Adam Nash: The Podcast Interview - 3 Decades of Successful Trading

The AlphaMind Podcast 

The goal of the AlphaMind Podcast is to help you think, reflect, and better understand the mindsets of those who have achieved success in the field of trading and investment. 

We look at trading through lively discussions with traders, psychologists, analysts, brokers, coaches, mentors and thinkers in the field of human performance. In doing so, we seek to shed light on how people master the mindsets needed to navigate the volatile, uncertain, complex and ambiguous worlds of financial markets. 

Alpha is a term for the excess profits and returns generated for a certain level of risk in financial markets. An Alphamind is an optimal mindset that gives people an edge in the extremely challenging task of generating excess Alpha. By listening to the in-depth and engaging conversations we have with experts and professionals from across the field, you can learn how to start moving towards creating and improving your own Alphamind. 

Episode 8 The Adam Nash Interview.

Over nearly 3 decades in the financial markets, Adam has been there, seen it, done it, taken the punches, dodged the bullets, yet managed to remain humble and strong.

In that time Adam has achieved great success; Initially learning the basics as bank trader, then being mentored by outstanding traders in the futures pits, and finally flourishing as a screen trader when the futures pits closed. At one stage Adam was the 3rd largest trader by volume in the Euribor Futures contracts. 

In this lively interview Adam shares his views on the mental and psychological challenges needed to succeed in trading. He reveals the 3 things he knows now that he wished he had known at the start of his trading career. He discusses the mistakes he sees other traders make, and why so many of them fail to make it from 'boot camp', to 'base camp'. He explains the significance of recognising and understanding the market narrative, and the importance of timing. He explains why it is so vital to keep your ego in-check, and how the market will take you apart if you don't.

Adam has managed to trade through many different and altered market climates, and has faced up to the rise of the trading algoes. To stay at the top of your game for so long and to survive requires a great ability to adapt to changing conditions and new environments. Adam discusses the importance of being adaptable and willing to accept that conditions and markets change, and that you need to change with them to stay on top. 

There is so much richness and depth to this interview. Whether you are a new trader just at the start of your career, or a seasoned trader with a long career behind you, Adam's thoughts and perspectives will provide you with a wealth of insights and wisdom which will enrich you as a person and a trader. 

For me, personally, I have known Adam for over 30 years. We worked together briefly on a trading floor in the 1980s, and since then I have had coaching conversations with him and have coached those who have worked for him. The one thing that has always stood out for me was Adam's humility. He has remained humble and grounded throughout his career. He is the same person now that he was over 30 years ago when he worked in the middle office of a Japanese bank in London. Adam is someone who is 'confident in his own skin' but never arrogant or too sure of himself, a quality which I see in many great traders, and which comes through clearly in this interview. 

To listen to the Adam Nash interview go to:
iTunes link here
Spotify link here
Google link here

Future AlphaMind podcasts. 

Please be sure to subscribe to make sure you do not miss any future episodes. In the coming weeks we have outstanding interviews coming out with:
  
Garth Friesen: Garth is one of the world’s top Hedge Fund managers. Garth is CEO of III capital, a $6 billion fund based in the US. Garth has documented his journey into trading in his brilliant book 'Bite the Ass off a Bear'. He has also served on the Fed Advisory Committee on Markets with some of the great names of Financial Markets.

Brett Steenbarger: Brett is the world's leading authority on the Psychology of Traders. He is a qualified psychologist, a clinical associate professor in the department of psychiatry and behavioral sciences at the State University of New York, and has written many great books on the psychology of traders. In a distinguished career, Brett has worked with some of the world's top traders. In this interview he shares his thoughts on what is needed to succeed in trading, discusses some of the spiritual aspects of trading, and reveals a new book he has written which he is publishing free as a resource for traders at all levels.

Clive Lambert: Clive is one of the world's leading and most respected Technical Analysts. Clive has worked with and around traders all his life, starting his career as broker on the London futures markets. Clive brings a different dimension to the podcast, shedding a light on how best to read markets and price action, and sharing his views on what those who are most successfully able to integrate technical analysis into their work, do differently.
  
