The AlphaMind Podcast - Denise Shull: Developing Visceral Intelligence to Enhance Trading Performance & Improve Trading Expertise.

Visceral intelligence is the literal feeling that you get in your body that correlates with a decision you're trying to make or an experience you are going through. Visceral intelligence is the 'Elephant in the Room' of trading. We all have it, we all use it, we all benefit by being better at it, yet people refuse to recognise it even exists. 

In this week’s AlphaMind podcast we are delighted to welcome back the wonderful Denise Shull to talk about Visceral Intelligence and Trading. 

Denise is making her second appearance as a guest on the AlphaMind podcast. As one of the leading performance coaches in the trading and investment world, Denise has specialised in applying neuroeconomics and modern psychoanalysis in her work with hedge fund portfolio managers and high performance professional athletes. She is also the author of one of the best-selling books on trader mindset – ‘Market Mind Games’.

In this episode we explore Visceral Intelligence and how we spend so much time up in our heads ruminating over the past and stressing about the future, that we miss out on vital clues and insights which our body and its feelings reveal and provide. This is why visceral intelligence and connecting with your body is so important.

This episode covers a range of themes of interest to new and seasoned traders alike, including:

• How emotions, insight, intuition come to impact our trading practices. 
• Keeping a track of your emotions to help make better trading decisions going forward. 
• How we can use knowledge of emotions to make better trading decisions. 
• Useful analogies to compare to trading to improve how we manage ourselves as we navigate our way through the markets.
• Developing visceral intelligence by naming our feelings and recognising how we can use these. 
• Emotions, risk-decisions and recognising what is important and what is not. 
• How cognitive and emotional intelligence combine and how ‘the body keeps the score’.
• How our trading systems are unique to each individual and how this makes learning other people’s systems so challenging.
• Improving your learning through greater knowledge of yourself. 
• Categorising your emotions and listening to your body’s feeling without judgement.
• The challenge and benefits of learning these elements when we have a resistance to honest self-reflection.
• The dangers of cutting yourself off from your feelings. 

You can find out more about Denise and her work at:

The Rethink Group website: 

You can follow Denise on Twitter 

Denise’s book is ‘Market Mind Games: A Radical Psychology of Investing, Trading and Risk’.

Episode Links: 

🎧 Podcast: https://link.chtbl.com/DeniseShull2021

📺 YouTube: https://youtu.be/d1pVBTpXmAE

 
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. To find out more visit the AlphaMind podcast website.

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Trading and 'The Weight of Expectations'

I am moved to write this, by several recent coaching sessions with clients which have touched upon this subject, and which crucially is an aspect I recognise in myself.

‘The Weight of Expectations’

‘The weight of expectations’ is a term which describes the pressure you put upon yourself to succeed.

We all have goals and aims that we believe we can achieve. It is when we fall short however, that we engage in unhealthy reflection, self-judgment and harsh self-criticism.

I’ve witnessed this in many trading and investor clients over the years.

It is not just the expectations they place upon themselves, but also the expectations they believe others have of them. These expectations can create some crazy behaviours, often completely out of character.

We see tangible examples of these in sport: The missed smash at the net in tennis, the 6-inch putt the golfer can’t make, the open goal somehow put over the bar. 

In practice, these are plays they could normally make with their eyes shut. But, with the gaze of the world watching, and the weight of their expectations upon their shoulders, the easiest of chances goes begging. 

One of my favourite tennis players of recent years was Andy Murray. 

Murray was someone who for years was a ‘nearly man’. Nearly making finals, nearly winning tournaments, nearly being great. But he had a major flaw: When Murray screwed up, he screwed up big time.

Murray would be winning a match but would then miss a simple shot, and would then struggle to reover. His 'head was gone'. - Then along came Lendl. 

Ivan Lendl was Murray’s new coach. I do not know what Lendl did to Murray, but suddenly, Murray could now double fault, but instead of folding, he would follow up with an ace. These same errors were no longer disasters: Murray could simply move straight on. – Instant closure. – Somewhere in his head ‘let it go’ was sounding. 

And thus, Murray started winning: Winning championships, winning Grand Slam events, winning Olympic golds. 

Expectations and the 'Trade From Hell'.

I see too many people beat themselves up over the weight of their own expectations. They don’t feel they are good enough, smart enough, patient enough, disciplined enough. They fear they are not learning, not growing, not improving.

I too was like that for many years as a trader,

Recognition of this is good. But recognition alone is not enough.

A trader needs to have a self-management strategies for dealing with this, for parking it, for moving on.

I once had the trade from hell. All traders will have their own personal 'Trade from Hell' at some point. If you have not a trade from hell yet, then it is possible you are not trying hard enough. 

I still shudder when I think of that trade. It was a market call I had got so right, but traded so badly, I had not only missed an open goal at one end, I had managed to put the ball in my own goal at the other end.

