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A Trader’s Education: The Right System at The Right Time

elite trader market lessons story 31.8.2020

Pyrros Dimas is a legendary figure in Olympic Weightlifting.  A frequent favourite among weightlifting fans, the Greek lifter is known for his showmanship, physique and dominance on the lifting platform at a time when the competition was razor sharp and unforgiving. As a multiple gold World and Olympic champion, he would prove inspirational to both professional and amateur lifters alike, myself included among the latter.

A more recent documentary, produced by The Two Doctors, provides a wonderful overview of Dimas’ life and evolution as a lifter. While I previously devoured this documentary when I had been training for weightlifting, I recently rediscovered it again during a period in my own trading path when it was not moving in the right direction.

One central concept had struck me during the entire documentary – as Dimas’ puts it he had found ‘the right system at the right time’ which propelled him to his first Olympic Gold medal.

What was the right system, why was it the right time and how is any of this related to trading?

Consider the development path of Dimas in his own weightlifting career. All barbell sports attempt to address the issue of periodization – how to best train the body over a period of time to make it capable of lifting a specific amount of weight of a lift on competition day.

With Olympic Weightlifting much of successful periodization was dominated by the Russian or Soviet approach since the 1950s until somewhat recently. This approach was slow and gradual that featured many exercises as variations of the competition lifts. Training frequency, volume of work and the weight on the bar would be extremely modular, finely tuned and very dependent on what kind of weightlifter you are training. New weightlifters (often children) would often combine different sports and occasional light weightlifting with heavy emphasis on technique development. This would then dramatically change overtime in the 6-10 year development cycle of a weightlifter’s career until he would be competitive enough for the world championships.

This generically termed and wide ranging ‘Russian’ system of periodization was the gold standard of training until the 1980s when a new system rose to prominence – the ‘Bulgarian’ system. This new system was a complete paradigm shift in both training and results, enabling lifters to lift bigger weights at lower weight classes than ever thought possible.  This system was the complete opposite to the Russian one. Training was year-round and took place 2-3 times a day. It featured only a maximum of 5 exercises that eventually were cut to 3. There were no planned attempts and modulated volume of work or weight on the bar. The sole objective was to lift the maximum weight you can for a single repetition of these 5 exercises, two of which were the exact competition lifts (snatch & clean and jerk). If you lifted your maximum weight you would attempt more no matter how long it took.

Due to the complete contrast in training philosophy and the issue of the outsider looking in, many new weightlifters, often self-taught, assume these two training systems are mutually exclusive and one can never cross over to the other. During the time I was training for weightlifting myself, I often saw a trend for new weightlifters to directly jump into the Bulgarian system while they were still very raw. They had bad technique, their bodies have not had any time to adapt to the sport itself both in long term stress and short-term adaptations. They did not understand the individual and somewhat unique ways their body responds to training stimulus.  

Why was this the case? Firstly, there is an allure to the Bulgarian system as a quick, dramatic, and flashy way to train and progress. Secondly, the time investment to successfully learn how to apply the long-term development cycle of the Russian system was not palatable. In effect, the classic immediate gratification, desire for quick success, quick results mentality had struck again.

More innocently, these new lifters would observe how the top lifters are training right now and attempt to mimic them completely. They assumed that this is how they always trained, that they got to the top level by doing the same thing as they always did. There was no realisation or consideration that these top lifters in fact may have trained completely different when they started, and their training evolved overtime.

Dimas himself mentions this in the documentary that without his “previous base” he would have been “injured in the system” and wouldn’t be able to “stand up to that stress”. This ‘previous base’ was the Russian periodization system which he trained under for most his life until he started to compete for Greece. Once training started with the Greek team the “Bulgarian approach was what worked for [him]…. made [him] a champion” yet he had the “benefit of years of repetition as a base underneath [his] belt”. Even a lifter of his experience and caliber it took him “almost four years from 1991 to 1995 only then did [he] feel the program worked well for [him] and that it was the right one”.