Please also check out our previous episodes. In particular I highly recommend a brilliant interview with FX Trader Mark Hutchinson. this contains a depth of richness and wisdom on a par with Adam's great interview. Click here to hear this episode.

To subscribe and access previous episodes, go to iTunes here

About AlphaMind

AlphaMind is a joint venture between Steven Goldstein of AlphaRCubed and Mark Randall of the Mark Randall Consultancy

AlphaRCubed offers Trading & Investing Growth Performance and Development Services for private individuals and businesses involved in trading and investing activities. Underlying their approach is the idea that Traders face a battle with the market & a battle with their self. Their coaching helps traders to win the battle with their self. You can learn more about AlphaRCubed in their electronic brochure here, or via their website. 

Mark Randall Consultancy offers Mindfulness based trading and coaching to people and businesses involved in Trading & Investing and beyond in the wider corporate space. MRC's unique and powerful outcome driven approach is aligned to the US Special Forces “Ultimate Warrior” Mindfitness training programme and is applied to the corporate workspace.

Subscribe to the upcoming 'AlphaMind' Newsletter at this link.

Join the AlphaMind Linkedin Group.

Follow us on Twitter and Instagram

Ego and Trading: A True Trading Horror Story.

The following is a true story, the re-telling of which was inspired by an old coaching client of mine. He is happy with me sharing this story, as with the passing of time, he ‘despairingly’ laughs about it now.

The Trade from Hell.

The client was an FX trader at a Bank. He had taken a long intraday EURUSD position on the morning of an ECB meeting. The position was in EURUSD 5 million. This is not particularly a large position within the bank he worked at, however with the extreme volatility risk ahead of this event, this size had a different risk meaning.

The EURUSD market moved sharply higher following the ECB announcement. The trader gave a small fist pump. He really should have known better, fist-pumping is a heinous trading crime usually followed by the market gods playing a cruel trick, this time proved to be no exception. 

A sales guys on the next desk picked up on this and shouted over ‘well done sunshine, how much you got on?’ - Sheepishly the trader answered "5 Euros". 

The guy on the sales desk was a notorious chiseler. "Is that it? 5 Euros, Billy Big Bollocks eh!" (A city phrase used as a putdown. - Trading rooms can be unforgiving places.) 

My usually disciplined client was disturbed by this. - The client could and should have shrugged this off, but for some reason in this occasion he was triggered. His feelings now betrayed him. Intending to show this salesperson, he decided to add another 5 million Euro. (I'm guessing you can see where this is going!!) 

At that point, and exactly at that point, a wave of post-ECB meeting profit-taking hit the market. (You knew is was coming). Crash! stops went off and the EURUSD dived. (This was around the time of the Greek crisis, with intraday moves far larger than they are now). 

From being 70 pips up on 5 Euros, he was now 50 pips offside on 5 Euros and 120 pips offside on the other 5. He went from up $35k, to down $85k in a flash. 

The market had not hit his stop-loss level on the first EUR 5. But on the second 5 Euros, and thus the whole 10, he had absolutely no plan, no stop, no get-out. He had gone 'off-piste', had no plan or contingencies in place and was now gripped by fear. In a panic he decided to exit the whole position before it rapidly became a 6 figure loss. (I think you can guess what happened next!) 

With stops flushed out, the market quickly turned back up. Within a short space of time it had recovered the 120 pips. 

By the end of the day, he would have been up about 120 pips on the first 5. His end of day profit, had he stayed with the first 5 and not acted impulsively, would have been $60k. Instead he had booked an $85k loss. 

Now to compound matters. At the end of the day, the sales guy who had given him a hard time, walked past him, gave him a pat on the back, and said, "well done, looks as if you had a good day!". - He assumed he was still long, he had no idea that the trader had cut at the low of the day. 

