The first thing I usually do is set up a global scouting network. I try to improve youth facilities etc as soon as possible to ensure that I have the greatest chance of getting talented players coming through.
My favorite part of this game is developing youngsters.
As far as the first team goes, I go for big name signings every once in a while. I like having stars in my team and it keeps the fans excited. I make sure that everyone I bring in, as well as those already here, have good personalities in order to tutor the next generation.
I get rid of the all reserves who I deem not good enough right away. The reserves will consist of my youth squad and whoever I didn't sell.
Once a player reaches 18 (17 if he's progressed enough), and his determination and personality are in good places, I usually will loan them out for next few seasons. At 21, 22 at the latest, I decide whether or not they are good enough to break into the first team. (Some players are easier to determine than others). They get occasional chances with the first team between loans and preseason etc.
I leave a spot on the bench for a youngster every match (7 spots on the bench is plenty so might as well). I'm pretty generous in choosing who gets that spot. I've played 16 yrs heck even a 15 yr old once.
Every month or so I schedule friendlies where I only play the youngsters. They almost certainly lose
I constantly throw them in the deep end and see if they sink or swim. If they swim? Wonderful. It means that I'll pay a little more attention to them. If they crumble under the pressure? Thats perfectly fine. I don't expect them to be world beaters at 17. I take it easy on them. Its a learning experience afterall. They need not worry as more opportunities will come.
When I deem that a youngster is ready for the first team, I'll keep the older player that he's replacing for a season or so (maybe longer if he that offers more than one thing to my side) just to see if the lad is able to adapt.
As you can see, I like give young players as much first team experience as humanly possible.
I like signing the big name player but I much prefer bringing one through my youth squad.
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