My numbers come from people employed in prop shops. Not from an internet search. I know a lot of prop traders. People that are where most on this forum aspire to be. I also know one or two failed prop traders who despite the advice of many around them are completely the cause of their own failure.
Half the skill is having a big set of balls. I know a guy that runs an open outcry USD/THB forex desk, he sounds like a cockney barrow boy. Sounds to me like he should be selling oranges on a market stall. He has banks on the squawk all day and he's the intermediary playing them off against each other - making them think no-one is interested when they are or generating interest when it doesn't exist. That's trading.
Many traders think that their existing knowledge will give them an edge in trading. Computer programmers usually start off trying to automate trading. I reckon the guy selling oranges on a market stall probably has a greater chance of success because his skills are more relevant and he has less impediments/
You have knowledge in the subject of high performance. Have you considered this may be an impediment to your success as a trader? Same for anyone else reading this that is trying to bring their non-trading skill to trading? Have you considered it might be holding you back?
Now - I can't say it is & I can't say it isn't BUT lots of people spend years applying their non-trading knowledge to trading without a way to see if it is actually helping or not.
Food for thought anyway.
If you have any questions about the products or services provided, please send me a Private Message or use the futures.io "Ask Me Anything" thread
Last edited by DionysusToast; March 10th, 2013 at 06:03 AM.
The following 3 users say Thank You to DionysusToast for this post:
I have an Indian friend that believes the above and I believe it is not true. To him it is glaringly obvious that this is true and to me it is glaringly obvious that it is false. We tend not to talk about it too much nowadays...
It is something that remains unproven either way.
One of the interesting things is that we as humans are sort of "Politically Corrected" into admitting that physical attributes can effect performance but mental attributes can't.
Basketball players for instance are usually tall. No matter how much practice you put in, you can't really make up for being a 2 foot tall dwarf.
On the other hand, when we get outside of the realm of the physical, we are rather reluctant to discuss non-physical attributes that can effect performance. For example if you started a discussion about race and sporting ability most people would agree that certain races have attributes that appear to lend them to being good at certain sports. If you started a discussion about race and intellectual capacity, you would probably get a poke in the eye. Physical attributes impacting performance - that's OK - other stuff - verboten. Black/brown/yellow/white/male/female - all that sort of stuff is not allowed and the moment you make up a category someone gets offended by it.
I personally think someone with ADHD would suck at trading. The most successful trader I know is bipolar. I don't discussions on these points would last very long.
A big part of American culture is it's 'dream' that anyone can make it. If you look at most self-help books, they say the same thing. It is an appealing notion but I don't subscribe to it. I think there are some things that you will suck at. I have a long list of mine. I think the people that are doing this sort research are looking specifically to back up a rosy view of mankind and for various reasons they find the proof they are looking for.
Science has a long and illustrious history of people finding what they want to find and proving what they want to prove unfortunately.
We all have our limits and there's some stuff we just won't be very good at in my opinion. 10,000 hours or not.
If you have any questions about the products or services provided, please send me a Private Message or use the futures.io "Ask Me Anything" thread
Last edited by DionysusToast; March 10th, 2013 at 10:28 AM.
The following 2 users say Thank You to DionysusToast for this post:
I think that you are actually inadvertently reinforcing the theory of deliberate practice that maggtrading discussed. Thanks to personal experience and my own reading, I too believe that many people confuse the effects of deliberate practice with on 'God-given advantages. '
For example, one popular stereotype is that Indians/Asians are innately smarter than Americans. However, if we delve into American culture vs Asian culture, we can see that they have completely different educational programs and cultural expectations that result in above average results compared to the average American. It is not that they are intrinsically smarter, but they were brought up in culture with a stronger emphasis on academic success. The unwavering requirement of excellence leads to deliberate practice which results in higher test scores
Another stereotype that you mentioned was that certain races are predisposed to be better at sports. But what you are writing off as an 'automatic advantage' based on race is nothing more than the effects of deliberate practice due to cultural differences... A child who has internet, plays three sports at school and also comes from an middle/upper class environment will no doubt struggle with staying focused for deliberate practice in basketball. However, the child doesn't have internet/cable, can't afford the luxuries in life, the child who goes to the basketball court because he shares a one bedroom apartment with his mother and two sisters is more inclined to undergo deliberate practice because basketball is a form of escape and can pave a way to a better life. Here in Chicago, I know of children that play 12 hours of basketball per day in the summer, so they are likely to reach 10,000 hours much quicker and receive coaching/training at an early age to turn good skills into great skills
The reason why people do research is so they can irrefutable proof instead of vaguely discrediting everything like you appear to be doing. You believe that there are certain traits that successful traders have that cannot be taught... would you venture to name a few? I am guessing not because they have to be intangible for you to keep that belief... because for every trait that you named, I could probably look in any copy of Market Wizards and proof the theory wrong. It isn't based on intelligence alone (LTCM proved this and there are plenty of successful traders without college degrees), it isn't based on race because there are traders in every country that are successfully making money, it isn't based on gender because Linda Raschke has made more money than the majority of this board. So if gender and race, the only two things imo that we cannot change (without expensive surgery at least) do not determine potential success as a trader, what other 'innate' ability are we overlooking as a whole?
I think a problem with your current perception is that you appear to be muddling probability with possibility. It is impossible for everyone to be profitable trading, but it is only improbable for any particular individual to be profitable trading. Anyone can be successful, it is just that statistically speaking, the odds are against them. The predeterminist view that ability is innate allows people to subconsciously accept their shortcomings as being out of their control, but it is not an accurate portrayal of reality.