After this humiliation. The trader told me he could not face seeing anyone on the train on the way home, nor seeing the happy faces of his children as walked in the door. Thus, he opted to walk the 10 miles home. By the time he had walked in his children would be in bed. 

"Let him who is without sin cast the first stone." 

The Morals of This Story

I doubt there is a trader out there who cannot empathise with this story in some way. There are so many aspects in this tale for traders to mull over. But there are a couple of points I want to emphasise and make explicit.

Ego and Other People

We are all impacted by other people, both those visibly people around us, and those invisible to us who occupy space inside our head. I include in these, the twitter idiots, the voices from our past, such as the teacher or parent who said 'you'd amount to nothing', or perhaps those from your social circle whose toast always seem to land 'butter side-up'.

People and events can spark feelings, often from unconscious memories, which trigger us. These feelings force our Ego's hand with the aim of protecting us (The Ego has good intentions, it is indeed a strange beast). Those feelings, may be fleeting, but they can often echo sentiments which make us feel shame, humiliation, worthlessness, and other painful emotions.

The ego doesn't arrive subtly, oh no! The ego comes charging in like a 10 ton Elephant. And when it does, it is not easy to stop. - 'I will show them' it says, not remotely aware that the 'them' it refers to, are not around, and even if they are, they don't give a flying f-ck about you really. The 'Ego' has now taken control of the levers of your decision-making. By then the 'Car Crash' is starting to happen.

This trader had been trading for over 10 years. but 'ego hijack' is no respecter of rank, age or experience. No person is immune from the impact of Ego, it it too well established in our evolutionary operating system to be able to bypass. In my work coaching traders for the past 10 years, and my previous 25 years as a trader, I have witnessed the trail of destruction ego causes. It impacts the retail trader right through to the world's leading Hedge Fund managers. Its taken global Hedge Funds and even entire Investment Banks down!

[The impact of Ego on trading was explored in this article: A Trader's Ego - The Ultimate Battle. - read the full article here ]

Coming back to the story

The impact on this trader was stifling. The loss itself was manageable, but it was not the size of the loss that was the problem, it was the manner of the loss which hit him hard.

He was unable to trade at all on the Friday, and the weekend was a blur. But he reflected, he contemplated, and he wrote his thoughts in his trading journal. This last act helping him get closure and he was back fresh on the Monday.

The 'Happy Ending'.

This individual was an exceptional trader, and this proved to be just a small blip on his trading journey. All traders have these setbacks, but the best are able to quickly put a line under them, to 'Let Go', get 'Metal Closure' and move on. This trader went on to become Global Head of FX at a major investment bank.

The AlphaMind Podcast

The AlphaMind podcast is co-hosted by Steven Goldstein and Mark Randall, market veterans with over seven decades between them in the financial markets. The podcast delves into the lives and stories of extraordinary guests whose experiences provide a fresh and powerful lens through which to understand the mental, emotional, psychological and behavioural challenges people face when encountering risk and uncertainty in financial markets. To find out more visit the AlphaMind podcast website. The AlphaMind Podcast is produced in partnership with 'The Society of Technical Analysts'.

The AlphaMind Trader Performance Coaching Programme

Our powerful Trader Performance Coaching Programme focuses on helping people develop and improve the key risk skills, abilities and mindsets which contribute to trading performance mastery.

This programme makes use of our unique and powerful ‘Human Alpha Performance Model’ which helps illuminate the human aspects of the risk process as people navigate their way through the Financial Markets. The model helps people make sense of their behaviours when taking and managing risk in the financial markets, whilst the coaching helps people to make key changes and adjustments which drives growth in risk capability and personal performance.

This programme has been delivered over the past 10 years to people at many of the world’s leading trading and investment firms.

Click here to find our more about the programme, or email info@alpharcubed.com.

AlphaMind partner with AlphaRCubed to deliver the Coaching Programme. - AlphaRCubed provide a suite of Training, Development and Coaching programmes aimed at Trading and Investment businesses. View their flip brochure here to find out more about their work.

