Knowledge vs. Creativity
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Knowledge vs. Creativity

Expert Trader Roy Frank talks about the knowledge of trading

by Roy R. Frank on February 25, 2013

A topic that I have heard people debate for quite some time now is whether it is more useful to have allot of knowledge with regard to a particular subject or if it is better to be able to be creative around it.  My thought process has applied this question to trading and other topics many times in the past and while there will likely never be a definitive answer due to differing points of view and opinions I believe that they can coexist and in fact in order to maximize ones potential they almost have to coexist.

Having allot of knowledge when it comes to a particular topic is very important.  Gaining knowledge from traditional methods such as on the job training, personal research or through learning in a school or classroom environment is essential in many instances.  Without basic knowledge of a particular topic it is very difficult to grasp the specific mindset that is required to understand it and trading of course is no different.   When you have studied charts, taken classes and done allot of personal research, at some point in the process you develop the trader’s mindset which is very important.  It is important to know the technical aspects of trading and really any topic because when it is applied in real life situations we begin to gain experience as well.  Experience adds greatly to one personal knowledge base because it can tell you when trouble is looming even when the technical aspects of what you are seeing do not indicate that and it can also lead you to an opportunity that may be present that people with little or no experience could not possibly see.  This is all very important and I believe that it is essential for success but is that really all that we need?

The ability to be creative around any topic will greatly enhance your ability to succeed and again trading is no different.  I have heard people state that watching charts live is allot like and about as exciting as watching paint dry and I occasionally will agree with this, however, I have also stated many times in the past that the more you look at the charts the more that you will see.  There is an infinite number of ways to trade and to be successful the only reason we do not apply different creative ways to our trading is simply because we have not thought of them yet.  When you study charts watching the tendencies of the price action adding and subtracting different technical indicators while also noting what happens when fundamental events occur you will begin to see various patterns unfold that actually become very obvious after you discover them.  After you discover new patterns and repetitive events in the price action of a chart you will note that the same old charts are being used with the same old indicators but when you play with them and change them they actually can become new and very vibrant.

Following in the path of knowledge and utilizing what has already been learned is very important but if we can use that knowledge as a catalyst or a basis to be creative and discover our own way of thinking and looking at trading there becomes as many ways to trade as we can think of.  Looking at charts and trading in a traditional way while using the traditional knowledge may be ok to an extent but it can cause a problem because that is what most traders will be doing.  If we can find a way to look at the charts and the indicators in a way that no one else looks at them we will be doing different things than they are at different times which not only sets us apart it will give an advantage over our competition which of course is every other trader in the world that trades in the market that we trade in. 

Being creative with no knowledge and having knowledge with no creativity will likely leave you running with the pack doing what everyone else does which is largely unsuccessful.  Being bold and willing to look at different ideas in different ways is what can set us apart running away from the pack in our own direction.  Many successful traders state that they are successful because they can find opportunities before anyone else recognizes them does not necessarily mean that they have more knowledge than anyone else nor does it mean that they are more creative.  What it may mean is they have found a way to marry the two drawing on the aspects of each that are needed in any given situation which puts them in the best possible position to succeed which often times is a much better position than most other traders. 

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Roy R. Frank

Roy R. Frank went to Wayne State University in Detroit Michigan where he was an Investment Finance major. Roy is our resident Stock expert and diligently works to help students realize their dreams of becoming profitable, independent traders in the equity markets. Connect with us on Google+

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