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10,000 hours, really?
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10,000 hours, really?

  #11 (permalink)
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DionysusToast View Post
Prop shops give traders 12 weeks of training & then let them work SIM till they get good enough to be let loose on 1 or 2 lots. Some people are there on week 12 and some never get there.

3 months, not 5 years.

There wouldn't be ANY professional traders anywhere if it took 5 years of full time commitment to get profitable.

Think about it people, how would a firm be able to survive if if they had to pay people for 5 years before they got a return? How would prop traders on a stipend of $750 a month survive for 5 years on that pittance before they made enough money to buy a few new shirts, or eat.

What is it that occurs at hour 10,000 that is so special? Why not 5403 or 1726 or 8983?

It's just a myth perpetuated on teh interweb in my opinion.

The 10'000 hour rule was not originally generated for trading, Malcolm Gladwell author of outliers deals about it based on science experiments. You can google and find lots of stuff about it.



Outliers: The Story of Success is a non-fiction book written by Malcolm Gladwell and published by Little, Brown and Company on November 18, 2008. In Outliers, Gladwell examines the factors that contribute to high levels of success. To support his thesis, he examines the causes of why the majority of Canadian ice hockey players are born in the first few months of the calendar year, how Microsoft co-founder Bill Gates achieved his extreme wealth, how The Beatles became one of the most successful musical acts in human history, how Joseph Flom built Skadden, Arps, Slate, Meagher & Flom into one of the most successful law firms in the world, how cultural differences play a large part in perceived intelligence and rational decision making, and how two people with exceptional intelligence, Christopher Langan and J. Robert Oppenheimer, end up with such vastly different fortunes. Throughout the publication, Gladwell repeatedly mentions the "10,000-Hour Rule", claiming that the key to success in any field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours.
The publication debuted at number one on the bestseller lists for The New York Times and The Globe and Mail, holding the position on the former for eleven consecutive weeks. Generally well-received by critics, Outliers was considered more personal than Gladwell's other works, and some reviews commented on how much Outliers felt like an autobiography. Reviews praised the connection that Gladwell draws between his own background and the rest of the publication to conclude the book. Reviewers also appreciated the questions posed by Outliers, finding it important to determine how much individual potential is ignored by society. However, the lessons learned were considered anticlimactic and dispiriting. The writing style, deemed easy to understand, was criticized for oversimplifying complex sociological phenomena.

courtesy http://en.wikipedia.org/wiki/Outliers_(book)

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  #12 (permalink)
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DionysusToast View Post
Prop shops give traders 12 weeks of training & then let them work SIM till they get good enough to be let loose on 1 or 2 lots. Some people are there on week 12 and some never get there.

3 months, not 5 years.

There wouldn't be ANY professional traders anywhere if it took 5 years of full time commitment to get profitable.

These people are not blank slates when they walk in the door though, are they? Even if they have zero experience trading, they do have life experience. Are they risk takers or risk averse? Are they leaders or followers? Do they have a grasp for the technical understanding needed in the markets?

Perhaps those people who are hired after 12 weeks have already spent a considerable amount of time on the "10,000 hour" path?

How many of the 10,000 hours needs to be spent specifically clicking 'buy' and 'sell' on the DOM? What about the life experiences or personality traits that you've developed I mentioned, how much time should be weighted or factored in for that in terms of prior experience?

Mike

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  #13 (permalink)
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Big Mike View Post
And what about the traders whose charts are constantly changing? I mean different specialty bar types, different indicators, and thus different setups?

Is the 10,000 hours cumulative across all these differences? Or does one need 10,000 hours on a vastly similar approach to be an expert in that approach?

How different is trading one "chart template" with one bar type, and one set of indicators compared with a different "chart template" of a completely different bar type and indicators?

What about varying methodologies such as trading divergences vs breakouts, or trading extremes countertrend vs trend following and trend continuation? Do you need 10,000 hours of each?

Mike

In light of what @DionysusToast and @Trendisyourfriend say I would agree that's where the 10,000 hours comes from (starting from scratch, wheel reinvention). From the perspective of a prop shop, which likely does basic pre-screening of candidates and can place relatively strict controls on every aspect of trading, I would agree they care not what happens to the ones who wash out in the time allotted. This doesn't mean the washouts don't contribute to the statistic (don't eventually become traders)--just that they don't fit the prop shop model.

Al Brooks comes to mind

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bnichols View Post
In light of what @DionysusToast and @Trendisyourfriend say I would agree that's where the 10,000 hours comes from (starting from scratch, wheel reinvention). From the perspective of a prop shop, which likely does basic pre-screening of candidates and can place relatively strict controls on every aspect of trading, I would also guess they care not what happens to the ones who wash out in the time allotted. This doesn't mean the washouts don't eventually become traders--just that they don't fit the prop shop model.

Al Brooks comes to mind

Don't really see where Al Brooks fits in but, if it is a good prop shop they are going to care if you make it or not because they spent a lot of time and resources recruiting and training you to be successful. A basic pre-screening does not really cover it some of these places are recruiting kids straight out of college. Now there are some prop shops like the ones that make you put up capitol for instance that do not really care, they are just making money off your commissions while you trade your own money, then when your broke they put someone new in your spot to lose their money.

