Nature vs. Nurture and Trading

What the Turtle Trader trading book does is question the age old debate between nature versus nurture. Do genetics and people’s innate qualities predetermine someone’s success in the markets? Or is it someone’s personal experiences from learning, interaction with peers and direct personal practice with trading the markets determine success?

Having read the Complete Turtle Trader book by Michael Covel, I would conclude that success in trading doesn’t wholly depend on either nature or nurture. It is a mix of both qualities obtained from both streams. Although the whole premise of the Turtle experiment of taking people from all walks of life, all ages and from different occupations and backgrounds to train them up to become successful traders – there were other prerequisites.

The prerequisites to becoming a turtle trader was to pass the ‘test’ as determined by Richard Dennis. Among the other qualities he was looking for, the one quality that set the whole group apart from the other people seems to be their risk taking ability. Just like there are people who are ‘naturally’ introverts and others who are extroverts there are people who are comfortable with taking risks and others just like to play it safe. (Of course there are people who take stupid risks and others who take calculated risks). But I think Dennis was looking for risk takers. Trading is all about risk taking and thinking about probability. So the people he hired for the program tended to be people who already are risk takers – but not necessarily in trading (or gambling).

As with anything in life – there are people who have talents and skills that come naturally (nature) to them and others who need to train and learn harder (nurture) to acquire the same skill set. Trading is no different, anyone can learn trading – but this comes with a catch. People who cannot take risks, who aren’t comfortable with taking risks will find the road to trading success just that little harder.

If you are interested in the whole general nature versus nurture debate you may find these following websites of interest:

• Nurture vs Nature in Intelligence
• Wikipedia page about the debate
• NPR transcript about twins and nature vs. nurture

This is post 2 of a series of “live book review” posts of the Complete Turtle Trader.