This is a somewhat long academic paper about the development of confidence and talent among elite swimming champions, but it is well worth studying. The key point made by the author is that excellence is mundane. Greatness is not necessarily a function of unique talent or special opportunity. We achieve excellence step by step, through intensive deliberate practice, where we perform a skill, monitor our performance, make small but steady improvements, and gradually perform at elite levels. The example I used in my recent presentation for Traders4ACause was the meter that I use to measure my blood glucose levels through the day. Each day I learn what contributes to high and low readings: the foods I eat, the types of exercise I do, my sleep patterns, etc. By tweaking each of these, I’ve been able to stay in my target zone range well over 95% of the time. Prior to the use of the meter, I never came close to that control.
When I was a student in college, I would read each professor carefully to see which points were emphasized, what was written on the blackboard, what was included in handouts, etc. This would guide me in what to study. When I missed items on a test, I went back to my notes and figured out what I had missed and how I could have included it in my studying. That then guided my preparation for the next test. By the end of the course, I was unusually good at figuring out what would be on my exams: my overall GPA was 3.87. That wasn’t because I was so much brighter than other students. I simply learned how to play the game.
Great traders learn how to play the game, only there are many potential games to play. Your edge doesn’t come from the game itself, but from the process of mastery that allows you to win at the game. This is why trading journals have to incorporate detailed analyses of trades and how those trades could have been conceptualized, structured, and managed better, so that you constantly refine what you do. Many traders simply summarize their day or their feelings in a journal and wonder why they don’t achieve mastery. Mastery comes from the mundane practice of taking one skill after another and honing them until consistency is achieved.
Talent is inborn, but it develops through exercise. What builds our trading performance is what builds us up in the gym: the steady tackling of challenges performed the right way. This is why there can be no trading edge without our pursuit of discomfort. Honing performance means embracing our shortcomings and turning those into learning and development. When that honing becomes an ongoing process, great things can happen.