Oct

28

 We have all experience or witnessed the thing called beginner's luck in sports, games or other competitions. I will make a hypothesis that this is not luck at all, but a non-random effect. It may be like the home field advantage, which was never fully explained until recently. In beginner's luck what the player lacks in experience he more than makes up for in other attributes allowing him to compete better. It could be a higher performance mental state. Lacking experience the player also lacks other things like fear, disappointment and loss. Free of these, he is willing to take on more risk. He is not anchored to one belief system or set of rule. Rather he is quite flexible and adaptable to new conditions as they present themselves. Beginners see the world as children again, albeit all too briefly, and may find simple opportunities that a more experienced player would overlook. In a competition, an opponent could underestimate a beginner giving him an advantage and allowing him to play with less pressure to win. It would do well for a more experience players to understand what is behind beginner's luck and to find ways to either adopt or counter it.

Anatoly Veltman writes:

I experienced it first hand in spring of 1987. I've decided to make my first major trade by that time, because I spent several months eyeballing all available charts and was struck by an unmistakable basing pattern in Silver. I surveyed dozens of veteran Silver traders around COMEX - and none of them would get excited at that particular junction. They all got burned, some less and some totally, in the course of the preceding 6 years worth of price action in Silver - and that seemed to convince them that Silver can never again master a sustainable rally.

Well, as my beginner's luck would have it: I started accumulating as much as I could over 30 consecutive trading days from 50k of initial margin money, and by April 27 I already owned hundreds of lots, worth over a million! But on that one day - easy come easy go - Silver rolled back from $11.25 to $7.50, leaving me with barely positive equity and a single lot for memory keep-sake! So, admittedly, the old wolves did end up skinning me: during that one unprecedented futures session, which flipped all futures months from limit-up to limit-down lock - only they knew how to execute in the Spot month of un-traditional April futures and front run (via switches) all outside would-be sellers, none of whom got to sell anything that day! And by next day the April contract was not just spot delivery - it didn't even exist!! That one trading session proved too arcane for any amateur futures trader, and the Exchange insiders fully capitalized. Just like in their good ole times of the famed January 1980! 


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  1. Edward Lam on October 28, 2013 4:38 am

    I’ve also observed in sport and board games a) the opponent often is ’soft’ or easy initially and don’t start with their ‘A’ game, because they don’t expect a hard game b) the opponent may not have a strategy for winning against a simple but unusual style (and there will be some issues with over compensation before the rhythm is hit).

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