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Things I've read on the forums indicate that putting players on a Major League team in this game at 18 is a disaster, and they only develop properly if they move thru various Minor League levels like modern real-life players.
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When you're running a long-term historical league, players enter the draft in what would be their first major league season. So you really see two things:
a) Players who enter the league with major league-caliber ratings. Obviously,
some players were major league-ready at 18-19... more so in the early years than in the last century or so. You're fine with these guys -- age doesn't matter particularly. If they're good enough to play regularly, so just play them and they'll develop as they would normally.
b) Players who made their major-league debuts a few years too early, but eventually got good. (Related: pitchers who later switched to batting, or -- more rarely -- vice versa.) You'll want to leave those guys on the reserve roster -- if there's no minor leagues, they'll develop there.
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I see a setting called "disable development for draft eligible players". Is just ticking that adequate to create what I am looking for?
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This is the exact opposite of what you want. That's meant for single-season replay -- players won't develop at all if this is checked.
Really, the default settings should do what you want -- this is the main kind of game I play, running from 1871 to the modern era, and the only change I (sometimes) make is to switch "base pitcher stamina on" from "3-year period" to "entire career". (Whether or not you switch, the game will make somewhat arbitrary decisions about who is a potential starter and who is a reliever -- slightly different arbitrary decisions for each, though.)