Home > Creativity, management, Markets > Traders roundtable: the three phases of new system innovation

Traders roundtable: the three phases of new system innovation


At a recent traders roundtable discussion, we started to review the procedures and practices that each of us followed for coming up with new ideas to trade the market. While each trader have their own specific routines and follow, there were some aspects of their practice that were in common with each other. Here are the three phases that each trader went through in one form or another when developing new systems ideas:

Phase 1: Saturation. in this phase the trader is hungry for knowledge and reads everything he can get his hands on. Searching YouTube for different trading ideas is now feasible and reasonable as people will give you their best ideas online in a way that is very accessible and time efficient. In this phase you’re trying to cram your mindful of facts, ideas, concepts, themes without regard for trying to make sense of it yet. Think of it as filling your hard drive with data.

Phase 2: Incubation. In this phase, the trader allows the subconscious mind to stew on facts and assumptions below the level of consciousness. You can think of this as churning butter or slow cooking a stew. It’s not unusual to have trouble sleeping or to feel distracted from day to day events in this phase, because you can sense something is happening at a deep level that you can’t put a name to get. It is often helpful to distract the conscious mind with strenuous physical activity or listen to classical music, especially Baroque music like Bach which seems to have a generative effect.this phase continues until your moment of breakthrough.

Phase 3: Illumination: this phase begins with the shock of an “A Ha!” moment. the nervous energy released by the shock of recognition of a new insight can be almost overwhelming. I can remember times having to pull my car over on the highway in order to let the new thought fully develop. the energy will run its course while you visualize and or here are the first full manifestation of the idea and its implications. It’s a good idea to have pencil and paper with you at all times or a digital voice recorder so that you can capture the full stream of consciousness insights while it is still fresh.

I strongly recommend that at least once a month you set aside some time to go through these three steps and make them part of your trading research ritual.

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