Dimas’ evolution mirrored the experience of other great lifters since the 1990s, in that “if we compare the two programs one being Russian… first it’s good until a specific age, this is a good way to build up an athlete but to be in the highest level I think the second program, the Bulgarian method was much better… I had the right system at the right time”. If one were to research the training evolution of many successful international lifters since the 1980s, they would find the same trend. Firstly, these lifters had built and adapted their bodies through years of workload, repetition, and technique refinement under a Russian based approach. Only once could shoot for the “highest level” their training dramatically evolved into a Bulgarian like system as their entire training and career had culminated to a point where these lifters could thrive under this system.

How about trading?

As mentioned earlier, the concept of the ‘right system at the right time’ had proved to be the final connecting idea that provided clarity on an issue I had been wrestling with year long with my own trading.

I had failed to see the mistake I made with trading which in fact I originally managed to avoid while training for weightlifting earlier in life. Previously I had understood the long development cycle a weightlifter undertakes, that top lifters trained differently when they had first started compared to now. There was obvious futility in trying to emulate their style and training, simply because they were in a different place in their career and therefore had different career goals. They possessed better skills, experience, and capabilities in competition than I had under my belt at the time. Instead I had invested much more time in developing a wider base, better technique with the aim of achieving comfortable, consistent lifting while avoiding predictable injuries compared to others who tried to short-circuit this process.

Yet with trading I had walked headfirst in trying to also emulate senior traders in the wrong way. Certainly, their advice, experience and knowledge are invaluable to one’s own trading development. At the same time, I had ignored the fact that they were in a different place in their trading career and had different career goals. A senior trader with a large trading account could withstand large swings since even a proportionally ‘small’ withdrawal from their account would still be larger than a junior trader’s best career month’s profit by a substantial magnitude.

Due to these different career goals, they could realistically take on specific trades, risk management styles and execution that is not only survivable but likely to take them to the “highest level”. This is what the Bulgarian system would be to Dimas at “the right time”.  

Yet, take a junior trader who is still raw and developing with a small account. Fundamentally he should recognise his career goals are fundamentally different to that of a senior trader – account building or rebuilding takes priority. Therefore, the specific trades, risk management style and execution must be centered around consistency in building frequent positive, profitable days while sacrificing strategies and styles that cause too much of a swing in profit and losses. To compare, these traders need the “benefit of years of repetition”, the consistency in their approach to “build an athlete” as Dimas and other legendary lifters had developed under a Russian approach to their young careers.

As such, I had been going down the wrong path in my personal trading journey as I had been trying emulate these senior traders in the same way I had seen new lifters naively start their weightlifting journey with the Bulgarian system. All the while I was suffering from the perspective of an outsider looking in. A perspective where inexperienced eyes often draw the wrong conclusions more of than not. My risk management system emulated that of a trader with a large account, my thinking and mentality emulated that of a trader with triple the experience that I had. My depth of understanding in certain trades or plays was superficial compared to the amount of capital I was committing to them.

I was trading with the wrong system at the wrong time – the wrong mentality, risk management and expectations at this point in my career. Innocently, too I had had a convoluted outlook on my own growth and change as a trader. The same way novice lifters would assume world level lifters have always trained the same way as they do now – I too had assumed all the senior traders are trading now like they had done at the start of their career, and that specific method, trade or market is what got them profitable. Naively then, I assumed I could short-circuit progress this way by also trying to emulate their specific method, trade, or market since they too also traded the exact same way as junior traders.

‘Wrong’ is a blunt word to describe issues, especially in a non-linear complex world like trading. Yet, by naive implication – if there is a ‘wrong’ then there is a right answer. To encapsulate this article, there is no blanket right answer but there is a personal right answer depending if it is the ‘right time’. To those at a similar stage of the trading path as myself: Consider your current career goals, where are you within your career, your account size, your necessary withdrawal rates. From there derive your objectives for appropriate risk management. What risks do you take and not take? How do you mange up and down days? Do you prioritise outright consistency at the potential cost of missing a big but low probability move?  I had answered these questions myself and found my own personal right answers since I had clarity that I am fitting them with the context of the ‘right time’, and from this clarity I have found progress.

Good trading to you all,

Bogdan

Axia Futures
4 Endsleigh Street London GB WC1H 0DS
+44 20 3880 8500
https://axiafutures.com/

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