Modeling the attitudes and behaviors of winning athletes is a proven road to success in sports, but only up to a point. Due to large developmental differences between emerging athletes and professionals, modeling sometimes breaks down.
= = =
Read the first article in this series:
The Mindset of Top Traders: Part 1
= = =
Adults model skills for children, but children actually learn real-world skills better from interactions with peers. In peer learning, kids teach each other interactively. When one child discovers something new and effective, the others quickly catch on.
The collaborative exploration and learning process proceeds organically, but in very small steps. Children discover, learn and practice a series of basic skills that “scaffold” mastery of a more complex task over time. The same process occurs in the development of top traders.
Most traders, however, underestimate the difficult of trading and fail to understand that it requires collaborative interaction and a true developmental arc that is measured in years, not months, weeks or days.
VENUS OR MARS
What gets in the way? For many traders, the problem is testosterone.
Men, as a gender, have a tendency to under-estimate risks and over-estimate our abilities. If we don’t think a task is difficult, however, then we won’t properly engage in an interactive skill building process.
Indeed, trading seems rather simple at first. This is due to Hindsight Bias, which is the illusion that we could have known something about the future in the past. Hindsight Bias arises from looking at cold charts, because cold charts make it easy to see where we woulda, coulda, shoulda done this or that.
If we remove the hindsight blinders, however, it becomes obvious that trading well is a complex task and top traders go through a skill building process similar to childhood.
HOW WE LEARN
Studies show that children learn fastest in collaborative environments with peers. The trading environment, however, tends to be isolating, which retards learning. The most important skill for aspiring traders to develop, therefore, is not a secret about trading, per se. It’s about how you learn to trade. I believe increasing the level of peer support and collaboration will accelerate your progress toward trading mastery.
= = =
Join Dr. Reid each Wednesday for The Dr. Is In column. Leave your questions or comment below for him.
Another story by Dr. Reid:
