‘We’re Blind to Our Blindness’: The Power of Self-Awareness in Trading.

‘We’re blind to our blindness’ is a quote by Daniel Kahneman from an interview back in 2011. This quote reveals much about the human condition which reveals itself in the realities of a person’s work as a trader or investor.

Trading Problems as Symptom not Cause

When I meet new trading and investing clients who are keen to develop and improve their performance, I ask them ‘what aspects of their work is holding them back?’.

Their answers typically involve a list of behaviours such as fears, being too emotional, stubbornness, irrationality, lack of discipline, impatience and a host of other behaviours.

“If only I could get past my ‘Fear of Missing Out’ ”, is a common type of response I hear.

The difficulty with ‘identifiable behaviours’ is that often they are not the cause of people’s problems but instead the symptoms of challenges which lay far deeper. Typically, the cause of problems resides well beneath the level of consciousness. ‘Out of sight and out of mind’. – These are the blindness that people are blind to.

As an analogy consider a tree: What you see are the visible aspects of the tree.

This is not however the full tree. The tree's root system is out of sight. This root system has a huge impact on the growth of the tree, but is not visible.

Even then that is not the full picture. The tree doesn't exist on its own in a vacuum: Stand back further and the complexity grows. 

The trees health and wellbeing is impacted by environment, its interaction with other trees and their root symptoms, climactic condition, weather events, quality of soil, nature; plants and animals which live off and interact with the tree.

Behaviours as symptoms are merely presenting factors of far deeper causes and factors both inherent and relational.  

Behaviour as Symptom: Consequences of trying to fix symptoms.

There are so many unseen and unknown factors which are subtly pulling the strings on our decision-making when trading and investing. This is what makes the job of trading so difficult. 

The ‘behaviour as symptom’ issue is however more damaging than merely mislabelling. Once the problem is incorrectly labelled, it is then compounded by trying to self-fix symptoms.

In medicine, problems are resolved not by fixing symptoms, but by attacking causes. The symptoms may disappear for a while, but the cause of future problems remain deeply entrenched.

In trading, failure to correctly attend to the causes of issues eventually impacts confidence. A person's self-belief starts to erode and self-doubt slowly increases.

Self-Awareness, Reflection, Standing back.

  

Trading does not occur in a vacuum. Traders sit within a complex web of relationships, both work and personal.

The job itself involves encountering uncertain and extremely complex situations whilst trying to find a path through the complexity of financial markets.

At the core of this is the individual themselves trying to fight their own ego. Their ego seeks to preserve feelings of self-worth and personal identity which have been forged throughout their life. The ego has been further re-enforced by its own efforts to preserve itself.  

Preservation of self, through the distorting lens of ego, is one of the greatest inhibiters to trading success. Faced with this, people are limited in their ability to perceive a true and realistic picture.

Everyone who trades or invests faces behavioural challenges. Those best equipped to deal with the behavioural challenges are the ones most likely to ultimately succeed.

It is said often of people such as Warren Buffett, Ray Dalio, Paul Tudor-Jones, that their ‘Intellectually Honesty’ is their greatest gift.

I see the same in many exceptional traders I have worked with. These people recognise their flaws, fully own their mistakes and errors, and see the emerging pictures that bit more clearly.

These traders are always curious, never accepting that they have the answers. They constantly ask questions and challenge their own, as well as others, ideas and perceptions.

With some outstanding traders I have recognised a trait called ‘Egolessness’. This is managing the ego in a way which captures its best aspects and downplays its worst.  

We must learn ‘how to be’, to be better than we currently are.

'Behavioural Trading' is something I talk about and write about often. When I coach individuals I am often working on helping them develop their 'behavioural trading' aspects. 'Behavioural Trading' is about coming to terms with how one really is and helping to shape an approach to trading around that reality.

Returning to the Daniel Kahneman quote, the full quote is even more revealing than the short excerpt: “We're blind to our blindness. We have verylittle idea of how little we know. We're not designed to”.

Your job as a trader, investment professional, or a manager, will be greatly helped by becoming a little less blind, and working to counteract some of our 'metaphorical' design flaws as humans. It is not just the market you have to overcome, it is also yourself. 

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, here to follow Steven on Instagram, or here to join his open Linkedin Group.

Tune-in to the new AlphaMind podcast. 

Market veterans Steven Goldstein & Mark Randall plus the occasional guest, discuss the mental, behavioural & mindset aspects of Trading & Investing Performance. 

Hit these links to Listen or Download on  iTunes or Buzzsprout.

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.

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WHAT IS BEHAVIOURAL TRADING ?

Behavioural Trading: Turning the Behavioural Spotlight on Yourself.

If you think being given the trading strategies of the best traders in the world, or a signal system which tells you where to buy and sell will make you a successful trader, then I am afraid you have not yet worked out what trading is!

Behavioural trading is the idea that success comes not from knowing where or what to buy or sell, but to how ‘to be’ when buying, selling and managing your risk. 

There is a common belief, that the best traders succeed because they can control their emotions and because they think before they act.

That is far too simplistic: The successful traders I have met succeed because they master the behavioural side of trading, not because they can control their emotions.

I worked as a trader for over 20 years, and for the past 10 years have been coaching traders from across the buyside and the sellside of markets. The idea that you can help someone who lacks discipline to suddenly become disciplined is nonsense, but equally it does not mean they cannot  become a successful trader.

Some of the best traders I work with continually moan about their lack of discipline, yet they are very happy when their hunches lead them on to act on a news event which turns out to be the trade of the year. – Discipline would never have allowed them to take that trade.

Behavioural Trading is about knowing yourself as a trader or investor. Becoming aware of yourself, of who you are, how you function, what needs you have, and working out how you are going to meet them.

"Behavioural trading is the idea that success comes not from knowing where or what to buy or sell, but to how ‘to be’ when buying, selling and managing your risk." 

Behavioural Trading is not Behavioural Finance or Trading Psychology  

Behavioural Finance looks at the markets and investor behaviour to make sense of what is happening.  

Trading psychology is an observational assessment of what people engaged in trading are doing from a psychological perspective.

Both take a third person perspective. They look at the behaviour of others and try to make sense of them.

Behavioural trading is about turning the spotlight back on yourself and making sense what is happening for you.

It is about becoming aware of who you are, your nuances and habits, your behaviours, what drives and motivates you, what pulls your strings, what contributes to your success, and what undermines you.

The more you know and can make sense of how you function as a trader, and the more you can start to take control of how you work as a trader, and the more you can develop and sharpen your edge.  

"Behavioural trading is about turning the spotlight back on yourself and making sense what is happening for you."

The Metaphorical Mirror

Behavioural Trading is learning to look at yourself in the first person and to be objective about it. To see the real you, not an idealised version of yourself.  

Back in the year 2000, some 15 years into my own trading career. I was asked by the bank I worked at, to join an Executive Coaching programme.

Though the programme was intended to focus on developing me as a manager, the real value was what I learned about myself. - The structure of the coaching was highly reflective; the coach effectively took me on a journey through myself.

If I am honest, until then, I had largely survived as a trader. – Though that was not how I saw it at the time.

Using the metaphor of the music charts, my career until then had seen me produce a few hits and even a number one, but I could not say hand on heart, ‘I was a really good trader’.   

After the coaching, things started to improve dramatically.

It was not quite a light switch going on, but rather the beginning of a new phase which snowballed in the years ahead. The years after the coaching were by far the best of my career.

The coaching had held up a metaphorical mirror which for the first time allowed me to see myself not as I wanted to see myself, but as other would see me. – This was hugely empowering.

That coaching was the catalyst for what I now call ‘Behavioural Trading’.

Developing your ‘Behavioural Trading’ Capability.

‘Behavioural Trading’ helps people to craft a way of trading which fits themselves.

When we learn to trade, we go with the ideas and methods of others. Somewhere along the line we must develop a way of working which fits ourselves.

When I work with great traders, I have noticed how often they have crafted a way of working which is personal to them, which suits their personality, their beliefs, their style, their philosophy, their attitude to risk. This crucially helps foster trust; trust in themselves.

"This crucially helps foster trust; trust in themselves."

If I was to say what is the greatest attributes successful traders possess, it is self-trust.

After my own coaching experience, for the first time I felt that at the end of each year I could trust myself to generate a significant positive return. 

Luck was no longer going to be the defining factor, I had it in me to make good performance happen.

