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Deliberate Practice in Trading

by TradingDrills Academy

The Science of Expertise has emerged in the past two decades by identifying how professionals across a wide range of fields, from musicians to athletes, to surgeons to chess players, move from average to elite performers.

The concept of the Cycle of Excellence has evolved to Deliberate Practice and is used widely by High-Performance Coaching. Deliberate Practice in trading is an active process of skill development and a critical element of trading success, which we will discuss in this video and page in more details.

During the past two decades, a growing body of research has examined the methods professionals use to achieve expertise. As outlined in the book “The Cycle of Excellence: Using Deliberate Practice to Improve Supervision and Training”, the outcome of many researchers on the subject of expertise identified three common components critical for superior performance, which work in tandem to create the “Cycle of Excellence”.

The Three Critical Components of the Cycle of Excellence

The Cycle of Excellence consists of three critical elements that need to be repeated and practiced constantly under supervision:

The cycle of excellence leads to trading success
  • Evaluation: The first step is the Evaluation of the current level of candidate’s skill. This defines the person’s current baseline for future reference.
  • Feedback: The next step involves receiving constant trading feedback on performance, so the candidate knows what corrective actions or practices to take.
  • Practice: In the third step, practices are assigned by the coach based on the candidate’s level. The candidate needs to repeat this cycle and practice constantly under supervision to achieve excellence.

The Role of a Coach in the Cycle of Excellence 

A coach has critical role in development of the Cycle of Excellence components in the beginning stages.

Their roles consists of:

  • Development of the Evaluation System
  • Development of the Feedback System
  • Development of the Deliberate Practice System

A coach oversees the performance of the Cycle of Excellence. In addition to the roles which are highlighted above, coaches also help with trading system evaluation, feedback on training progress, and additional trader's training. Having a trading coach is essential for success, but one may have a hard time finding a good coach and the hourly rates can be expensive for one-on-one sessions. Trader training programs based on cycle of excellence which include a built-in trading coach, like PAAT, is the most cost effective way to develop skills necessary for trading success without the risk of losing money in the financial markets. 

Traders need a trading coach to make money in the stock market

What is Deliberate Practice in Trading?

Deliberate Practice in trading provides the perfect foundation to build an effective training programs for beginner trader. There should be a constant trader evaluation by the coaching system, along with specific learning targets, such as learning how to draw upper range lines on a price chart. The difficulty of each level should gradually increase as trader's performance improves. The instant feedback by smart drills or a coach would let the traders know the right away to do a task, and to learn from their mistakes quickly and efficiently.

  • Level Evaluation
  • Setting Specific Goals
  • Repeated Focused Practices
  • Constant Instant Feedback
A coach will help successful traders become profitable with deliberate practice trading

What's so Challenging About Deliberate Practice in Trading?

  • Repetitive practice of a specific drill: Repetition is important to develop trader's habits and enhance the speed and fluency of execution. 
  • Designed outside trainee’s comfort zone: Drills become more challenging as person progresses to higher levels, which is important to develop strength and endurance.
  • Requires sustained concentration: Drills are mentally demanding and need high level of concentration to be executed correctly.
  • Be receptive to corrective feedbacks: The trainee needs to be coachable (capable of being easily taught and trained) with positive attitude while coach encourages and energizes trainee during though drills.
  • No immediate rewards or instant gratification: Reaching a high-paid  level of expertise requires mastering many complex skills over time.This requires long term planning, investment, and commitment.
Challenges traders face in the stock market

Deliberate Practice in trading is challenging, but it's essential for sustained profitability, which well worth it!

The Importance of Trading Skill Development

Successful traders use a coaching trader system and use deliberate practice

Beside the above-mentioned challenges of Deliberate Practice, many aspiring traders do not understand the Three Domains of Knowledge and the guided practice needed to turn knowledge to practical skills. Understanding these concepts will have significant impact on an aspiring trader’s attitude and planning toward proper training. We will discuss this topic next under section of “Importance of Trading Skill Development”.

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