"Hard" skills vs "Soft" skills
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Thread: "Hard" skills vs "Soft" skills

  1. #1

    "Hard" skills vs "Soft" skills

    Hi traders!

    We all know that in trading we should develop skills (as well as knowledge and mindset), but many traders are confused with that – when they read a book, everything seems simple and even easy, but when it comes to recognizing patterns in real trading context, level of ambiguity and uncertainty becomes so strong that It interferes decision making process (and shifts probability of success not in trader’s favor)
    In this article I will offer you concept of «hard» and «soft» skills, brought to the public by Dennis Coates, CEO of Performance Support Systems and author of books on leadership.

    «Hard skills» are ones that concern some technical side of the process – machine operation, instructions, standards e t.c. Those operations are easy to measure and evaluate (though, not necessarily they can be easily executed). Thus, hard skills can be obtained through intensive formal training and formal education. You know what to do, you know how to teach it, you have linear connection between actions and results.
    And the second type of skills is «soft skills». Those are ones that can’t be measured and evaluated as easily as «hard» skills. Examples of soft skills are: communication, ability to sustain dialogue, solve conflicts and make decisions. If we talk about those sets of skills in terms of intelligence, hard skills require application of linear, formal logic and it’s easier for technicians rather than communicators. «Soft» skills require higher level of emotional intelligence rather than formal logic.

    How do you think, if we apply this model to trading, what type of skills would be in greater demand for us?
    Well, of course, some hard skills are necessary in trading, but mostly trading is not a science, but rather an art. Art of evaluating probabilities, art of reading context, understanding market conditions and managing risk. I would say, that «soft skills» are ones that call for trader more than for anyone else.

    All right, but how can we develop soft skills?

    First of all, we must understand that in trading as in any other form of art, it’s counterproductive to establish formal logical connections between different details of the picture. Traders often tend to do that – they go top down and try to find very specific patterns that will make decision making process easier. They overcomplicate the picture.

    Why do they (we) do so? After all, trading is not very complex – there are just two ways of trading – to go with the price if you think that value will get closer to price, or to fade the price if you think that price will get back to value (whatever you mean by that). Ways of entering positions are also very simple – you can either play a breakout or fade a pullback (in case you go with a trend), or you can fade breakouts or trade-off certain levels. Basic trading patterns are not also very complex and can be drawn in a simple manner.

    But when you show this picture (say, basic trading patterns) to some sophisticated trader, he would immediately respond – «Ha, it’s impossible to earn money that way, you will not be able to find anything like this on the market». And in general, he will be right because specific forms will never be the same and they change dynamically, but principles remain the same since market was invented!

    Ability to recognize trading patterns is a «soft» skill – you have to sit back, look at the chart in unfocused and unbiased way and suggest an idea (hypothesis). On webinar called «Decision making process for trader» we’ve been making exercise called «The Bongard problem». Task was to recongnize very simple pattern, but it was impossible when attendees started to search for something very specific. In other words, people have been «switching on» their logical side of mind when rather than creative thinking when facing difficult tasks.

    Now, try to solve this task too (the Bongard problem). Explanation and picture you will find below (don’t try to use websearch, try to solve it by yourself):


  2. #2
    Quote Originally Posted by Value trader View Post
    when they read a book, everything seems simple and even easy, but when it comes to recognizing patterns in real trading context, level of ambiguity and uncertainty becomes so strong that It interferes decision making process
    When a theory or trading strategy is described in book then most of the time it is given in most basic form. So when we read that then we say, oh,this is the strategy, it's so simple, it can be identified easily. But real market trend and picture isn't so smooth, so it becomes hard to identify the pattern and make decision.

  3. #3
    What about solution? Have you recongnized a pattern shown on the picture?

  4. #4
    Join Date
    Sep 2013
    I not understand about the hard skills and the soft skills ad what is the solution and how we recognize the pattern, i request you that if you describe in simple word it will help me and help the other traders as well in the trading to know about the hard and soft skills.

  5. #5
    Join Date
    Oct 2013
    dear my friend, i still do not understand with hard skill and soft skill, why were they called hard and soft skill, are they about technical and also psychological or test IQ? and how to implement them ? please forgive me, because i am new about it

  6. #6
    I feel that the diagrams in the B group are nothing but the smaller or abstract version of the diagrams in the A group. I totally agree with the stand that it is very much essential for the traders to develop soft skills if they want to excel in the forex trading business. Hard skills can be developed with gathering more knowledge, but its critical and depends upon the traders mindset to develop the soft skills which act as deciding factors for ones success.

  7. #7
    On Forex market trading skills is need must. Because if we have not good skills about the trading strategies then we may loss on trading. I think hard skills can help you analyze the market more accurately and soft skills help you also to analyze the market. We should try to increase our skills every day.

  8. #8
    Join Date
    Aug 2013
    Trying to understand the gist of this education through repeated study. But my less skill and knowledge are the main hindrance to understand about it properly. Yet, I am trying to understand about it and take the lesson from it as I want to become a good trader. I have the intention to become a good forex trader and for that I am ready to do what is needed to do.

  9. #9
    Skills are important if we want to earn a huge amount in Forex . If we want to do something big we should check the skills we have , if we think we our capable of doing it we should do it.

  10. #10
    I completely believe the fact with the take a position that it is very much essential for the investors to create smooth abilities if they want to succeed in the currency trading business. Hard abilities can be designed with collecting more knowledge, but its crucial and relies on the investors attitude to create the smooth abilities which act as determining aspects for ones success.

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