The Effort Effect
Great article. This is the paragraph that caught my attention:
“Cloninger has trained rats and mice in mazes to have persistence by carefully not rewarding them when they get to the finish. “The key is intermittent reinforcement,” says Cloninger. The brain has to learn that frustrating spells can be worked through. A person who grows up getting too frequent rewards will not have persistence, because they’ll quit when the rewards disappear.”
This makes me think of the records of many great performers, whether traders or athletes such as Roger Federer or Michael Jordan. They all had to confront massive frustration, and win that battle first before moving on to new heights. 
Roger spent 3 years losing match after match, many of them in the first round before he dug his heels in, made a 180 turn in his attitude (he used to yell, throw his racket like many, even pros, still do today) and developed his groove. MJ had to overcome the negative praise of his coach who told him he wasn’t good enough for his high school team to go practice countless hoops in his yard. Michael Marcus, or Mark Cook both had to blow up and learn to deal with failure before etching the neural paths in their brains that would allow them to keep their risk small and stay in the game long enough to reap the profits.
I think this is what it comes down to: some traders will learn to deal with failure and others won’t. It seems that success is really contingent on the trader’s response when he is in that dark pit of a drawdown, he either fights back and develops proper trading/mental skills or gives up immediately/slowly. The brain has to learn that frustrating spells can be worked through and I think it takes time for those neural paths to be etched in. No wonder pros usually say it took them years before things started to click. But that’s why they’re pros, they had the risk control skills and persistence to keep at it through the learning curve. The majority cannot do this.
Those coming from a ’smart’ reputation and prior success in previous businesses are particularly disadvantaged, because of the reasons stated in the article.
