Embrace Repetition (The Little Book of Talent)
- Thread starter trader99
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That's the entire idea of deliberate practice. Let's say you have a basic strategy in terms of entry and exit rules. But in real-time, it's might be difficult to identify and execute that under pressure. So one can practice in sims so that when that in real life you will execute with ease.
This is very trading style dependent. For system traders, they just backtest and build their strategies. For swing and long-term trader the idea of deliberate practice might not apply.
But if you read Brett Steenbarger's book Enhancing Trader's Performance, he noted that for short-term daytraders that he has worked with in real prop trading firms(back in the days. the book was published in 2002), they practice their setup so much that it becomes automatic.
If X happens then they will execute on Y. The linkage between X-Y is so quick and automatic that even if they are down for the day but when their setup X happen they will execute Y flawlessly and bring it back up. It's just example from the book.
Brett Steenbarge idea of deliberate practice for trading goes like exactly what you saying. So let's say you are normally a trend trader but you want to increase your toolbox. So you practice on sim for days that are flat or rangebound. Vice versa if you are rangebound/mean reversion trader and normally don't do well in trend trading. Or someone who is long bias but now want to practice shorting.
That's the idea of practice. Practice to FIX and cement good habits. Not practice to cement bad habits.
Exactly. And it's not all sim. 1 hours of real trading and 5 hours of research or practice.
Unfortunately, most traders, good and bad, do not know what the day will hold. So when would this trader practice?
More important, sim-trading, practice, whatever its being called, will not make a lousy system or method a better system or method. If the fault lies in the execution by the trader, practice makes sense. What exactly is being practiced is crucial.
So true! The more painful reality is that traders-to-be, like us, are facing. Once you make your modest fortune and are trying to place your trading orders from Swiss banksters; your orders most likely will never reach the exchange. Leaving all the money that you were supposed to lose on the tables of white-collar criminals, instead of professional traders pockets, and preventing you from the taste of real exchange experience.
I wonder about all these ideas about practicing 5 hours for 1 hour of taking a position, etc.
Reality is you're always in a trade, unless you're broke, so it might as well be one you think is going to make money.
If nothing else you're long the currency, did you practice 5 hours to take that position ?
Reality is you're always in a trade, unless you're broke, so it might as well be one you think is going to make money.
If nothing else you're long the currency, did you practice 5 hours to take that position ?
This is a true story. My brother is a senior software engineer working in Silicon Valley. He said his boss hired this expert database guru to optimize the company's enterprise database to run faster. Engineers have tried everything but no further performance were made. The guy came in a for a week or so and made it significantly faster. He was duly paid several hundred thousands for a week's worth of work. And management said he was totally worth it.
This database guru probably spent people spent years or even decades learning his craft and become world class. When it comes to execution it only took a week or so.
Similar anecdote can be said of any field about expert preparation time vs execution. An Olympic diver makes a perfect triple spin then dive into the pool for all to see which lasts about 20 seconds. But it took him/her decades of training to execute that dive.
The point is training/research/trading simulation/study are all preparation for the right opportunity. When the right opportunity comes then all that practice,research,study, etc. will enable one to 1) recognize the opportunity 2) execute on it flawlessly with size and conviction.
Of course the best way to learn is through experience. But trading, unlike other fields, mistakes can cost you a lot of money. Why not practice it when it's not costing you money and refine your strategies & execution to be near flawless.
So, when the right opportunity comes you can load the boat for huge profits.
I had all sorts of biases that I'm slowly getting rid of one by one through sim trading and real life trading. I'm also practicing on making entries and exits even more precise. Time it just right and get price improvement on entries and exits.
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practicing means one knows what to do and practicing to improve the way one does it
wannabes have now clue what to do so what they are going to practice?
people still do not understand that 99.99% live and die here not because of the lack of practice but because they never found correct rules of the game and practice mostly wrong thing...
Why are you so pessimistic? I give them at least 95%. That's optimism. Hehe.