| In our traders masterminds, we recently gathered | | | | marksmanship using dry fire techniques, to the use of |
| together a number of successful professional traders | | | | blank ammunition, to the use of training aids and |
| and looked into the qualities that made us successful. | | | | devices, to live fire under controlled conditions on a |
| We settled on eight words that started with the | | | | daylight range, tonight fire under controlled conditions, |
| letter P to help us focus on the successful traits. | | | | today like fire and maneuver, to nighttime fire and |
| They are: persistence, preparation, participation, | | | | maneuver, to training with smoke and uncertainty. |
| practice, performance, perception, position sizing and | | | | Each progressive step adds complexity and |
| preservation. | | | | uncertainty in the soldier is trained to respond to the |
| This essay looks at the fourth P. successful trading: | | | | environmental cue. |
| Practice.there is an old saying that practice makes | | | | Traders can learn from this strategy by taking the |
| perfect, but there's another saying it's even more | | | | individual pieces of their system apart and mastering |
| true: perfect practice makes perfect. | | | | each component. When components are mastered, |
| In sports, the idea of practice is to create the muscle | | | | the trader should then start putting the pieces |
| memory that will allow your body to instinctively | | | | together and paper trading the system without |
| perform properly under periods of stress, when the | | | | money at risk. Once the signal is fully understood and |
| game is on the line and there's not enough time to | | | | decisions are rehearsed, a trader should then begin |
| think. At times like these, your body will automatically | | | | prototyping their live trading with small dollar amounts |
| do the things that he has been trained and | | | | to add the reality of real money at risk. |
| overtrained to do. | | | | Once the trader can successfully trade with real |
| In the military, this phenomenon can also be found | | | | money and in small position sizes, additional risk can |
| when it comes to training battle drills. Military battle | | | | be accepted and positions gradually increased until the |
| drills are designed to help soldiers survive on the | | | | trader discovers his natural risk appetite, which can |
| battlefield under periods of great stress when | | | | be defined as the point at which the size of the |
| thinking about the next action takes too long and | | | | position begins interfering with decision-making. Once |
| may lead to death. The military strategy for training | | | | that's been done, the trader now understands |
| is to overtrained a task until it becomes second | | | | current level of normal trading capacity. |
| nature. | | | | Throughout the process of practice and rehearsal, |
| In a process of iterative training, the military will | | | | the trader should be keeping a trading Journal in |
| gradually increase the complexity and realism of the | | | | which his progression can be documented and |
| training situation until it becomes indistinguishable from | | | | reviewed as a way to improve professional |
| the live event. | | | | competence. |
| For example, a soldier may move from rifle | | | | |