Trading Psychology: Nature vs Nurture Part 2

Last week we spoke about nature, what it is and if it does play a role in trading and if it makes someone a better trader. This week we are going to discuss nurture and the impact it can have on a trader.


As we saw in last week’s article with the great debate between Richard and William to see whether it was nature or nurture that plays a major role in the success of a trader, based on the results it was nurture that had the bigger positive affect on the traders. So why does nurture play such a big role rather than nature? For the answer to that question, we will have to go deep into psychology, specifically behaviourism.


What is behaviourism? Behaviourism is the theory that psychology can be objectively studied through observations. We will not be going through all the theories that come with behaviourism, but I will talk about one experiment conducted by Bandura, who wanted to see if social behaviours (aggression) could be acquired through observation and imitation. During this study they had 36 boys and 36 girls between the ages of 3-6 years old. The researchers pre-tested the children for how aggressive they were by observing the children in the nursery and judged their aggressive behaviour on four 5-point rating scales. It was then possible to match the children in each group so that they had similar levels of aggression in their everyday behaviour.


24 children (12 boys and 12 girls) watched a male or female model behaving aggressively towards a toy called a ‘Bobo doll’. The adults attacked the Bobo doll in a distinctive manner – they used a hammer in some cases, and in others threw the doll in the air and shouted “Pow, Boom.” Another 24 children (12 boys and 12 girls) were exposed to a non-aggressive model who played in a quiet and subdued manner for 10 minutes (playing with a tinker toy set and ignoring the bobo-doll). The final 24 children (12 boys and 12 girls) were used as a control group and not exposed to any model at all. Children who observed the aggressive model made far more imitative aggressive responses than those who were in the non-aggressive or control groups.


There was more partial and non-imitative aggression among those children who had observed aggressive behaviour, although the difference for non-imitative aggression was small.


The girls in the aggressive model condition also showed more physical aggressive responses if the model was male, but more verbal aggressive responses if the model was female. However, the exception to this general pattern was the observation of how often they punched Bobo, and in this case the effects of gender were reversed.


Boys were more likely to imitate same-sex models than girls. The evidence for girls imitating same-sex models is not strong.


Boys imitated more physically aggressive acts than girls. There was little difference in the verbal aggression between boys and girls.


This experiment shows how quickly we can pick up new behaviours and how easily we can be taught new things, but it still comes down to you to put the effort in to keep learning, keep practicing and keep trading. Trading is like any other skill, need to keep practicing. No one is born great at something, it takes commitment and dedication to get where you want to be. So in Short, it is more important how you cultivate your own trading skills rather than trying to rely on a genetic disposition or affiliation to trading. Anyone can learn to become a great trader.


Ryan Mowatt  The Performance Coach

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