Tuesday, March 30, 2010

Succeeding as Your Own Trading Coach: Guiding the Learning Process

"I never teach my pupils," Albert Einstein once remarked. "I only attempt to provide the conditions in which they can learn."

A great number of trading educators attempt to teach their pupils. What they don't necessarily provide are the conditions in which learning can occur.

At one firm that I visited a long time ago, traders were given very small amounts of money to trade and risk was managed very tightly. As soon as the trader lost a couple hundred dollars in a day, they had to stop trading for the day.

The traders were taught some setups and ways to look at markets.

But what they learned was that it was not OK to lose money. They never learned confidence, and they never learned to be aggressive when they were right in their views.

To my knowledge, none of the traders developed into ones that could sustain a living from their trading.

So what are the conditions in which traders can learn?

They have to be conditions in which it is OK to make mistakes, but important to learn from those. They have to be conditions in which traders can count on regular feedback to guide their efforts. They have to be conditions in which clear, attainable goals guide development and learning.

For the many traders that don't belong to trading firms, we have to establish our own learning conditions. That is a central challenge to self-coaching: we not only move forward as students, but as coaches of our own learning processes.