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  #15 (permalink)
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mongoose View Post
Don't really see where Al Brooks fits in ...

By his own admission it took Al Brooks over 10 years to learn how to trade.

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  #16 (permalink)
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I would disagree with the reasoning behind the claim that it should take 3 months, if not no prop shops would exist. The prop shop environment is instructive I think - @TopstepTrader could comment on this with some authority I bet. Doing an informal scan of the "funded" traders on topstep I would estimate the average years of experience (including trading prior to working with topstep) is something like 3 or 4. I think you'll find that many of the traders who become funded with less experience have some background in finance or a related industry.

As to prop shops more generally, they don't just hire people, train them for 3 months and, presto, the trader is consistently profitable. If that were possible, who would they win money from because every tom, dick, and harry would be hiring MBAs and making them profitable in 3 months - who would be unprofitable? Maybe they hire someone with a few years of experience and turn them into a mildly profitable trader in 3-6 months but I would guess that much of this is due to the very tight external risk controls and constant coaching they receive. This idea that the average smart, motivated person can walk off the street with no experience and be consistently profitable in 3 months is fanciful IMO.

The 10,000 hour mark is obviously an approximation, not a magic number. And it refers to expertise, not mere competency. Finally, the research literature is pretty clear on this subject - which may or may not mean anything depending on your belief in statistical research and the scientific method.

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  #17 (permalink)
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The thin red line

Digging in a bit...

1) If a prop shop gets some traders that are profitable after 3 months - why does that trader not leave the shop to trade only his OWN MONEY???

2) To reach a university degree - it needs many years of experience and learning - to get the title and make the first money. If it would be so easy to learn trading within 3 (maybe 6?) months - the world would ONLY consist of traders ;-)

3) Taking a look at the profitable futures.io (formerly BMT) traders here showing their journals... Plus looking at some futures.io (formerly BMT) members here
speaking about their journey on Combines (TST or others): All these writers must have some background, experience and
skills. Otherwise they could never let test their knowledge - at least in the big pond of sharks.
Looking at those active writing futures.io (formerly BMT) traders who made a successful combine - how many are these out of the ones who tried a combine? Assuming that these are all well educated traders with a lot of experience before leaning out of the window!

To make it short - trading means to put your hands in the dirt first - like in every other job - this is time consuming.

GFIs1

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GFIs1 View Post
1) If a prop shop gets some traders that are profitable after 3 months - why does that trader not leave the shop to trade only his OWN MONEY???

GFIs1

Whos money is it easier to risk? Yours or someone elses? I know I would much rather put your money at risk than mine, especially if you are giving me much more to trade with than I can risk on my own and I get a fair cut of the profit.

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  #19 (permalink)
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mongoose View Post
Whos money is it easier to risk? Yours or someone elses? I know I would much rather put your money at risk than mine, especially if you are giving me much more to trade with than I can risk on my own and I get a fair cut of the profit.

Very true!
But just at the beginning...
If you are a great inventor and you start your company - you would look to have all the decision making
in your own hands... Some investors without having anything to say but only invest are fine then.
As long you are thinned out as a owner - others will take your invention to make money.

To have that tuned down to the trader - what is more interesting to you: to get 100% of the wins (after
deduction of the loosers) as you trade your own (plus family and friends) capital or only 25% of the wins
when you are trading for a prop shop?

GFIs1

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  #20 (permalink)
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How long is a 10,000 hour piece of string ?


@Big Mike - It's a good question ... sort of.

As someone who is somewhere between 1200 and 1500 hours into it I think that the whole thing can certainly be shortened.

I learned a few languages as an adult and also learned a few young person's sports (snowboarding for example ... nearly bloody killed me). This is helping me hugely as I know what progress feels like. Indeed learning to trade is is a lot like learning a language. However the way I am going about is not as structured as say following a language learning course or going to a language school.

A prop company has a certain body of knowledge , probably very restricted and focused and then lets the trader loose on a particular type of trade in a very specific market. They will certainly over control you at the beginning. I have a feeling that this is a good idea. This training course that they have is certainly part of the intellectual property of the company.

TST for example have a different approach - they say .. take a much time as you like, spend time scratching the walls to see if that helps move CL and then jump through our hoops. They don't invest in the 10,000 hours but will control your flight after that and you get to benefit from controlled leverage quickly.

Any individual (like me and many of us) begins the flight of the bumble bee, hampered by our own hope and hunger but certainly boosted by our own motivation. We definitely need more structure and more than a few pointers on making sure that we don't either go bankrupt or loose all hope before we run out of motivation.

Let's say it takes 10,000 hours ... or 8,000 or 6,000 or 12,000 the question is :
  • What did you spend your 10,000 hours doing?
  • What were the time intensive things ?
  • What is the curriculum?

Could we pull together a list for say a two year full time programme - a kind of Master's degree from futures.io (formerly BMT)?

podski

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