The AlphaMind Project and Newsletter

The AlphaMind project is a collaboration between AlphaRCubed Ltd and the Mark Randall Consultancy. Its aim is to explore, understand, educate and inform about the key factors which lead to successful trading and investment performance at the human level.

We work with many businesses in the Trading and Investment Industry to help them and their people improve their 'Risk Capability'. Our clients are some of the leaders in the trading world, including names such as Bank of America, Cargill, RBS, Balyasny Asset Management amongst many others. If you would be interested to know more about us and how we could help your business. Please email steven.goldstein@alpharcubed.com. 

We will shortly be publishing a regular Newsletter. If you would like to add your name to the Newsletter subscription list, then just sign up at this Newsletter link. 

Trading: It's the Process, Stupid.

In an article called ‘Ordinary People Focus on the Outcome. Extraordinary People Focus on the Process.’ the story is told of actor Bryan Cranston of 'Breaking Bad' fame. 

The article talks about the lessons he learned that helped him go from being an average actor to becoming an extraordinary one.

Cranston wrote how he was inspired by a mentor to focus on 'the process' rather than trying to win auditions. Until then his emphasis was purely on winning, and at this point he was winning mostly small bit-part roles.

The mindset shift which resulted in a 'process orientation' was subtle. He started focusing on what he needed to do to win, rather than focusing on winning itself. 

This shift led to Cranston starting to land bigger roles, and eventually the career defining roles which has made him one of the world’s most sought-after actors.

Trading - Extraordinary Performance comes from a ‘Process Focus’, not a ‘Results Focus’. 

As a coach I work with many traders. Occasionally I come across someone I categorise as truly exceptional. One such trader is an individual in a fund who I have worked with for a couple of years now.

This individual is completely 'process focused'. He is not driven by winning or by his results, but by developing, refining and sharpening his process.

Winning is important to him, but not nearly as important as doing the things that enable him to win. 

He does not consider a loss as a failure if the process was right. For him, failure is defined by whether he considers his process was good and whether he stayed true to his principles. 

Likewise, he does not view winning necessarily as a sign of success unless it was true to his process. He checks all his wins to ensure he was on process. 

This is a defining characteristic of the process focused.

By contrast, the 'results focused' define success by the outcome. The danger of this is that in a world where the outcome owes a lot to luck and randomness, traders can end up relying on flawed processes. 

Experienced Traders Know This, New Traders Need to Learn This.

This week, myself and co-host Mark Randall, interviewed two outstanding traders for our podcast series, the AlphaMind podcast. 

The guests were Mark Hutchinson, an outstanding young trader with 10 years behind him, who has set-up a very impressive trader mentoring business called 'FalconFX'. 

The other interview guest was Garth Friesen. Friesen is CEO and a portfolio manager at $6billion hedge fund, III Capital Management. 

Friesen was also part of the Fed Investor Advisory Committee on Financial Markets. This group included the likes of David Tepper, Mohammad El-Erian, Louis Bacon, Alan Howard and other luminaries from the top table of the world’s financial markets.

Both Mark and Garth referred to the importance of learning and developing process and having a process focus. They referred in particular to the crucial ‘early years’.

The message was that in the early years too many traders are concerned to make money, rather than learning and developing their abilities. 

Like all skills, trading takes years to learn and develop to a high degree of capability. Naturally, everyone wants to make money, and usually quickly, but trading is a skill which needs to be learned and cultivated over time. 

If we compare it to sport suhc as tennis, One would not expect to start playing tennis today, and then appear at Wimbledon tomorrow, next week, next month or even next year. Yet for some reason, people think this doesn’t apply to them and trading. That may seem far-fetched as an analogy. It is not.

In trading, you do not know who you are up against. When you step into the market whether its day 1 or day 10,001, you are potentially up against anyone and everyone. And that includes the very best. The is no other field of performance where that happens.

The interviews with the two guests will be released in a few weeks’ time, I'd highly recommend subscribing now, as the quality, insights and perspectives on the Mindset aspects of trading were exceptional. You can subscribe at iTunes by clicking on the advert below. 

