Embrace Repetition (The Little Book of Talent)

[trader99]

In The Little Book of Talent, one of the core ideas of to get better is to do a lot of practice(deliberate practice).

Tip #45 For Every hour of competition, spend five hours practice.

To apply the same ideas to trading, for every hour of live trading one should practice 5 hours on the sim. This is similar to what Brett Steenbarger recommends though he didn't specify the ratio. I think that's how @Xela got good and how many traders become better.

Now come the question of time and commitment to do that. A lot of beginner traders get their practice from live account and losing money. That's a painful way to learn trading skills. I was guilty of that too.

Just a pointer for new developing traders.

 

[jinxu]

Hehe. Actually no. You get better when you have developed trading rules/methods that actually work. Doesn't matter how much time you practice if you have bad trading techniques. And no amount of hours are going to help you figure out what works if you can't get a clue. Hehe

 

[southall]

To apply the same ideas to trading, for every hour of live trading one should practice 5 hours on the sim.

For a developing trader, for every hour spent trading they should also do at least 5 hours of research and trading plan development and also psychological work, mainly on how to follow the plan with discipline and not to get phased by losing periods.
As the trader becomes more experienced the ratio can drop over time.

 

[tiddlywinks]

First I'll say thanks for the mention of the book. It seems an OK read (or listen) by a credible author. No harm in keeping the brain/mind stimulated in positive ways.

Going beyond the mundane however, into the realm of trading, practice as has been mentioned as "sim trading" is detrimental. In my view, sim trading is useful for learning the mechanics of execution only. It, sim trading, does nothing to improve an already proven trading strategy, and extended use (of sim trading) can lead to several cognitive biases and behaviors being instilled and strengthened. The missing piece being "no-skin-in-the-game". Based solely on that omission, among other biases and behaviors, loss aversion and risk compensation stand out: these are emotionally charged in real trading. "Belief" of being in control is also a bias.

Thanks again for the book mention.

 

[d08]

First I'll say thanks for the mention of the book. It seems an OK read (or listen) by a credible author. No harm in keeping the brain/mind stimulated in positive ways.

Going beyond the mundane however, into the realm of trading, practice as has been mentioned as "sim trading" is detrimental. In my view, sim trading is useful for learning the mechanics of execution only. It, sim trading, does nothing to improve an already proven trading strategy, and extended use (of sim trading) can lead to several cognitive biases and behaviors being instilled and strengthened. The missing piece being "no-skin-in-the-game". Based solely on that omission, among other biases and behaviors, loss aversion and risk compensation stand out: these are emotionally charged in real trading. "Belief" of being in control is also a bias.

Thanks again for the book mention.

I'd agree but watching trades develop can give you ideas on how to approve or even ideas for new approaches. It's simply because our brains respond to inputs, even if they're detrimental in other, psychological ways.

 

[tiddlywinks]

I'd agree but watching trades develop can give you ideas on how to approve or even ideas for new approaches. It's simply because our brains respond to inputs, even if they're detrimental in other, psychological ways.

Not arguing, just discussion...

Screen watching (real-time, in sim) may produce ideas. But what is the usefulness (or at worst, need) for sim-trading a proven strategy? Even you mention it is/can be detrimental.

 

[d08]

Not arguing, just discussion...

Screen watching (real-time, in sim) may produce ideas. But what is the usefulness (or at worst, need) for sim-trading a proven strategy? Even you mention it is/can be detrimental.

No benefit I can think of, you're right. As you said, sim trading is for learning execution or testing the technicals of a platform.

 

[eves_banished_children]

Obviously practicing is useful, depending on what you are practicing.

It's like basketball, you can practice certain approaches, fade aways, jump shots, dunking, the list goes on and on.

But how many traders are actually practicing something new ? Are they learning to trade a flat market, learning to trade choppy markets, learning to trade from a lot of different perspectives and using different strategies ? Are they objectively looking at past performance and tweaking it to do better ?

Practice is counter-productive if you're just reinforcing bad behavior.

 

[d08]

Obviously practicing is useful, depending on what you are practicing.

It's like basketball, you can practice certain approaches, fade aways, jump shots, dunking, the list goes on and on.

But how many traders are actually practicing something new ? Are they learning to trade a flat market, learning to trade choppy markets, learning to trade from a lot of different perspectives and using different strategies ? Are they objectively looking at past performance and tweaking it to do better ?

Practice is counter-productive if you're just reinforcing bad behavior.

Sports aren't the best analogy. Your height and capability are roughly the same when you're playing and the basket is at the same height. Markets are quite dynamic and there are many variables.
It's almost impossible to do something in basketball that hasn't been done before. With trading, there are so many ways a trade can be put together, our lives aren't long enough to iterate through all the possible ways to trade.

 

[eves_banished_children]

Sports aren't the best analogy. Your height and capability are roughly the same when you're playing and the basket is at the same height. Markets are quite dynamic and there are many variables.
It's almost impossible to do something in basketball that hasn't been done before. With trading, there are so many ways a trade can be put together, our lives aren't long enough to iterate through all the possible ways to trade.

I wasn't equating markets and basketball, I was equating learning new skills in basketball with learning new skills in the market by trying new things instead of just reinforcing skills that aren't working for you. It's almost like you tried to find something to argue about.

I think learning to trade different perspectives is important because it helps you understand your own position from other people's points of view. Not doing that is how people get so surprised when their trades turn against them, they can't comprehend how or why someone would be taking the other side of the trade.