Implicit Learning,Expert level Performance
There are many ways of becoming immersed in the markets 1) Through research 2) Observatiuon of charts 3)Tape Reading etc.We see enough examples under sufficient conditions of attention and concentration that we become able to intuit the underlying patterns.
In an important sense, we learn to feel our market knowledge before we become able to verbalise it.Much of what you might know about the markets may take the form of implicit knowledge that is encoded non-verbally.
Few people can undergo the 'Starving Artist' phase of skill building.
The implicit learning research suggests that much of the expertise we acquire is the result of process that are neither conscious nor intentional.Many performance skills, such as riding a bycycle and learning a language are acquired in just this way.We learn what to do, even with great proficiency but cannot fully verbalise what we know or reduce our knowledge to a set of patterns or principles.It appears that much repetition is needed before implicit learning can occur.
While therapists say their work is grounded in research and makes use of theory based techniques, the actual factors that account for positive results are implicit, and acquired over a course years of working with patience.Similarly traders may attribute their results to the research or patterns they are trading.In reality however, the research and the patterns are siply 'cover stories' that legitimise seeing many markets over the period of years.It is the implicit learning of markets over thousands of 'trials' that makes for expertise, not the conscious strategies that traders profess.
When we encounter new situations, as in the markets, we will tend to process the information non-verbally which means implicitly, only when we have made these patterns highly familiar will there be transfer to left hemispher processing and an ability to capture in word.
Some of the complexity of ones understandings, as we know from studies of regional cerebral blood fow, the right hemisphere, is also activated under emotional conditions.It is not surprising that our awareness of novel patterns, whether artificial grammers or in markets, would appear as felt tendencies rather than as verbalised rules.
Much of what you might know about the markets may take the form of implicit knowledge that is en-coded non-verbally.If indeed it takes thousands of trials to generate successful implicit learning, a great number of traders would have been bankrupted by then.Many others might not survive that number of trials simply due to the time and energy required.
It is impossible to obtain a full time income from trading without developing the mastery conferred by years of experience.Fear,Greed,Over confidence, Self blame, all these undercut even the most mechanical trading.
If the internalisation of complex patterns requires many thousands of observations across different market conditions, the challenge for the trader is making this process as efficient as possible.
Traders become so immersed in the markets that they acquire the (implicit) ability to read moment to moment patterns of momentum and price change.This creates an ideal learning environment, having so many patterns to read per day make the development of expertise much more efficient.
If we look at how experts are trained in other fields, we notice a common factor, an intensive period of apprenticeship in which the student works under a master and obtains continuous instruction and practice.Learning of expertise may depend as much upon the mind state of the learner as the quality of instructional materials.
How does one gain expertise as a trader ?We have seen that expertise is often described as the outcome of an explicit research process or as an explicit process of acquiring knowledge about recurrent patterns.Much skill based learning, however, is acquired implicitly as the result of processing thousands of examples.Small chidren learn language, long before they can verbalise rules of grammer and syntax.
The key ingredient in trading development may be the immersion not the research or the patterns.If you want to become a proficient trader, the most promising strategy is to immerse yourself in the markets under the tutelage of a master trader.
You need to process examples after examples under real trading conditions with full concentration to develop your own neural net work.
I believe the most exciting frontier for trading psychology is the development of tools and techniques for maximising implicit learning process.Such techniques would assist both in the aquisition and utilisation of expertise by trainning individuals to sustain states of consciousness in which they are open to implicit processing.There are reasons for believing that experienced traders pocesses greater expertise than they are aware of.
People not only learn complex patterns implicitly, they continue their implicit learning when the patterns shift.This has major implicatiuons for the development of market expertise.The markets are always changing, but as long as we stay in our learning modes we can adapt with them.
EXPERT LEVEL PERFORMANCE
We can only benefit from demonstrated edges in the market, if we allow those edges to unfold.But how can we learn such patience ? The aquisition of expert level performance in a domain is very difficult and takes many years.
Identify a sequence of trainning tasks with attainable learning goals that will eventually lead to the desired level of performance.This is the complex and ill defined goal of acquring expert performance.Highlighting a limited number of trading skills and then drilling traders on these day after and day in real time trading.
Expertise is a function of 'years' of deliberate practice on a regular basis.
Gradual nature of skill development.
The best way to become a full time trader is to trade full time because that is where the exposure is but the learning curve can be greatly accelerated if you have a mentor who can break trading down into component skills and assist with drilling.
More goes into expertise than drilling.There are several other factors.
1) Natural tallent.There is little doubt that certain basic skills are present in some individuals more than others.
2)Early strong interst in the activity aided by mentorship and encouragement.Coaches and mentors generally play a critical role in the development of tallent.
3)Sheer quality of practice.Those who become expert in their domains practice a lot.Indeed practice is their major activity.Olympic athelets are a great example.Their learning curves are so much more advanced as a function of greater exposure.
4)However the quality of practice is as important as the quantity.Specefically valuable practice is highly directed and deliberate.Quality practice generally involves working with high quality teachers against high quality opposition.
5)Multiprocessing of information.There are different learning styles and most people have strengths and weaknesses as learners.An acronym that is useful in remembering learning styles is VARK, V- for Visual, A- for Auditory, R-for Read &Write,K -for Kinesthetic (kinesthetic learner learns by doing).If we hear it,see it,read it, and do it,the skill and information is more likely to be internalised.
6)TIE OR 'Trainning in Extremity'.Successful trainning and development of expertise commonly involves performing skill under highly challenging and even adverse conditions.
The expert performer builds mental toughness and develops the inner confidence that he or she can handle anything.The shorter the time frame of trading, and therefore the more rapid the trading, the more necessarily it is, that the skills involved in trading be made Automatic.
Speed of processing and executing skills is every bit as important as acquiring those skills in the first place.Expertise consists of taking what starts out as effortful and making it automatic more and more efficient.Frontal lobes do the function of planning,judging,analysing and reasoning.
Trading is a crucible of life, it distills in a matter of minutes, the basic human challenge, the need to judge,plan and seek values under conditions of risk and uncertaininty.In mastering trading,we necessarily face and master ourselves.