Process, Process, Process. - It's the process stupid.

Many of the most successful traders around, owe their success to this 'process orientation'. 

If the process is right, then good outcomes should follow eventually. If the process is not right, then you are relying to a high degree on luck.

It's the process stupid.

Article by Steven Goldstein 

Steven Goldstein is a Performance, Team and Executive Coach who focuses on Risk and Financial Markets people and businesses.

Core to Steven's work is the belief that everyone has the potential, often latent or hidden within them, to surpass where they are now and to grow into what they want to be. His work as a coach helps people to rediscover that potential, to recognise it, to value it, and to leverage it to be better, happier, and more productive.

Prior to becoming a coach Steven worked for more than 20 years as a Rates and FX trader at some of the world’s leading investment banks. See Steven's Full Profile.

If you are curious about how Steven could help you or your business, please email him at info@alpharcubed.com. or call +44 (0)7753 446097. To know more about the work of AlphaRCubed and their broader performance and growth development services, please view their brochure at this link. .

Click here to follow Steven Goldstein on Twitter or here to join his open Linkedin Group.

About AlphaMind

AlphaMind is a joint venture between AlphaRCubed and the Mark Randall Consultancy which seeks to help people develop and cultivate optimum mindsets (An Alpha Mindset) for trading and investing success. We offer workshops, group development programmes, and one-to-one coaching to people and individuals in Financial & Commodity Markets

AlphaRCubed offers Trading & Investing Growth Performance and Development Services for private indivudals and businesses involved in trading and investing activities. You can learn more about AlphaRCubed in their electronic brochure here, or via their website. The

Mark Randall Consultancy offers Mindfulness based trading and coaching to people and businesses involved in Trading & Investing and beyond in the wider corporate space. MRC's unique and powerful outcome driven approach is aligned to the US Special Forces “Ultimate Warrior” Mindfitness training programme and is applied to the corporate workspace.

Subscribe to the upcoming 'AlphaMind' Newsletter at this link.

Join the AlphaMind Linkedin Group. 

Follow us on Twitter and Instagram .

Why Successful Traders are Masters of the ‘Best Guess’.

During a conversation with a coaching client, the client remarked to me that 'He could not see any logic or rationality in anything in the market'. 

I explained that the logic we apply to the market is rarely fully formed or complete. By the time a complete and fully formed logical explanation is available, the market has moved to discount it. In the absence of that we have to try and make a 'best guess'. 

The problem with best guesses of course is that they are based on extremely limited information and lead to dubious logic. 

This was illustrated last month in some comments I saw from news reports after the May Non-Farm Payroll release. 

The figure released showed an increase of just 75,000 against an expected a gain of 180,000. Immediately the S&P Futures dropped 7 points. 

Financial news reporters always have to have a story, and thus the first news report stated: 'Disappointing payroll data had seen US stocks drop on economic concerns.' 

However within an hour the drop had been fully reversed and the future were surging. A new headline then read: 'Disappointing payroll data sees US stocks rally as likelihood of rate cuts increase.'

Often the story fits what we observe rather than the other way around. This may be a news story, but the mental processes a trader goes through are nonetheless the same.

Thus, what is a trader to do if they rely on logic in these situations? A trader has to make choices.

This is challenging for many new to the game. That is not how they have been educated. Their education systems tells them, 'get all information, gather the facts, make an informed choice'. 

But in markets, how can you make an informed choice when all the information is not present and certainty is impossible?

You may get situations which have a high degree of certainty, but, the problem then is the risk reward pay-off is very low. On the contrary the high risk-reward scenarios come with a very low degree of certainty. This simple concept is demonstrated by a typical risk/reward versus degree of certainty graph as shown below.

The Human Mind and Best Guessing.

Ultimately the job of the trader, or the speculator, is to take 'best guesses'.

Making a best guess is challenging as the human mind dislikes incomplete pictures made from a few basic focal points and thus seeks to complete the picture based on previous experiences of similar situations or images. 

