The trading floor is fiery, noisy, caffeine-fuelled collective of power dynamics, truth-seeking and decision making.
Essentialism, as described by Greg McKeown, is embodied by a fundamental concept of doing less but better. Switching out “I have to” in favour of “I choose to”.
I couldn’t think of an idea further from reality as a trader but boy is it needed.
A Millimetre In A Million Directions
Trading commonly dictates a wide coverage of tasks ranging from quoting prices to reading research, news and economic reports…and then in my case to booking trades, to checking for obscure IT risk run errors, to listening to broker prices, to watching broker screens, to shouting at brokers, to monitoring 30 odd Bloomberg chats, to scripting, to adding yet more email addresses to the auto-bin rule, to chasing IT bugs, to answering calls keeping up with running list of IT projects all labelled *urgent*, and specifically being able to jump between the above at any time, in any order, every day.
Hardly deep work by Cal Newport’s definition. Of course, this is my own experience but it is clear that in the most important hours of the day, when markets are open, work is most shallow. No wonder the bottom line as a trader only really improved after reflection, analysis and coding work completed after 7pm or on the weekends. Given 12 hours of chopping trees, does it really make sense to spend 11 chopping followed by 1-hour sharpening?
Furthermore, withdrawing from peripheral markets (deemed ‘non-core’ businesses) was and still is the shareholder’s number one method of improving trading efficiency as a business unit. You don’t need to look hard to see this in action with recent firing rounds at Deutsche (here) and Citi (here). The irony is that shareholder drive for minimalism from the top pushes traders away from minimalism at the bottom. Is that really what you want for a key revenue generating business function? It’s not lean, it’s anorexic.
Exercising ‘Choice’ Options
Thinking about it now, I can’t quite believe that I was dialling in to a call to prioritise other calls about IT dev work that was raised x years ago. Somehow, I developed a heightened awareness of everything else around me except choice.
Choice is at the core of essentialism, McKeown writes.
Failing to exercise an in the money option is a cardinal sin for any option holder yet I was doing just that with my own time. If time is the commodity, choice is the option — the right but not the obligation to freedom of your own time — and you are ALWAYS in the money.
“Ah, just write up a piece of commentary for me please?”
“I’ve booked the trade — can you check the risk?”
“Can you join this weekly IT call for me?”
Each yes is a failure to exercise. No, however, delivers precious minutes, hours, days spent on work meaningful to you.
So in response — No, no and nope!
The Vital Few From The Trivial Many
I’m not saying it is easy to say no. I’m not even saying it is easy to notice you’re not saying no.
Social and political pressures combined with my own natural tendency to do more and perhaps a little bit of good old British conservatism had actually made it pretty damn difficult for me. If I routinely turn up late for events, meetings, trains — retracing the steps leading up to this is usually an indicator to excess in my routine.
Extending the idea of meaningful work, choice should be evaluated against your own metric.
What is your metric?
Evaluated solely against daily absolute PnL, my own trading floor list earlier in the post boils down to
a) Reading (research/broker screens/news/economic reports).
b) Developing scripts/analysis.
Only one of which is a priority depending on 3 stages of the trading day. Each task is solely in my hands directly affects my trading decisions so improvement in these tasks is directly proportional to my PnL (…in theory).
There exists a secondary list of important tasks that should be addressed but since they are never a priority at any point during the day they should be addressed by another team or, even better, automated. Note use of ‘should’ — I haven’t quite figured out the optimal way to complete tasks in this list.
If you’re trying to minimise the time you spend on things that aren’t necessary then Essentialism by Greg McKeown is worth a read. In a world where it’s increasingly about more, the key to achievement might actually be less.