on yourself. Always strive to elevate your craft. That’s what he taught me.”
- Yoshikazu Ono (Jiro’s son).