Our minds seek extra information to complete an incomplete picture. Unfortunately, in markets, time is not on your side. What the mind therefore does, is fill in the gaps to allow us to make the best sense of what we can with the information we have.

The danger is this can undermine our vision and our perception can become distorted. The narrative may be correct, or it may represent a logic based on a false premise used to justify a ‘feeling’ based decision, or a decision not necessarily based off clear logic (Which abstractions often are).

I confided in my client that when I was a trader, this happened to me on many occasions, and sometimes could seriously undermine my trading. I shared an example with him from my own trading.

Bizarrely the example I shared with him was one that turned out to be a very successful trade.

The rationale for the trade was based on a technical set-up, however once the trade was in motion, I started to develop a fundamental narrative which fitted with what was happening in the market. In a similar way to the payroll example above. 

The logic-based narrative, which I constructed, based on a macro-economic fundamental case, turned out to be completely wrong. Fortunately, it did not matter, as the technical aspect of the trade had been executed perfectly and proved extremely successful. But it did distort my subsequent behaviour. Rather than looking objectively at the market, which was now ripe for a reversal, I had convinced myself it was moving higher. I did not lose any money on this, but I did miss a great opportunity. Trading failure, is not always losing money, it can be failing to make money when your system, method or process identifies value producing opportunities. 

The discussion with my client continued and my client raised the famous trading mantra; - ‘Trade What You See, Not What You Think You See’.

The challenge in markets is that 'what we see' rarely is a true and complete image. Instead it is a pieced together image based on templates from experience. This is how the brain works.

Optical illusions provide good examples of this:

In the image below, the squares marked A and B are identical in colour and shade. However, your brain is not seeing this because it expects something different given the checkerboard pattern and the shadow cast by the green cylinder. 

No matter how hard you stare at them, whilst they remain in this format, your brain will not allow you to see the truth.

You may wish to go to this link explains this.

Alternatively check out this excellent YouTube video demonstrating this. 

Another excellent example, which I think provides a better metaphor for markets, is this image: 

Markets rarely allow us to see a clear and logically constructed picture. There are just too many variables, different views and varying possibilities. We are therefore left making ‘best guesses’, whether we like it or not.

The Job of a Trader is to Master Guessing.

Thus, the job of any trader is to become the 'Master of the Best Guess’. 

It is for that reason they need to have checks on their behaviours, on their optimism and pessimism, on their arrogance and their levels of confidence.

That is why they need processes and structure to their trading, their analysis, their trade management, and their self. 

That is why trading is more art than it is science. The art of trading was wonderfully defined by another client who said: 

‘The Art of Trading is learning to sit around and do nothing, when everything in your mind screams at you to do something, balanced with having the guts to do something when everything in your mind screams at you to do nothing.’

Wrap-Up 

We cannot help ourselves as humans in applying logic and rationalisations to fill gaps in data or to try to explain data or events, that is how we roll. 

This is why the concept and idea of developing an 'Alpha Mindset', a mindset geared towards the production of Alpha, is so vital for traders and investors. 

The starting point for that is understanding your 'self', then learning to manage your 'self', and then learning to master your 'self'. 

This means understanding the basic drivers of your decision-making, behaviours and action. Developing an understanding of who you are, both from a 'first-' and ‘third-' person perspective, and being conscious of how your evolving and emerging situations impact what you do and how you are. 

As you become more self-aware, so you should be able to start capturing the upside of your capabilities more effectively, and limiting the downside which results from some of the negative aspects of how you function. 

This will enable you to develop the skills need to ‘Guess’ more successfully, and thus move you towards becoming a 'Master of the Best Guess’. 

Article by Steven Goldstein

Steven Goldstein is a Performance, Team and Executive Coach who focuses on helping improve the 'mindset' aspects of Risk and Financial Markets' people and businesses.

Core to Steven's work is the belief that everyone has the potential, often latent or hidden within them, to surpass where they are and to grow into what they want to be. He views trading as two concurrent battles, one a person has with the markets and one they have with their self. To succeed a person must win both. As a coach, Steven works predominantly on helping his clients win the battle with their self.  