That is Behavioural Trading  

Footnote

People ask me often why I no longer trade. – During a conversation in 2009, the same coach who worked with me in 2000, planted the idea in my head of working as a coach, helping others to develop their behavioural trading capability. I jumped at this idea, believing I could still trade and coach. The truth is, trading is full on, I found splitting myself between coaching and trading impossible. – Coaching was my new passion, and I chose to focus on this.  

At Alpha R Cubed we work with people and businesses in the financial markets to help them explore how they could help improve and develop behaviour to catalyse stronger and more effective performance.

If you are curious about how we could help you or your business, please call us or email me at steven.goldstein@alpharcubed.com.

Steven Goldstein is a leading coach who helps people, teams, leaders and businesses in the financial markets to cultivate better and stronger performance. Steven has a rare and unique set of skills having worked as a coach since 2009 and having been a trader for over 20 years at some of the world’s leading investment banks.

Brexit – An ‘Ambiguity Aversion’ Perspective.

One of the most remarkable aspects of the Brexit referendum result, which has not received much coverage in the post-Brexit analysis, is just how much of a challenge it was to get a ‘leave’ result, far more perhaps than people realise. – The the official result was 52/48, but actually the real feelings of the British public towards the EU may have been far more negative. – The reason I make this assertion, is that people have a strong and unconscious bias to preferring the status quo over change. 

Let me explain:

Every year, I give a lecture on Behavioural Finance at the LSE, on behalf of the Society of Technical Analysis. I approach this from an applied view, focusing on how various behavioural biases impact human decision-making and affect people’s risk decisions in their trading and investment activities. – Most people are familiar with the bias of ‘Loss Aversion’, which describes how our decisions are heavily skewed by our fear of negative outcomes, which rather perversely often leads to people increasing the odds they suffer a ‘negative outcome’. There are however many other unconscious biases which skew our thinking and decision-making. One of the most pervasive in the world of trading and investment is ‘Ambiguity Aversion’, otherwise expressed as fear of the unknown, or fear of uncertainty.

To highlight how 'Ambiguity Aversion' manifests itself, I use use as an example a particular conundrum known as the Ellsberg Paradox. In the Ellsberg paradox, people are asked to choose a particular colour ball from one of two pots. - The pots are covered so you cannot see inside them. But you know that one pot contains 50 red marbles and 50 black marbles, and the other pot contains 100 marbles, but which the ratio of red to black marbles is unknown. If you pick a Black marble in one pick, you will win $100

In tests done with people facing this problem, typically people overwhelmingly prefer to choose from the pot with the known quantity of 50 red and 50 black marbles. This is despite the fact that the odds of picking a black marble from either pot is actually identical. In the unknown pot, the marbles could be all red, but equally could be all black, and any number of possibilities up to 50/50. Add all these equal possibilities, and the outcome is 50/50 in aggregate.

If people were perfectly rational, they would not have a preference for either pot, so about half would pick the first pot and the other half would pick the second. – Ironically even after this was pointed out to the test subjects, they still had a preference for the pot with the known ratio. - This test, and various version have been carried out and the results consistently show that people exhibit strong aversion to ambiguity and uncertainty, meaning they have an inherent preference for the known over the unknown. In other words, they have a strong bias to favouring the status quo when faced with a choice.

How do I bring this back to the Brexit vote?

In terms of the vote, no one actually knows how much the preference for avoidance of uncertainty affected the outcome. But the remain side were largely playing on people’s fear of uncertainty. David Cameron was known to be a big fan of Behavioural Economics and Nudge principles. The remain camp's campaign became known as ‘Campaign fear’ in the popular media, and this played to this innate fear of uncertainty and how if people chose remain over leave, the outcome would be extremely negative. They also played on people’s loss aversion. - One could argue that not only did the remain camp pander to this fear, they also had all the heavy armour and ammunition in terms of of experts, political heavyweights, business heavyweights, far greater funding and resources. - If one considers our innate fear of uncertainty, and how many people were probably heavily biased towards the remain camp as a vote to stay with the status quo, and the greater resources at the disposal of the remain side, the result itself was actually all the more remarkable. – I know a lot of people who only marginally voted to remain, of which I admit I am one. The status quo was a big factor in my deliberations, prefering it rather than the stepping into the unknown. - 52/48 was the official outcome, but if we adjusted it for the Status Quo bias effect, actually it is possible there may have been a much larger underlying rejection of the EU. – In the wake of the vote, some people were saying that given the stakes at play, the vote should have been drawn up along lines that a 55% majority needed to leave. Actually, it is quite possible that a truer statement may have been that 45% majority should have been needed to change the status quo.

