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KNOWING YOURSELF AS A TRADER
MASTERING TRADING PSYCHOLOGY
In 2008, Malcolm Gladwell published his New York Times
best seller, Outliers. This book looks at a number of “outliers”,
people who are extraordinarily skillful in certain subjects. In
breaking down what helped them to become outliers, Gladwell
introduces the 10,000-Hour Rule as “the magic number of great-
ness”. His findings are based on the published research of Swedish
psychologist Anders Ericsson, an internationally recognized
researcher in the psychological nature of expertise and human
performance. According to Gladwell, one common factor
among these exceptional “outliers” was the amount of time they
practiced within their chosen field. It appeared that one could
only become an outlier by accumulating 10,000 hours of prac-
tice (that’s close to 90 minutes per day, every single day, for 20
years). To use another of Gladwell’s popular terms, 10,000 hours
is the “Tipping Point” of greatness in any profession or sport.
10,000 hours. Well that’s a very scary figure! If Gladwell and
Ericsson’s conclusions are correct, and you spend two hours
trading every day, you will be trading 10 hours per week, and
considering that there are 52 weeks in a year, it will take you 20
years to become a successful full-time trader. If you can invest
20 hours each week into trading, it will take you 10 years. Most
of the new traders in our community are entering the world of
trading after a successful career in engineering, corporate life,
military service, or some other business or field of endeavor.
They will have already invested many, many hours into their
career. Who really wants to, or who realistically can for that
matter, spend another 10,000 hours on a new career at that stage
of their life?
The truth is, although becoming a world-class expert in
anything whatsoever will indeed take years, you do not need to
become an “outlier” in trading in order to make a living. You can
achieve a basic level of competence in trading (or in fact in any
other field) in a much shorter time. However, you need to find
the experts and you need to get the right materials. With proper