Prior to becoming a coach Steven worked for more than 20 years as a Rates and FX trader at some of the world’s leading investment banks. See Steven's Full Profile.

If you are curious about how Steven could help you or your business, please email him at info@alpharcubed.com. or call +44 (0)7753 446097. 

To know more about the work of AlphaRCubed and their broader performance and growth development services, please view their brochure at this link, or by clicking on the advert below. 

About AlphaMind

AlphaMind is a joint venture between AlphaRCubed and the Mark Randall Consultancy which seeks to help people develop and cultivate optimum mindsets (An Alpha Mindset) for trading and investing success. We offer workshops, group development programmes, and one-to-one coaching to people and individuals in Financial & Commodity Markets

AlphaRCubed offers Trading & Investing Growth Performance and Development Services for private indivudals and businesses involved in trading and investing activities. You can learn more about AlphaRCubed in their electronic brochure here, or via their website. The

Mark Randall Consultancy offers Mindfulness based trading and coaching to people and businesses involved in Trading & Investing and beyond in the wider corporate space. MRC's unique and powerful outcome driven approach is aligned to the US Special Forces “Ultimate Warrior” Mindfitness training programme and is applied to the corporate workspace.

Subscribe to the upcoming 'AlphaMind' Newsletter at this link.

Join the AlphaMind Linkedin Group.

Follow us on Twitter and Instagram

AlphaMind Podcast Ep 5 - Interview with Trader Mindset Coach and Former Trader Steven Goldstein

Inner Game performance coach and former trader Steven Goldstein is interviewed by the podcast Co-Host Mark Randall

Podcast Clip 

Click here to hear the full episode on iTunes. Or listen below on Buzzsport. 

To hear earlier eposides click the advert below:

In this podcast Steven shares his journey from his early days Trading Rates and FX in a Japanese banks in London in the mid-80s, to his time working on the proprietary trading desk at Credit Suisse and later Commerzbank and American Express, before opting to start a career as a Performance Coach working with Traders & Investment Professionals.

Steven shares his philosophy on how he helps traders to break past the self-imposed barriers we put which hold us back.

In this interview Steven discusses:

• How coaching had helped him make a mid-career leap in trading performance.
• What is ‘Inner Game’ performance coaching.
• How does it differ from conventional forms of coaching?
• How Non-Directive coaching powers performance.
• Working with teams
• How the more successful traders are more likely to ask for coaching.
• Coaching as a tool to develop Growth Mindset.
• Understanding the Systemic context of traders.
• The limits of learning trading Psychology, versus working in your own personal Psychology.
• How he helped traders recover from negative mindsets.
• How Relationships, Belonging, Ego.
• Why Mindset is everything and developing and Mindset for Alpha is vital.
• Lessons from sports. – British cycling and micro improvements.
• Embracing the complex.

To know more contact Steven – steven.goldstein@alpharcubed.com

Jesse Livermore's Trading Mindset Pearls of Wisdom

I recently published a list of what I consider the best books for the development of Trader Mindset. Of the all books on the list, the book which had the most favourable responses was ‘Reminiscences of a Stock Operator’. It is testament to the enduring popularity of this book that almost a century after it was written its popularity remains undiminished. 

The book is full of such valuable insights and treasured nuggets, some of which have passed down into trading folklore.

This article is a collection of some of the quotes related to trading mindset rather than trading actions. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #1 Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #2 People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #3 One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #4 There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #5 It was never my thinking that made the big money for me, it always was sitting, got that, sitting tight. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #6 The human side of every person is the greatest enemy of the average investor or speculator. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #7 Wishful thinking must be banished.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #8 Markets are never wrong - opinions often are. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #9 Big Movements Take time to Develop

Jesse Livermore’s Trading Mindset Pearls of Wisdom #10 It is not good to be too curious about all the reasons behind price movements.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #11 It is much easier to watch a few than many.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #12 Patterns repeat, because human nature hasn’t changed for thousands of year

Jesse Livermore’s Trading Mindset Pearls of Wisdom #13 The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.  

