Having a robust system or method for finding value, an appropriate philosophy to risk, a strong risk management practice, and a thorough understanding of markets are all prerequisites for success. However, it is the combination of these factors allied to a winning mindset, which is where great performance occurs. This is the secret to success in financial markets. The greats of trading all have it. Ray Dalio, Paul Tudor-Jones, Warren Buffett, Jim Simons.
Damian Hughes, one of the world’s leading experts on cultivating a high-performance mindset. Damian has worked with athletes, business leaders and sports-teams from around the world helping them cultivate the mindset for success in high performance environments. His list of clients includes multiple Olympic medal winners, world champion boxers, and leading sports team such as Barcelona, Manchester United and the Scotland Rugby Team.
Damian also works with high performance teams in organisations, he is a Professor of Organisational Psychology and Change at a leading British University and has written extensively about developing a 'Winning Mindset'.
In this episode we talk about mindset expansively and how it helps traders to improve performance. Some of the highlights in this episode include:
The importance of ‘Playing to Win’, as opposed to ‘Hoping to Win’, or ‘Playing to Not Lose’: The latter two commonly lead to people constantly flipping, changing and hedging their bets, whereas the former drives a vision and directs resources and energy to find ‘How to Win’, and then ‘Sets a path to victory’. Playing to win enables us to accept losing more easily, because it is accepted as a necessity on the path to winning. You can here an excerpt from the podcast about this here:
How those with a ‘Winning Mindset’ can articulate coherently why they are good: This is a characteristic of successful people and teams, who can then build upon this, and will therefore be comfortable avoiding situations when they do not have an edge.
‘The Dunning-Kruger Effect’: How the dangers of over-confidence and believing falsely or merely hoping you are good are potential cause of unrealistic expectations that set you up for failure.
How High-Performance individuals take responsibility rather than seek to excuse or blame: Damian talked about how mediocre coaches in sport have a mindset which often seek to absolve themselves of responsibility for bad outcomes. Whereas high performance coaches focus on what went wrong in the process.
The important of adopting a ‘Positive Psychology’ to counteract common mistakes. We are all vulnerable to personalising a situation, making these thoughts which undermine our confidence pervasive, and then creating permanence so we believe these. These beliefs, which may be coping strategies, are usually false and extremely unhelpful. It is important to counteract these.
How your strategy, technique or talent provide the opportunity, but your mindset allows you to take it. Damian shared a quote by Barcelona Director of Football Txiki Begiristain "Talent will always get you to the door of the dressing room, but mindset will take you in there, and will determine how long you remain there.”
The Importance of Preparing for All Outcomes Before You Start: There are only 3 possible outcomes to any action, win, lose or draw. By just focusing on winning, and being reluctant to focus on other outcomes, we are unprepared for the unexpected, and paradoxically increase our odds of ‘not winning’.
Stop Reading The News: Be more discerning on where you get your news and info from. Most news is unimportant but can take over our thinking and control us. This extends to social media.
Focusing on Process over Outcome: Assess whether the process was good, and the behaviours were appropriate. Focusing on results as a guide to future behaviour can mislead. Bad processes and luck produce good results sometimes.
Kanter’s Law and Self-Doubt: How in the middle of any project or action, you will always have a period of doubt and may look upon yourself (and feel) a failure. This can disrupt your momentum and ruin your execution of plans.
Owning the Situation Versus Being Owned By It: How we are all vulnerable to being controlled by the opponent, and how it is import to slow down and regain momentum at these times.
Using a Pre-Mortem: How pre-mortems can enable is to prepare for unwelcome outcomes. (Check out our recent episode with Gary Klein, about Pre-Mortems),
Having a Mental ‘Tripwire’: Having techniques or rituals which can enable us to shift mindset or mental states to suit the situation, and to protect ourselves from ourselves. A tripwire is a reminder to make or review a decision or take an action. In this part Damian talked about the band ‘Van Halen’ and their extraordinary M&Ms tripwire.
Trademark Behaviours and how ‘Success’ Leaves Clues: The importance of examining your performance and behaviours for the hidden behaviours which support your process and underscore your success. High performers have trademark behaviours which they can apply repeatedly, consistently and effectively.
Anyone Can Win Once or Twice, Great Performers Win Consistently Over Time: How great teams and performers cultivate a mindset which ensures they win time after time, again and again, rather than just occasionally.
Techniques to Shift Mindset: Damian talked about some steps you can take to start developing your mindset or to shift mindset to a more productive mindset.
Damian’s books include: ‘
• The Winning Mindset: What Sport Can Teach Us About Great Leadership.
• Liquid Thinking: Inspirational Lessons from the World's Great Achievers
• The Barcelona Way: How to Create a High-Performance Culture
Damian is co-host of the High-Performance Podcast with Jake Humphries of BT Sport.
Damian’s website is http://www.liquidthinker.com/
Damian also mentioned a book in the podcast called ‘Stop Reading the News’ by Rolf Dobelli
Episode Links:
🎧Buzzsprout
🎧Main Link
🎧iTunes
🎧Spotify
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
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.
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.
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