Tuesday, February 14, 2017

How Trading Success Happens

When I first began working with traders, my central insight was that trading is a performance activity.  What makes for trading success is not so different from what makes for success in other performance fields, whether they be performing arts, athletics, chess, or surgery.  In each of these fields, the star performer begins with certain inborn talents and then refines those through a process of training, mentoring, and coaching.  Training and mentoring build knowledge and skills and accelerate the learning process.  Coaching provides guidance and helps performers channel their talents and skills to where they can be most successfully applied.  Long before elite performers acquire fame or fortune, they spend long hours in becoming.  Their focus is on improvement, the refinement of skills, and the development of new ones--not on the the trappings of success.

There are few, far too few, places where developing traders can benefit from the thoughtful integration of training, mentoring, and coaching.  It's one reason I've been such a fan of the building of teams within trading firms.  Those teams enable senior traders to benefit from the work of junior traders, and they provide hands-on learning, mentoring, and coaching for those juniors.  The learning takes place on the desk, just as an athlete's learning takes place on the field--in practice and during games.

No one expects an athlete to develop by reading books, taking classes, or practicing on their own.  No one develops as a performing artist by writing in journals and trying out different songs or plays.  In performance fields, aspiring performers learn from experienced performers and those knowledgeable about the performance domain.  Medical students are trained at the bedside by practicing physicians; chess players hone their talents in academies run by chess masters and grandmasters.

If I were looking to become successful in the trading world, I would learn some skills and/or develop some area of expertise that would make me valuable to a trading team or firm.  I would then contribute my skills to that team and learn everything they're doing that makes them successful.  Over time, I would integrate my abilities and experience with what I've learned to develop my own path to success--and then I would cement that learning/development by serving as a mentor for a new generation of juniors who could in turn make me better.

I've worked with many individuals, many trading teams, and many trading firms.  That is how success happens.

Further Reading:  The Foundation of Trading Success