Several experts have argued that deliberate practice is essential for achieving expert performance.
Macnamara et al. (2014) collected 88 studies (with 11,135 participants) about the effect of deliberate practice to examine how important deliberate practice really is.
In each of those 88 studies, an estimate was made for how much hours participants were spending on deliberate practice through either conducting an interview, questionnaire, or letting the participant keep a log.
Performance was measured with an objective measure, a laboratory task, group membership, or expert rating.
When Macnamara et al. (2014) combined the results of all those studies, they found that how many hours a participant spend on deliberate practice explained:
26% of his/her performance in games,
21% in music performance,
18% with sports performance,
4% in educational performance,
and less than 1% for professions.
Another important point is that, when the time log of participants was used, the impact of deliberate practice on performance was even less than these percentages. So perhaps people have a tendency to miss-estimate how much time they spend doing deliberate practice.
Additional analyses from the researchers shows that deliberate practice had a larger impact on performance for activities that were highly predictable. But for activities that were much less predictable, deliberate practice matter much less.
We can also see that above: playing music is highly predictable and deliberate practice has a greater weight there (21% of differences in performance explained). But job performance, which has much more variables than playing music, is practically unaffected by deliberate practice (less than 1% of performance explained by deliberate practice).
But even in highly predictable and structured activities, like playing a game or making music, only 26% to 21% of the difference in performance was explained by the amount of deliberate practice. This suggest that around 75% of people's performance in predictable activities is due to other factors.
The authors suggest that these other factors could be general intelligence or working memory capacity.
Because much of the performance of people was attributable to factors other than deliberate practice, the authors conclude that deliberate practice is not that important.
But why does deliberate practice seem important? It might be because it is an indication of ability: people stop doing what they don't do well and feel rewarded for. So successful people have spend a lot of time in deliberate practice, but that's because they are good at it or have some ability. It doesn't necessarily mean that they achieved expert performance through deliberate practice.
Because trading is a unpredictable activity, probably comparable with professions and not with music or games, it's likely that deliberate practice is not that important for trading.
Of course, practice is important especially when someone is a newbie (practice can, after all, give confidence and that is quite important in trading). But the data from Macnamara et al. (2014) suggest that we should not consider deliberate practice essential for expert performance or give it a large amount of weight.
In other words, it looks like deliberate practice is not a holy grail for achieving expert performance, especially for unpredictable activities like trading.
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To (try to) explain it further, one of the things the study says is what you experienced yourself:
Because golf is much more predictable than trading, golf is much better suited for deliberate practice. And, as you already mentioned, deliberate practice in trading might not have a big impact because the markets are (to a certain extend) unpredictable and ever changing.
There is a saying: “studies either confirm what common sense already suggests, or they are wrong”.
I do not disagree with much of this study, except their conclusion. It may certainly be true that deliberate practice contributes only 20 or so percent to performance but it is a very important 20% indeed. History is littered with those who were born with the 80% and wasted it away because they didn’t apply the 20%. The successful were also born with the 80% and they did the hard 20%. For them to conclude that for high level musicians or athletes “deliberate practice is not that important” is silly. I would like to hear what Jerry Rice or Tiger Woods or Roger Federer think about that notion.
It is no surprise that deliberate practice has a greater influence on activities with objective performance measures (they use the word “predictable” for some reason). In these activities competency or lack thereof is clear. There is a scorecard. With other “professions” the definition of success is foggier. In most professions many factors contribute to success beyond competency. Among them luck, personality and the ability to BS. In many professions, a person can have an entire successful career without really having to apply the intensity of training or focus that a high level athlete or musician does (or trader?). Woody Allen’s suggestion that “90% of success is just showing up” is spot on.
As regards to trading, I do believe trading is more like sports than other unpredictable professions. While the market itself may be unpredictable, performance results are cruelly objective. There is no BS in trading. You either make money or you don’t. We know that some traders are successful. We know that they have a technique and mindset that contributes to their success. Is it so unreasonable then to conclude that these things can be practiced? Brett Steenbarger (“Enhancing Trader Performance”) doesn’t think it is so unreasonable.
It would be interesting to hear if or how others practice their trading.
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