I suffered days of hell and anguish after this trade. I could not look another person in the face, let alone look myself in the mirror.

A few days later I decided to write my thoughts and feeling down in my journal. In about 5 minutes I had written down 3 pages of anguish. Then suddenly, as if by magic, the pain cleared, and the fog lifted.

With this exercise I had let what had happened go and moved on. I was no longer beating myself up for falling short of my expectations.

I reinstated the initial trade I meant to put on, even though it was at far higher levels than where I originally intended to buy. Over the next few weeks, this was to turn into one of my best ever trades. – I could never had done that, had I not let go of the weight of expectations I had put upon myself.

Moving on, Valuing yourself. 

If you find yourself burying yourself under the weight of your expectations. Then you need to make changes. You need to recognise what you are good at, and you need to value that.

Do not fall victim for unforgiving expectations you set for yourself. Do not ‘burden yourself’ with your own expectations, let alone the expectations of others.

Set yourself goals and objectives. Set up processes which help you get there. Calibrate and occasionally recalibrate these processes.

You may suddenly find your trading gets better, gets easier, gets lighter. That you start to enjoy it again. You may find you start to value yourself, and see the good and the great in you, that hidden diamond at the centre of your soul which contains all your hidden potential.

I

Steven Goldstein is a leading Performance and Executive Coach and managing director at Alpha R Cubed Ltd.  

Steven has worked as a coach with traders and investment professionals since 2009 with clients across the world. Steven's focus as a coach is on developing the 'Inner Game' aspects of trading performance. 

Prior to becmoing Steven worked for more than 20 years as a traders in Rates and FX at some of the world’s leading investment banks.

See Steven's Full Profile.

Alpha R Cubed work with people and businesses in the financial markets to help them improve and develop behaviours to catalyse stronger and more effective risk performance. Alpha R Cubed run leadership development programmes, coaching programmes for leaders and financial market practitioners, and 'AlphaMind' mindfitness programmes.   

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

(c) Copyright AlphaRCubed Ltd, April 2019. Copyright in this blog and any accompanying document created by us is owned by us. Exception are stock images which have been acquired on license. Stephen Hwking image courtesy of Wikipedia.

*AlphaMind mindfitness programmes are a joing collaboration between Mark Randall Consulting and AlphaRCubed Ltd.   

Golden Trading Guidelines.

This list of 'Trading Guidelines' is reproduced from one of my trading journals from 2007. 

These guidelines helped me navigate the financial markets during my latter trading years. I viewed them as a set of reminders to keep me on the right path on my journey through the markets. They also helped me to get back on the path when I strayed, took a wrong turn or was lured away from it. 

I started writing my ‘Golden Trading Guidelines’ in 2003,16 years into my trading career. These statements were personal to me, they were not rules but reminders of behaviours, mindsets and attitudes which were beneficial and personal to me in my trading. 

The statements evolved and changed over a number of years, and may look a little different if I were to write them again today. This is because you change and adapt, and markets change and evolve. Adaption is a constant in trading, and the best traders adapt as the markets evolve.  

I highly recommend traders and investors produce their own trading statements or guidelines personal to them. The legend Ray Dalio did this early in his career and it evolved into his guiding principles which underpinned his success. Dalio's principles later became the platform which made Bridgewater Asser Managemnt the world's bggest and most successful Hedge Fund. 

Please feel free to use my guidelines, either in this form, or as the basis for your own version. The image below is the actual list I had at the front of my journal,

My Golden Trading Guidelines.

Personal Guidelines

1) Fear and Respect the Market But Never Hate It: Hate clouds judgment and leads to bitterness and resentment. This will further undermine what is probably already a tough trading environment and will hinder a recovery.

2) Know Yourself: Know your strengths and weaknesses. Know your personal stress limits and comfort zone. Have aims and goals. – Try to maximise your strengths and eliminate your weaknesses. My major strength is my market analysis, my major weaknesses are my execution, my lack of patience, and my inability to hold a winning hand.

3) Suppression of Ego: Ego can turn winners to losers and leads to mistakes and judgment errors. Ego is not in itself a bad thing, it gives one desire, but it can also be a hindrance when too inflated or hurt. – No high fives/No boasting. Likewise, no ‘putting oneself down’, this reinforces negativity. – ‘Know what you know and know what you don’t. And no matter how good you think you are, remember to stay humble, for if you don’t, the market will do it for you.’ – Todd Harrison, Minyanville.

4) Stay Fit, Healthy and Balanced: This applies internally to one’s self: A healthy body will produce a healthy mind. – Also, externally; in relationships with family and friends. It is imperative to maintain healthy relationships. If conflicts are occurring, it is possibly a sign of one’s own tensions and stresses. – Additionally, it is necessary to take a break from the market at times. On these occasions flatten positions or keep positions small. Remember, if you fear missing a move, there will be plenty of opportunities. Moreover, it is important to give the mind a rest and a chance to refuel its batteries.

