Trading is not about effortful study, or having mathematical abilities or even good hand eye coordination, but rather the number one deterrent for most people is they lack the emotional capacity to make decisions that have a monetary outcome. There have been countless academic studies particularly pertaining to gambling and simple investing. Most people, no matter how smart they are or how hard they work, simply are not cut out emotionally for this job. For example take Tiger Woods or former great Joe Montana. It's not just their ability or effort that made them good; it was how cool they were under pressure. How many guys could sink a put on the 18th hole with 5 million dollars riding on it? How many guys could hit a wide receiver in the end zone with an all out blitz in their face with 5 seconds on the clock and throwing the ball into double coverage? Well, none of us could. But Joe Montana did it, and he did it on a regular basis. Anyone can show you how to throw a tight spiral or how to hit an awesome cross court forehand in tennis. But under pressure, with the game or match on the line, at a professional level? Very few can.
Al Pacino had a great line in the movie "The Devil's Advocate". He was talking about pressure, how pressure changes everything. How anyone could be good at something, but how few people could really perform under pressure. His quote was "can you deliver on a deadline? Could you summon your talent at will?" That is what it boils down to. Can you perform under pressure? No amount of work will give you that. Very few people have that skill, very few. Hence the failure rate in trading. Emotional capacity is one's ability to handle pressure. One can always maximize the ability they have, but cannot increase that capability. One can put themselves under pressure a lot and get use to it and become more immune to it, but that is not the same as being able to excel under pressure. This is why there are very very few great sports stars yet there are millions of great athletes. Everyone can be trained, not everyone can excel.
Yes, Tiger was trained from a young age as was tennis great Andre Agassi who picked up a racquet at the age of 4. There is no doubt that most these professional athletes developed their "physical" skill at an early age as well as their hand eye co-ordination. Can we truly say this is what led to their greatness? You cannot attribute Tiger's greatness to playing at an early age. We are talking about real greatness here. There are many golfers on the PGA tour who have made it to the professional ranks. They hit the ball as well as Tiger, in fact some better. They put just as well; in fact, it's one of Tiger's weaker shots. They practice as much as Tiger. But you know what, when Tiger has to make a put, when he absolutely has to, the guy does, and that is called playing well under pressure. It's what separates all athletes.
Is Andy Roddick a great tennis player? You bet he is. Best serve in men's tennis by a mile. But what does it tell you when he played Rodger Federer at the final at the US open that not only did Federer outplay Andy, he out aced him 17-7. That's right, a guy that is not even known for having a decent serve, out aced the best server in men's tennis 2 to 1. Andy is a great athlete, but does not make the shots when it counts, he folds under pressure. You see very few people have that gift. Andy is out on the courts 10 hours a day. He is probably the hardest working guy on the men's tour. He picked up a racquet at age 5 as well. He is a great physical player. But when he plays Rodger Federer, he loses, and loses and loses. Andy has beaten Rodger once in 14 tries or so. The matches are usually pretty close. Rodger does not blow Andy off the court. He simply makes the shots he has to make under pressure, Andy does not. Same goes for Tiger. Most of the guys on the men's tour now lift weights and can drive a ball 320 yards. And most can put as well if not better then Tiger. Tiger just has this incredible ability to focus and concentrate, keep ice in his veins, and when he has to, "summon his talent at will".