Some years ago while running my hedge fund, I went through a period of indecision. I would line up my decision rules for my entry signals and then at the moment of execution, would hesitate. I was struggling to make the simple decision of buy, sell or the default, do nothing. Too often the default prevailed, but out of indecision, not clear thinking.
To solve for this, I thought that doing some physical activity that brought with it some risk might help me overcome this hesitation. I could have chosen any number of activities, but I settled on sword training, having had a childhood dream of becoming a martial arts expert.
Over the next 10 years, I trained religiously in the Japanese martial art, Ninjutsu. Part of this training involved using sword. Fighting with sword, defending unarmed against sword attack. Defending unarmed against multiple sword attackers. Obviously practical skills for day-to-day use in today’s society.
While I’m yet to have to defend myself against sword attack in the real world, after a period, it did help me to be more decisive in life generally. Interestingly, in the first instance, it didn’t help me to be more decisive against sword attack in training. Fortunately, we generally trained with wooden swords (bokken). Early in my training I broke a finger after being whacked by my opponent. Or more specifically, mentally freezing when confronted with a threat that I was unpracticed at dealing with.
When facing a sword attack, even in training, I found my adrenals pumping, causing my vision to constrict and my limbs become almost frozen as blood charged to my vital organs and out of my body’s extremities.
The process of sword training involved multiple repetitions of routines, mostly executed slowly, so that we would build muscle memory in the event that we needed these skills under pressure and at speed. Over time, I did become more proficient at sword and defending against sword. This is not to say that I wouldn’t require a change of underwear if I confronted a sword attacker in the world today. But what I did learn was that in order to become more decisive in trading and investment, sword training didn’t help me as much as I would have hoped.
Building routines around the decisions we make in life, in business, in trading and investment is much more important. The same principles as those in sword training apply, just a different skill set. In trading and investment, if it’s hesitation you are experiencing on entry, do you have clear decision rules? Have you tested those rules and know their probabilities? Do you know what factors influence those probabilities? Slowing down and drawing out the nuance, then building and practising routines, will do more for your decisiveness than training with sword. Train like a swordsman, but at buying or selling, not at sword. Whilst I’m grateful for my 10 years training in Ninjutsu, I would have been a better hedge fund manager had I spent the same time practising and training within my trading process.