Reader Questions Answered

Professional Trading: How Long to Get There, Are Good Genes Required?

I got a set of questions from a member of my mailing list over the weekend. They bring up issues that are the source of some intense debates among traders at times.

How long does it take for someone to be a professional trader?

How is preparation to trade successfully compared to training of an Olympic medalist?

Is trading hard or easy?

Is talent required to succeed in trading like genetics in sports?

Let me take the hard/easy question first.

The actual act of trading is incredibly easy. Click a button and you can buy or sell instantly. Anyone can be taught to do that. Trading with consistent success is definitely not easily accomplished. Actually, I should say that successful trading can also be easy, but the path to get there is most definitely on the hard side for just about everyone. To relate it to sports as the questioner has done, high level athletes are often said to make the execution of some skill look easy, but we know it took many hours of dedicated training and practice to reach that point.

Now, in terms of how long it takes to become a professional trader, that depends on how much consistent work and effort is applied. I’ve heard that bank training programs intended to bring a new person up to the point where they can be depended upon to handle the firm’s (and/or its customers’) money without doing too much harm can run a year or longer. That’s usually a combination of classroom work and on-the-job training with an experienced guide. If you figure 40 hour work weeks for 50 weeks a year you’re talking about 2000 hours.

Even that might not be enough time, though. I’ve mentioned previously the idea that 10,000 hours are required to gain a high level of proficiency (see this Trader’s Narrative article). That’s five years of 40 hour weeks, which actually just about fits. I think you’d probably find that the good Wall Street traders have at least that much time on the desk in the majority of cases. There are ways to speed things up a bit, perhaps, but it’s still a lengthy and involved process. In that respect it is akin to the development of an Olympic athlete.

As for genetics or talent, I can’t say with any authority. Obviously, some minimal level of mathematical ability is required. Beyond that you start getting into the nature/nurture debate. I personally think both are required and to some degree more of one can offset less of the other.

1 reply on “Professional Trading: How Long to Get There, Are Good Genes Required?”

I agree with your 10,000 hours John. Some people might succeed much quicker than that but it usually takes a lot of experience to figure out what one’s personal style is. And then you have to get the psychology down. Taking a loss when your rules tell you to can be painful when it immediately turns back and goes the right way without you. There are at least a million other things that can shake your confidence even if you have been trading for decades. The markets can be very cruel!