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What do successful Traders and Students have in common

What may be the con­nec­tion between yesterday’s post on Trading’s Mid-Life Cri­sis: Get­ting Big­ger Vs. Get­ting Broad­er, writ­ten by a trad­er and author­i­ty in trad­ing psy­chol­o­gy, and Time Magazine’s arti­cle on How to bring schools into 21st cen­tu­ry?

Let’s first read a cou­ple of quotes from the shools arti­cle:

-“Many ana­lysts believe that to achieve the right bal­ance between such core knowl­edge and what edu­ca­tors call “portable skills” crit­i­cal think­ing, mak­ing con­nec­tions between ideas and know­ing how to keep on learn­ing the U.S. cur­ricu­lum needs to become more like that of Sin­ga­pore, Bel­gium and Swe­den, whose stu­dents out­per­form Amer­i­can stu­dents on math and sci­ence tests. Class­es in these coun­tries dwell on key con­cepts that are taught in depth and in care­ful sequence, as opposed to a suc­ces­sion of for­get­table details so often served in U.S. class­rooms. Text­books and tests sup­port this approach.”

- “Coun­tries from Ger­many to Sin­ga­pore have extreme­ly small text­books that focus on the most pow­er­ful and gen­er­a­tive ideas,” says Roy Pea, co-direc­tor of the Stan­ford Cen­ter for Inno­va­tions in Learn­ing. These might be the key the­o­rems in math, the laws of ther­mo­dy­nam­ics in sci­ence or the rela­tion­ship between sup­ply and demand in eco­nom­ics. America’s bloat­ed text­books, by con­trast, tend to gal­lop through a mind-numb­ing stream of top­ics and subtopics in an attempt to address a vast range of state stan­dards.”

Those so-called ““portable skills” are basi­cal­ly what neu­ropsy­chol­o­gists call Exec­u­tive Func­tions.

Anoth­er exam­ple is Aware­ness, or the abil­i­ty to eval­u­ate one’s own cog­ni­tive func­tion­ing and act appro­pri­ate­ly. We have iden­ti­fied a few exec­u­tive func­tions so far: 1) Aware­ness, 2) crit­i­cal think­ing, 3) mak­ing con­nec­tions between ideas and 4) know­ing how to keep on learn­ing.

Let’s now review some quotes from Trading’s Mid-Life Cri­sis: Get­ting Big­ger Vs. Get­ting Broad­er, by Brett N. Steen­barg­er.

- Aware­ness: “And, in life as in trad­ing, we face the issue of get­ting big­ger vs. get­ting broad­er. Do I build on suc­cess by grow­ing my com­pa­ny and doing more of what is work­ing, or do I begin to devel­op oth­er aspects of my life and use this suc­cess as an oppor­tu­ni­ty to widen my hori­zons?”

- Crit­i­cal think­ing: “The prob­lem with get­ting big­ger is that you’re bound to be at your max­i­mum size when mar­kets change and your edge erodes. I have seen this occur with many very suc­cess­ful traders at prop firms. In a sense, they were one-trick ponies and all their eggs were in the bas­ket of that one trick.”

- Mak­ing con­nec­tions: “It tru­ly is a mid-life cri­sis for traders. In the mid-life cri­sis we nor­mal­ly think about, we get to the point where we’re estab­lished in a career field and in a marriage/family. We real­ize that either we’re going to coast to the fin­ish line or tack­le some­thing new and chal­leng­ing while we still have enough time and youth­ful ener­gy to see it through. That ‘s real­ly the same issue fac­ing the suc­cess­ful trad­er.”

- Learn­ing how to learn: “Sec­ond-order com­pe­tence is the abil­i­ty to mas­ter mar­kets as they change (…) that’s what the great artists do. They don’t just paint, write, or sing in the same style the same way through­out their careers. They remake them­selves and keep their work fresh.”

In short, over the long run, what suc­cess­ful traders and stu­dents have in com­mon is that they know how to learn AND nev­er stop learn­ing. In a fast­ly evolv­ing world, it should come to no sur­prise that surf­ing new waves and adapt­ing to new envi­ron­ments is a must. Schools, par­ents, and com­mu­ni­ties and all of us should view the devel­op­ment of exec­u­tive func­tions as an edu­ca­tion pri­or­i­ty. And traders should read Brett’s post.

For relat­ed read­ing, you can now check out

- Cog­ni­tive Neu­ro­science and Edu­ca­tion Today

- Stu­dent Achieve­ment Gap, Stress, and Self-Reg­u­la­tion

- Enhanc­ing Trad­er Per­for­mance and The Psy­chol­o­gy of Trad­ing: Inter­view with Brett N. Steen­barg­er

- Dr. Elkhonon Gold­berg on Brain Fit­ness Pro­grams and Cog­ni­tive Train­ing

- An ape can do this. Can we not?

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8 Responses

  1. Eyal says:

    Inter­est­ing arti­cle. You may also want to con­sid­er the dis­ad­van­tages of the cur­ricu­lum in the coun­tries you sug­gest­ed the US should fol­low. One I am par­tic­u­lar­ly famil­iar with is that of Sin­ga­pore. Sin­ga­pore­ans pay a hefty price for their excel­lent results in inter­na­tion­al tests. Sin­ga­pore­an stu­dents not only spend enor­mous amounts of time on their stud­ies learn­ing mate­r­i­al by heart but also end up fin­ish­ing school with almost zero knowl­edge in his­to­ry, lit­er­a­ture, arts, geog­ra­phy and a host of oth­er sub­jects in human­i­ties.

  2. Alvaro says:

    Eyal, good com­ment. I think in fact that the arti­cle ide­al­izes what hap­pens in oth­er coun­tries.

    My main point is not that the US should what oth­er coun­tries do. My point is that we should focus more on the sys­tem­at­ic devel­op­ment of exec­u­tive func­tions, such as aware­ness, crit­i­cal think­ing, learn­ing how to learn. And do so bet­ter than any­one else does.

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