The Parallels Between Flying And Successful Trading

    We conducted a study to examine the potential parallels that exist between flying and trading.

    We sponsored a group of 5 pilots to take part in our Professional Trading Programme. The goal was to see if a pilot’s years of experience with process and control could be translated into trading performance.


    Check out this short interview with Kate North-Hill, one of the pilots on the programme.


    PILOTS ALWAYS USE A CHECKLIST

    Human error can be a critical issue in both trading and flying. No matter the level of experience a pilot has, they will always go over the checklist as a form of verification that all known variables within their control have been checked. 

    In trading, we have a figurative “checklist” which is known as a trading plan. At Amplify Trading, the single biggest barrier to success with new trainees is overtrading. That is simply a result of not following the plan or taking trades based on impulse. 

    WHAT DID OUR STUDY FIND?

    The pilots traded less and had a higher winning percentage than the control group.

    Pilots exhibited natural discipline in sticking to the predefined rules of the strategy which resulted in them taking fewer trades when the opportunities did not meet the criteria of their predetermined plan. There was also a significantly higher win ratio between the trades they took, a reflection of an age old saying in trading 'less is more'.


    PILOTS ADAPT TO CHANGING ENVIRONMENTS 

    Imagine this scenario: you are following your trading plan, executing the trades and everything seems to be going good. Then all of a sudden, a Donald Trump tweet appears. You then have a choice, do you leave the trade, pull the trade or trade the tweet?

    The management of a trade can often be the most difficult part. As human beings we do not like being in a position of risk as it is uncomfortable, coupling that with a changing environment it can be a dangerous cocktail. This is very similar to pilots “approach criteria” when landing a plane. A last-minute change in variables can mean that a pilot is forced to abort their landing.

    This skill of being open to adapting your trading strategy and remaining mentally agile is a key asset for any discretionary intraday trader. 

    WHAT DID OUR STUDY FIND?

    The pilots held trades for longer periods in comparison to the control group. This inevitably resulted in larger winning trades which proved to be a key factor in the outperformance.


    GOOD PILOTS AVOID RISKS

    There is a saying in the aviation industry “There are old pilots and there are bold pilots, but there are no old bold pilots.”

    This can undoubtedly apply to traders too, the initial struggle with new traders is to get them out of the habit of desperately looking for reasons to get into the trade. The desire is always to be in a trade which inevitably results in overtrading. The assumption is that Pilots by nature avoid risk and therefore would trade less and be more selective on the trades they take.

    WHAT DID OUR STUDY FIND?

    This was clearly demonstrated in the volume of trades they took and the winning percentage relative to the control group.


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    If you would like to find out more about the Professional Trader Programme feel free to book a call with a member of the team HERE.