NOTE: I will return from vacation on Friday and will begin regular posts here and to the Trading Psychology Weblog that same day.
As I researched a variety of fields for my new book and examined the ingredients of expert performance, one set of findings jumped out at me. Because highly accomplished performers undergo a lengthy training (formal or informal) through their immersive developmental process, they acquire unique perceptual skills. Years of painting, experimenting with different materials, and closely observing their subject matter enables artists to *see* the world in fresh ways. Similarly, the iterative trial and error process of experimentation allows scientists to perceive unique relationships in nature. Much of this enhancement of perception is a function of cognitive organization: expert performers learn to identify meaningful relationships and use these to organize and interpret what they see. This is how an expert physician, for example, can rapidly diagnose and triage patients in a busy emergency room. It is also how a hockey player learns to skate where the puck will be, not just where it currently is.
It is difficult to appreciate that expert performers do not see the world as do others. Chess grandmasters see a different chessboard than novices; a baseball hitter sees the release of a 95 mph fastball differently than a fan. Experts see the world in terms of meaningful relationships--and because they have acquired a huge library of such relationships after years of observation and practice--they develop elaborate mental maps for guiding their actions.
This has immense relevance for trading, where expert traders see markets differently from beginners. An expert trader might look at a depth of market (DOM) display and notice that, at a prior support level, large traders are pulling bids when they're being hit, but that they are not doing the same with their offers. That allows the expert to sell the market while the rookie is staring at a chart, counting on support.
Similarly, an expert trader observes what is happening in gold, other metals, emerging equity markets, currencies, and interest rates and sees a transition from an expansionary, inflationary market to one that is counting on contraction and a tightening of monetary conditions. The rookie simply sees falling markets and oversold levels on a short-term oscillator.
The expert, in general, develops a richer, more complex, more meaning-laden map of the world than the novice.
Because of that, the expert also lives in a subjective world that is more filled with meaning. A gourmet meal means much more to a connoisseur than to the average person; an accomplished artist sees more in a sunset than the average Joe.
In enhancing ourselves, we enhance our enjoyment of life and make the most of our experience while we're here. The development of expertise is not simply about becoming a great trader, athlete, leader, or artist. It is about cultivating the richest experience of life possible to each of us.