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.


Bryan said...

Hi Brett, I think your blog does exactly what Einstein suggested. You provide the conditions under which traders and investors can learn. Many thanks.

NQ Trader Jay said...

Good points. I happen to be just thinking that I am now a huge fan of sim trading, having been sim trading for days now.

I traded so many more times today with sim account than I could have with real money. I therefore, learned so much more because of more interaction with the market.

I was free to make loads of mistakes and don't we learn from our mistakes? I think involving real loss is a gigantic impediment to freeing up the mind to actually learn from a mistake that is also a financial loss rather than just a mistake that can be focused on for solely the behavior and not all of those other things that definitely get in the way of learning and thinking when you add the complexity of real loss.

Try learning well with adding to a mistake, grief, loss, guilt, sadness, adrenaline, fear, need, greed, etc.

I had a darn good time today. I even posted 12 times to blog.

Sim and sim for real, or play with it for a while also, but at some point, sim like you mean it.