- Trading is a performance activity, much like sports, performing arts like dance. You have to find your niche, in other words a cross section of talent, skills and opportunities
- Build on your success and strengths. So many traders overlook their strengths instead they just try to correct their weaknesses. Once you have that, leverage it, scale it, trade more different stocks and more shares. You want to turn best trading into best practices and best strengths into habit patterns.
- Find your unique strengths. Brett told us a story about his blind cat Molly who was about to learn and navigate around a new environment after just about a day or two. Everybody has got something going for them.
Characteristics of Successful Trader
- High Conscientiousness: High discipline, responsible. They think about their day, think about their trading and think of trading as a craft.
- Low Neuroticism: Have a low tendency toward negativism. Blood literally flow out a certain part of your brain and you become in the "wrong mind."
- High Openness: Likes new experience, which correlate with risk taking. It's even better when you can take on lots of risk conscientiously.
- Problem-Focused Coping: When something goes wrong are you focused on the emotion or the problem. Brett mentioned about someone thinking of a losing trade as paying for information and testing out the market, which I thought was a really interesting way of looking at things b/c that's kind of like poker where sometimes you pay or call even though you know you're probably wrong to help you make more money in future hands.
Characteristics of Successful Trading Firms
- Sticking to Knitting
- Promote Teamwork
- Distribute Expertise
- Trader Support
- Hiring Expertise
Common Trading Problems
- Performance Anxiety - more concerned about the outcome than the process, which leads to poor decision making. It makes traders more risk averse to where they miss a trade or take too small of a size. You can't trade to not lose!
- Impulsivity - becoming frustrated, driven by anger and become reactive instead of grounded
- Failure to Adapt - either in trend or volatility. You have to continue to find new patterns but be aware that they change.
Undercontrolled vs. Overcontrolled Trading
- Most problems are control problems
- Impulsivity: the fear of missing moves and need for action. You have to think is your job to trade or to make money?
- Trader as ADHD: loss of focus and rule governance
- Hesitation: fear of sustaining loss, need for safety. Trader becomes anxious, self-focused attention and negative spiral. You need to focus on the MARKET instead!
Poor Trading Patterns Are State Dependent
- Behavior is patterned
- Patterns are associated w/ particular states of mind - most coaching won't work b/c you're not in the same state of mind any more. You need to coach while you're trading; work on performing while you're in performance
- States are evoked by triggers - the key is to figure out what riggers you and coach yourself to break the cycle and not get triggered, either during breaks or right b4 or after
- Guilt/Self Recrimination - I should have _____
- Boredom - it's easier to lose money than not trade
- Fatigue - we tend to over interpret things
- Physical Stimuli
The Importance of Well-Being
- Over time, not enough positive emotion can be just as damaging as too much negative
- You can have a lot of distress but still a good trader if you're extracting lots of positive out of the job
- Contentment is a big area for most people
- It's not just about minimizing stress but maximize well-being as well