In terms of the many views of the experts, and in no way intended to denigrate them, but they are just as prone to 'ambiguity aversion'. If anything, their superior belief in their forecasts, and the confirmation bias this entails, could actually skew their objectivity on views of a post-Brexit world. I recall the discussions around Britain's decision not to be part of the Euro during the 1990s. Back then many experts were predicting how negative this would be for the UK. Actually it has been quite the opposite, and the much maligned Gordon Brown is often forgotten in the part he played in ensuring Britain never joined the Euro.

My own final thought. The EU itself could do itself a huge favour by considering this vote as far more significant. Britain may actually be a bellwether for a much wider distrust of the EU in its current form. Rather than just accepting Britain’s departure, it may want to change itself in a way which accommodates Britain and other national interests, and keeps the overall broad concept of the EU, albeit in a more acceptable form, to the wider European public.

Brexit Image Copyright: zentilia / 123RF Stock Photo

Steven Goldstein is a leading Performance and Executive Coach working with Traders, Banks, Energy Firms and Hedge funds: He is Managing Director of at Alpha R Cubed, which works with banks and investment firms to improve their human capital within financial risk businesses. To know more about Alpha R Cubed, visit their website www.alpharcubed.com or email Steven at steven.goldstein@alpharcubed.com.

Follow Steven on Twitter and Linkedin.

Join the flourishing LinkedIn group Trader, Trading & Risk Psychology.

Killer Biases: How 'Cognitive Dissonance' Devastates Trading & Investment Performance.

Cognitive Dissonance is a Human Behavioural Bias which can distort our thinking and perception in ways which can be highly detrimental to the performance of individuals and groups. This article highlights how this can have serious impacts on the performance of traders and investment professionals. However the lessons from this are applicable well beyond the world of finance.

Dennis Gartman states that ‘Capital comes in two varieties, mental and that which is in your pocket, and that of the two 'mental' is the most important and most expensive’. Mental capital is so difficult to control and manage because our minds do not work in the way we like to think they do. In a perfect scenario, they would work to make rational and sound decisions, with pros and cons perfectly weighed up, and outcomes considered objectively. However, reality is very different: Markets are volatile and uncertain, which restricts our ability to act rationally, and our minds are easily swayed by factors which heavily influence the way we think, decide and act. The field of behavioural finance looks to provide greater understanding of how these factors impact our decision making, affects our actions, and shapes our behaviours. A major area of interest for Behavioural Finance is human biases, one of the most impactful of these biases is 'Cognitive Dissonance', a term which is best summed up as how we cope when faced with 'Inconvenient truths'.

People will go to great lengths to avoid admitting an inconvenient truth.

As humans we seek rational explanations based on reason. We seek clarity, certainty, and logical solutions to difficult problems. This mindset is extremely challenged however in financial markets. Whilst there is an order to financial markets, this order is typically only discernible retrospectively. Financial markets are an example of a 'complex system': Complex systems are characterized by high uncertainty, volatility and non-constant variables. In a complex system, cause and effect are only clear with the benefit of hindsight. Contrast this to a 'complicated' system which is more static, and where sensing and analysis makes it possible to discern and find definitive solutions, often with application of scientific principles. Most people have been conditioned to work in 'complicated system', we have been primed this way by our education system and culture. However, the approach for a ‘complicated system', often falls short when faced with the uncertainty of financial markets. The diagram below emphasises this point:



It is within this 'complex' world of trading and investment, where people are seeking certainty and logical solutions, that mental biases can easily distort thinking and perceptions. 'Cognitive Dissonance’ is one of the most pernicious of these biases, and can have deadly consequences for performance in ways which impact short-term thinking and long-term behaviour.

Cognitive Dissonance occurs when we find ourselves compromised by an 'inconvenient truth'. I.e. The market maybe going lower, but we continue to believe in a bullish case long after the bullish case was proved wrong. Sharing opposing beliefs at the same time is mentally troubling and make us feel extremely uncomfortable. When faced with these opposing beliefs in our mind, we may create far-reaching justifications and rationalisations in order to avoid the discomfort connected to ‘Cognitive Dissonance’. Typically, we come down on the side of our initial or invested belief, only changing sides, if at all, when there is overwhelming evidence against us. Think of the classic trading mistake of refusing to cut-out a short-term trade, which then becomes a long-term trade. You didn’t start with a strong long-term conviction, but the short-term trade went horribly wrong and you decided to hold it. You are now faced with two opposing beliefs:

Belief 1) No convincing long-term view.

Belief 2) By running this short-term position as a long-term position it should make money.

Action taken to resolve this dissonance: The right thing would have been to cut the short position and take a loss. But your 'loss aversion’ bias has caused you to avoid that action. Now with these two opposing beliefs you seek resolution of the dissonance. You do this by finding justification in calling this a long-term trade. This post-hoc rationalization is probably no better than tossing a coin, and often worse, as the market is already against you. These rationalisations now cause your perception to become more skewed. You start seeking news you want to see and ignoring the news you don’t. ‘Confirmation bias' now distorts your perception further. The path to losing more money than you ever anticipated on this trade is set. - Even worse, and possibly more damaging for your future, is the possibility this works out well!!! For now you will repeat this behaviour, and may even become part of the way you work. However, this behaviour is in direct opposition to every bit of sound trading advice (See Dennis Gartmans rules of trading). Over time, it will lead to more large losses than your account can handle. - This all came around because you could not face the inconvenient truth 'that you were wrong'. The irony being, that 'being  wrong' is just part of life in a complex world of high uncertainty.

Cognitive dissonance seriously impacts performance in more ways than you realise.

One of my coaching clients provided an excellent recent example of the damage ‘Cognitive Dissonance’ can reap. At the start of this year he turned bearish on stocks. He bought puts in the SP500, and also sold the DAX heavily. Within a few days he looked as if he was on the way to some decent profits. However, the market turned sharply, and went on a long bullish run, the trader however continued to fight this bullish move and his early year gains soon gave way to early year losses. It was now that his 'Cognitive Dissonance' started to come into play, his bearish view was maintained even as the market clearly showed bullish short-term sentiment. To add to the pain, two of his colleagues defected to the bull-side. He was now scampering around trying to find justifications for why he maintained the short trade. These justifications slowly become more desperate, he recalled himself thinking and saying that he was 'more convinced than ever that the market is wrong'. - All the time, in the cruel world that is trading, his losses were growing. Eventually the pain got too much and he pulled the plug on the short trade. - This is what 'Cognitive Dissonance' does, it can divorce one from reality, and force them to start defending their ego and pride at the cost of objectivity. - No one is immune from getting caught in this sort of trap, this trader was no novice but a senior 'Portfolio manager' at a major hedge fund. To his credit, he recognized this afterwards and when we discussed it in a coaching session he was able to exorcise the ghost of this trade from his psyche.

Whilst this highlights how Cognitive Dissonance impacts trading performance directly, there is a far more devastating indirect element to 'Cognitive Dissonance' which can cause irrevocable long-term harm: Cognitive Dissonance can stop people from learning, and keep them in a 'closed loop' which leads to habitual repetition of mistakes and errors. This can become all the more insidious the more mature one gets. During a trader’s formative years, they are likely to have managers and mentors who point out their faults. However, as traders mature, they are less likely to get this feedback and support. Without this third party perspective, it can become incredibly difficult for people to recognize when they face a 'Cognitive Dissonance', let alone to resolve it in a balanced and objective way. In the above example, the Hedge Fund Portfolio Manager recalled a number of occasions over the years, where he has been stubborn and obstinate in the face of overwhelming evidence that he was wrong. I can also reflect on my own trading within my 25-year career trading FX and rates. There was a dark time in the mid-1990s where I kind of lost my way. I recall a number of similar trading experiences to the example above, perhaps it was not a surprise that my confidence suffered for a couple of years after those experiences.

Cognitive Dissonance Can Kill Your Performance and Potentially Your Career.

The term 'Killer Biases' may sound a catchy title for an article which gets people's attention, however certain biases can literally kill a career, a company (Kodak), and even people. 'The Semmelweis Reflex' is a term which describes the tendency to reject new evidence or new knowledge because it contradicts established beliefs. It was coined after the story of Ignaz Semmelweis, a Hungarian Doctor working in the Vienna General Hospital in the 19th Century. Semmelweis found that mortality rates of women giving birth dropped ten-fold when doctors washed their hands with a chlorine solution between patients and after autopsies. He tried to spread word of his discovery throughout the European medical profession, however his advice was rejected by fellow doctors who refused to believe that their own negligence may have something to do with the death of patients in their care. As a result many thousands of women continued to die needlessly for many years to come. Carol Tavris, and Elliot Aronson, cover this topic far more broadly in a brilliant book, 'Mistakes were Made (but not by me)'. 

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Developing superior 'Cognitive Skills and 'Better Behavioural Practices' is the antidote!

It is incredibly difficult to know when you are in a situation where ‘Cognitive dissonance’ is occurring. Daniel Kahneman calls it correctly when he says “We're blind to our blindness. We have very little idea of how little we know. We're not designed to.”

The best way to avoid ‘Cognitive dissonance’ is to preempt it by developing better behavioural practices. This may not stop every single occurrence of cognitive dissonance, but it can certainly reduce, limit and mitigate the damage. In my recent article, 'The 10 Major Behavioural Traits of Highly Successful Traders ', trait number 5 emphasized 'Humility and Humbleness': Humble traders are less likely to fall victim to their ‘Ego’, and thus less likely to be seriously impacted by ‘Cognitive Dissonance’.
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Beyond the Hype: The 10 Behavioural Traits of Highly Successful Traders.

Click here to view __________________________________________________________________________________

Everyone is capable of displaying 'Cognitive Dissonance', it is part of our human operating system, however certain people are able to manage or avoid it far better than others. These people are 'Behavioural Masters'. Behavioural Mastery is vital for successful trading, probably more so than any system, product, analytical tool or service, yet is so undervalued in terms of people's priorities. People may think the likes of Warren Buffet, Paul Tudor-Jones, Ray Dalio, have some super source of informational advantage, however every bit of information they get is available to the rest of the world. The difference is that these people are 'Behavioural Masters', they execute everything that they do a little better and a little smarter. As such they create a behavioural edge. Buffet has his long-term philosophy built around his own specific temperament. Paul Tudor Jones perfected the art of strict discipline and Money Management. Whilst Ray Dalio built his business around his key core principles. 


Our own work at Alpha R Cubed has demonstrated how developing people’s cognitive and behavioural abilities can make a huge difference to their performance. Our coaching and consulting helps people and teams to leverage their behavioural strengths and develop superior cognition to improve how they engage with risk and monetise the uncertainty within financial markets. The table below highlights some examples of how this can help make a huge difference to performance. These are just some examples from bank and hedge fund clients where performance improvements have contributed to multi-million dollar improvements in performance.

These numbers only tell part of the story, client feedback tells another. The following is a from Simon Horwood, formerly Co-Head of Trading for Global FX and Short-Term Rates at Credit Suisse. It is part of a response to an internal inquiry about the coaching's effectiveness: 

"Why I feel this has been successful, are the performances of traders that have been under the programmes tutelage. Now obviously improved market conditions have played a part, as well as luck etc. But one trader who has refused to take part in the 'coaching' has turned out to be the lowest revenue producer for the past two years having been consistently the highest for the previous five. Also, all the individuals that have taken part have become easier to manage, show greater teamwork and just appear to be happier overall. The positive impact on the group has been profound."

Wrap Up.

Cognitive Dissonance doesn’t just affect individuals, it comes to affect teams, group, companies even whole industries and professions even. It is a pernicious bias which operates largely ‘under the radar’ and beyond ‘consciousness’ within our human operating system. Only by developing superior thinking and behavioural skills, and reflective processes, will one be able to reduce the damaging and affect this can have on performance and outcomes.

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Steven Goldstein is a leading Performance and Executive Coach working with Traders, Banks, Energy Firms and Hedge funds: He is Managing Director of at Alpha R Cubed, which works with banks and investment firms to improve their human capital within financial risk businesses. To know more about Alpha R Cubed, visit their website www.alpharcubed.com or email Steven at steven.goldstein@alpharcubed.com.

Follow Steven on Twitter and Linkedin. 

Join the flourishing LinkedIn group Trader, Trading & Risk Psychology.

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