Trading Tips

I’ll Take Experience Every Time

When I was a volleyball coach (youth and college) one of the things that was very readily observable was the value of experience. There was no more clear example of it than one day when I brought an 18-and-under girls’ team to compete in an adult tournament. It was something I did to help the kids get some valuable experience.

vbgirl.jpgThe team I had was a relatively strong one as compared to other similar age group teams from our region (New England). They were All State caliber high school players with some decent size and athleticism. The competition was low level, as adult rankings go. These were women not exactly high on the athleticism scale, and mostly at least 10 years older than my girls. In other words, you would not have looked at them and been impressed.

It was youth and athleticism vs. experience and the women won pretty much easily every time.

I, of course, knew what to expect. It’s why I put the girls in the tournament in the first place. My players jumped higher, moved faster, and hit the ball harder than their competition, but it didn’t matter. The women made fewer mistakes and knew where to hit the ball to score points. They knew how to position themselves to make plays.

Needless to say, my team was frustrated, grumbling about how they couldn’t believe they were losing to old ladies. But they did learn from the experience. They saw how the women hardly ever made mistakes and kept the ball in play. They saw how the women didn’t worry about pounding the ball as hard as they could, or running slick plays, but rather with being effective and getting the job done.

Sound like experienced traders vs. new traders?

Experience is the greatest teacher of all. An experienced trader makes fewer errors, knows the value or managing risk and following her/his trading system. The experienced trader has seen the price patterns over and over and over again, so things become much more intuitive and automatic. That’s why Brett Steenbarger and others active in trader education and development (myself included) encourage folks to get as much practice reading charts, doing analysis, and making trades as possible. And that goes for those who seem to have a natural gift too. Just as in sports, natural ability doesn’t mean anything without the knowledge of how to put it to most effective use – which only comes from experience.

By John

Author of The Essentials of Trading