Monday, December 14, 2009

Learning to Trade: The Role of Technology

I see where Bella at SMB Trading has posted his thoughts on what makes for a world class training program for traders. He raises excellent points, particularly about the role of technology in training:

"When I first began in the late 90’s you learned through osmosis. You sat next to an experienced trader and asked them them questions when they had some free time (if they had some free time?). Technology allows us to train much better. Today we can show you exactly why and where we are buying and selling. We can drill you on specific trading skills. We can watch hours of video to accelerate your learning curve. Sitting next to a trader and ONLY learning through discussion is an outdated training model. We can do so much better."

This very much fits with the performance research that I reviewed when I wrote my second book: expertise is the result of a developmental process that begins with observing skill performance, follows with practice and the drilling of skills, and continues with feedback and corrective efforts. The simulation platform is ideal for this learning-by-drilling, as it can focus developing traders on recognizing and trading specific patterns and, through replay, enable them to see exactly what they did right and wrong.

Many trading firms have excellent technology: fast servers, robust trading platforms, and decision support tools for traders. But do those firms also invest in learning technology: infrastructure dedicated to assist traders with their learning curves? This is one area where the rubber hits the road for world-class training programs: they don't just teach didactically, but create a controlled learning environment in which skills can be drilled with rapid feedback and the opportunity to improve performance over time.

Olympic athletes don't train at any gym or track; training camps for the world's best professional teams can't be held anywhere. World class training requires world class equipment and coaching. There's a reason why professional tennis players go to Nick Bollettieri; why jiu-jitsu students study with the Gracies. If you want to develop performance expertise, you need to seek out programs that have developed instructional expertise.