Jesse Livermore’s Trading Mindset Pearls of Wisdom #14 The study of the psychology of speculators is as valuable as it ever was. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared: "The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.".

Jesse Livermore’s Trading Mindset Pearls of Wisdom #15 I am carrying so much cotton that I can't sleep thinking about it. It is wearing me out. What can I do? Sell down to the sleeping point, answered the friend.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #16 I don’t know whether I make myself plain, but I never lose my temper over the stock market. I never argue with the tape. Getting sore at the market doesn’t get you anywhere.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #17 He must fear that his loss may develop into a much bigger loss and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #18 It is what people actually did in the stock market that counted, not what they actually said they were going to do.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #19 A man must know himself thoroughly if he is going to make a good job our of trading

Jesse Livermore’s Trading Mindset Pearls of Wisdom #20 No trading rules will deliver a profit 100 percent of the time.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #21 Don’t become an involuntary investor by holding onto stocks whose price has fallen. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #22 A man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #23 Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #24 Few people ever make money on tips. Beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #25 A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #26 I owe my early success as a trader… not to brains or knowledge, because my mind was untrained and my ignorance was colossal. The game taught me the game. And it didn’t spare the rod while teaching. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #27 If the unusual never happened there would be no difference in people and then there wouldn’t be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds. It’s the guessing that develops a man’s brain power. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #28 They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #29 If I learned all this so slowly it was because I learned by my mistakes, and some time always elapses between making a mistake and realizing it, and more time between realizing it and exactly determining it. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #29 I was utterly free of speculative prejudices. The bear side doesn’t appeal to me any more than the bull side, or vice versa. My one steadfast prejudice is against being wrong. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #30 It isn’t a hunch but the subconscious mind, which is the creative mind, at work. That is the mind which makes artists do things without their knowing how they came to do them. Perhaps with me it was the cumulative effect of a lot of little things individually insignificant but collectively powerful. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #31 I never argue with the tape. To be angry at the market because it unexpectedly or even illogically goes against you is like getting mad at your lungs because you have pneumonia. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #32 If a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of the ten thousand brothers or cousins of the original. The Mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #33 A man has to guard against many things, and most of all against himself—that is, against human nature. That is the reason why I say that the man who is right always has two forces working in his favor—basic conditions and the men who are wrong.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #34 The average speculator has arrayed against him his own nature. The weaknesses that all men are prone to are fatal to success in speculation. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #35 The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #36 A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #37 The training of a stock trader is like a medical education. The physician has to spend long years learning anatomy, physiology, materia medica and collateral subjects by the dozen. He learns the theory and then proceeds to devote his life to the practice. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #38 An old broker once said to me: “If I am walking along a railroad track and I see a train coming toward me at sixty miles an hour, do I keep walking on the ties? Friend, I side-step. And I do not even pat myself on the back for being so wise and prudent.” 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #39 Observation, experience, memory and mathematics—these are what the successful trader must depend on. … He must bet always on probabilities—that is, try to anticipate them. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #40 There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No many can always have adequate reasons for buying and selling stocks daily – or sufficient knowledge to make his play an intelligent play.

Article by Steven Goldstein

Steven Goldstein is a Performance, Team and Executive Coach who focuses on helping improve the 'mindset' aspects of Risk and Financial Markets' people and businesses.

Core to Steven's work is the belief that everyone has the potential, often latent or hidden within them, to surpass where they are and to grow into what they want to be. He views trading as two concurrent battles a person engages in; one with the markets and one with their self. To succeed a person must win both. As a coach, Steven works predominantly on helping his clients win the battle with their self.    

Prior to becoming a coach Steven worked for more than 20 years as a Rates and FX trader at some of the world’s leading investment banks. See Steven's Full Profile.

If you are curious about how Steven could help you or your business, please email him at info@alpharcubed.com. or call +44 (0)7753 446097. 

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