Last edited by Bermudan Option; March 10th, 2013 at 04:58 PM.
The following 4 users say Thank You to Bermudan Option for this post:
one, anyone can get better at anything. schwartz has a line for that, anything you want to get better at, you work it like you work a muscle: push past your comfort zone, then rest.
there's research that proves even intangible stuff that people consider innate talents like creativity or empathy can be significantly improved, never mind more mundane stuff like arithmetic, body building, playing tennis, learning languages, etc.
two, it's one thing to improve at something, it's something entirely different to become world-class.
i did mention there are certain parameters or limitations. and anyone who bothers superficially checking out the works of high performance would find out that the authors readily get that objections out of the way. height for example is indeed pretty much a given, but, it is not determinant, not every seven footer makes it to the nba, and not every nba player ever has been seven feet or taller. that's obvious. as it is also obvious swimming prizes other physical traits like long limbs, a big wingspan and large lung capacity. there's people that say those traits give michael phelps an edge over ryan lochte, but it's not those traits that put michael phelps in the level of performance he is at, it's that he has devoted his life to competitive swimming.
actually, the biggest proven limitation is the age at which you start something. our capacity for learning decreases with age, both the brain and the body lose flexibility which is the turnkey to learning. any world-class performer you can think of started out at their discipline very young. tiger woods started golfing at 3, phelps started swimming at 7, music virtuosos like yo yo ma and anyone else you care to mention walked the same road.
human babies are pretty much a blank slate. there is enough potential in them to accomplish anything that they are properly taught to achieve. taking a 2 year old baby of any race or gender, i am confident they can be taught anything and be taken to any level in the proper setup. and there's research to prove that. now, once we get older, our possibilities are more and more defined by a lot of factors and thus our potential is limited. as Bermudan Option points out, environment plays a huge role, as much as our own intrinsic motivation.
now, back to the matter of 10,000 hours and trading. can anyone significantly improve their trading? absolutely. can anyone improve enough to become consistently profitable? i don't know. trading profitably puts you in the top 10 or maybe 5% of the profession, that sounds like being world-class level to me. what i do know that if they are driven and determined enough, any particular individual can become profitable at trading. but it would take an awful lot, and different people with different problems would need to get according solutions. replacing a system that doesn't work, getting useful coaching, developing the required discipline and focus, taking care of the emotional or psychological issues that keep you losing, learning a lot and unlearning all what is necessary. it all can be done, but a lot of people don't want to change or don't want to work as hard as it is required.
Last edited by maggtrading; March 10th, 2013 at 08:02 PM.
The following 2 users say Thank You to maggtrading for this post:
Someone I heard within the last few months related something like the following in an online presentation. He was a well-known psychologist, and he kept getting traders coming to him looking for help improving. He told a colleague, "at what point do I stop taking their money and tell them that they're just not willing to work hard enough?"
Having a methodology and approach to trading that allows you to profit is #1, IMO, but I think it takes "hard work" to figure out markets well enough to do this. I think a lot of people run around the "find the easy way" track 20 times, when they could have run down the "realize it's not easy and find what works" path once and been much further ahead. "What works" may vary from person to person, but there are too many shortcuts that people get caught up in that simply don't work.
What a prop trader has as an advantage (what DT has been talking about) is that they have focus, guidance, and an environment conducive to progress. But that does not make them experts or professionals. Any trader who is actually a professional would probably laugh at a "trader" who has been trading less than a year who called himself a professional. One year does not even allow a trader to see seasonal patterns, or a wide variety of market conditions more than once or twice. I think it takes actual experience. They key is, what do you do with that experience? If it's looking for the next shortcut, it's not really experience adding to a cumulative knowledge, it's just experience being stupid and lazy. If you have been trading for more than a year or two and are still regularly asking "can you share the settings" or "can you share the code for this indicator," etc., then it probably means you're on the treadmill. Not necessarily, but it might be something to look at.
The following 2 users say Thank You to josh for this post:
The myth of talent is actually quite well established. Your example of basketball players actually reinforces this view rather than disproves it. Certainly you need to be tall to be competitive in the NBA but height alone has very little to do with a player's ability except in cases where it is skewed (someone is 7'4" e.g.). The best players are certainly not the tallest or even the most physically talented players. The best players are the ones who work the hardest, get the best training, develop the right attitudes, etc, etc - all the things Ericsson talks about. This is actually true across all professional sports.
The same is true for academic success - the smartest guys/gals are not the most successful or most respected. In fact any statistical analysis of IQ and success shows that they do not correlate beyond average intelligence. What does lead to success? The behaviors the Ericsson describes. This shows up again and again - read the talect code, talent is overrated, Bounce, or even gladwell's book.
Trading is no different...
Seek freedom and become captive of your desires. Seek discipline and find your liberty. - Frank Herbert
The following 2 users say Thank You to Surly for this post:
I think it actually comes down to how focused and productive those hours are.
If one works diligently and industriously from the onset with a guiding hand then it should certainly cut that 10,000 hours down.
There obviously is a HUGE skew in this data though because the real initial task should be clearly defining ones particular aptitudes as a trader.
Some guys would make tremendous pit traders due to that environment suiting their particular abilities. Whereas there are others who may have a much better aptitude writing code for quant trading.
In the end the 10K hour to mastery estimation probably ends up being correct more than not, much of it due to non-productive time being spent and constant changing of the modalities and structures involved.
i know Ive certainly put in 10,000+ hours, tremendous sacrifice, and hardships to finally make a consistent living as a trader.
The following 2 users say Thank You to FXwulf for this post: