Sunday, February 19, 2017

Trader Education: The Process of Becoming a Great Trader

Thanks to a savvy trader for passing along this enlightening news account of how coach Gregg Popovich is helping mentor his young talent through the use of game film.  Interestingly, the assignment is not to watch games but to watch specific performers who have the skills that the young players need to develop.  By watching the greats in action, the rising stars absorb their example, integrating what they do into who they are as players.

This observational learning occurs in many performance arenas.  Chess students study the games of the grandmasters and learn from each move made.  In medical school, students undergo a clinical education that teaches them how to care for patients.  The motto is "see one, do one, teach one."  First you observe experienced physicians in practice, then you do what they do with close supervision, and then you teach more junior professionals, thereby cementing your own learning.

No one pretends that you could become a chess grandmaster or a successful physician by simply sitting in a classroom or by randomly trying things out and hoping to hit upon success.  Professional development is a function of internalizing the performance of experienced masters.  We become what we repeatedly observe and study.

The power of observational learning helps explain why so many of the most successful traders have developed under mentors, often as part of teams.  The Tiger cubs trained by Julian Robertson are an excellent example of observational learning in practice.  When world class talents mentor promising students, the result is further world class talent.

As Bella at SMB observes, successful teams not only teach skills but also actively nurture talent with support and caring.  This is essential during rigorous and challenging training conditions.  It is a major reason why elite military groups, such as the SEALs, conduct their training and operation in teams.  Teams take responsibility for their members.  Many obstacles are overcome, not just through individual effort and determination, but through team spirit and dedication.

Do you want to know some of the best ways of distinguishing real trader education from the fake kind?  Look for teams, look for videotape, and look for the Gregg Popovich approach to mentoring, where you spend considerable time seeing one before doing one.  And do you want to see what makes for a future trading star?  It's the willingness of a Dejounte Murray to sit on the bench, wait his turn, and use that time to observe, observe, observe the greats and integrate that learning into his game.  

Trader education has just scratched the surface of the potential of observational learning.  

A thought experiment:  What if you recorded your trading and regularly reviewed your best trades?  What if you were in a classroom of developing traders and everyone regularly reviewed each other's best trades?

Perhaps so few traders succeed because most are so busy trading that they never sit on the sidelines and absorb the lessons from successful traders.

Further Reading:  Four Pillars of Trading Process