Planning Guidelines 

5) Understand the market, its drivers and its idiosyncrasies: It is vital to understand the market one is trading in. Each market has different characteristics, liquidity, volatility, event risk and minor driving factors. It is essential to be aware of them. Do not get active in new markets, until familiar with them. 

6) Preparation, Preparation, Preparation: Planning and preparation for trading cannot be overstressed enough. Too often money is lost on trading whims or poorly executed plans. Preparation includes being prepared for the unexpected, have a plan for all eventualities. 

7) Essential Money Management: This is a vital part of planning. - The downside must be protected, if trades are successful the upside will take care of itself, but inevitably drawdown will occur from time to time. During these periods it is essential to protect the downside, one has to keep oneself in the game.

8) Speculate Do Not Gamble: The following line encapsulates this, it is taken from ‘Reminiscences of a Stock Operator’ - “It taught me little by little, the essential difference between betting on fluctuations and anticipating inevitable advances and declines, between gambling and speculating.” 

9) Patience Is A Virtue: This has many applications: Do not trade for the sake of it. - Do not worry about missed opportunities, other opportunities always come along. – Wait for a market signal or a better Risk/Reward profile. – Do not anticipate breaks/stops. - Holding onto a winning position, or even maintaining a losing one. (A good poker player usually ‘stays the course’).

Trading Guidlines 

10) Markets Are Volatile and Rarely Follow the Script to the Letter: Price action in many markets can appear to be almost random, particularly at the micro level where they rarely conform to predicted market behaviour. However, at the macro level, when trending and at crucial infection points, the larger moves can be predicted with a degree of probability. However short-term, volatility will always occur. 

11) Do Not Be Afraid of Losses But Do Control Them: Losses are an essential part of trading, without losses there will be no profits. However, it is essential to control them. Furthermore, do not ever add to a loss in order to aggregate an entry (unless it is part of a plan). 

12) Do Not Feel You Have to Trade: It is not always easy to do, but sometimes it pays to sit on one’s hands or reduce. In a way this is in itself a position. - The occasions when this is prudent are: When one does not have a clear view. - When the risk reward is poor. - Ahead of crucial inflection points. - When the position is likely to clash with an extended absence from the market. 

13) Trade the Market Not Your P&L: This speaks for itself: Whenever one moves from a trading view to protecting P&L, decisions are going to be dictated by fear of losses rather than a market view. If the fear of a loss/drawdown is likely to be the driver then the position is probably too big, or the risk reward profile is probably wrong. This rule works on the upside too, when the P&L becomes the focus rather than the market view, often trade performance will suffer. This is a tough one to stick too, but all true. 

14) Good Execution Is Vital: Good/poor execution can be the difference between success/failure on a trade. Execution does not mean purely getting in or out of a position, it also means lightning up and increasing. ‘Confirmation’ is absolutely vital with execution, one of my biggest failing is when I try and anticipate stops or breaks which do not occur, and when the market temporarily pops. Give the market time to confirm the move. * 

*Additional note added later. – ‘Confirmation’ is one of the great paradoxes of trading. If you wait for confirmation, as the theory demands, then by the time you get it the opportunity is largely gone or the risk/reward is significantly diminished. If you anticipate it, it may never happen, and often doesn’t. – There is no easy answer to this dilemma. ‘This is the Art of Trading’.

15) There Are No Guarantees: Opportunities exist because of uncertainty. Price forecasts are at best estimates. Even the best forecasters make wrong calls, no one person has all information which effects price even the best forecasters make wrong calls no one has all the information which effects a price. Furthermore, new information and data are always occurring, these are liable to effect forecasts.

If any readers would like to print a version of this document for themselves, a printable copy is attached below. 

Thank you and good luck.

Steven Goldstein 

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. 

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.

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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Webinar and Presentation: “How Risk Personality Impacts Trading and Investment Performance and Behaviours”

Webinar and Presentation Invite

I am delighted to announce that the Market Technicians Association (MTA) have invited me present a webinar and give a talk about my work on trader personality and behaviour.

At these events i will be introducing a powerful new Risk Profiling tool which we use in our work with traders, portfolio managers, banks and hedge funds in developing improved trader performance and superior risk cultures. 

The 'Risk Type Compass', developed by PCL (Psychological Consultancy Limited) 

helps people understand more about their risk personality and how this comes to impact their decision-making in high risk situations. - In the webinar I shall explore how the different classifications of risk personality manifest themself in trading and investment performance and behaviours, and how this knowledge can help people, team and businesses improve performance and enhance risk culture. 

In the webinar I will be sharing fascinating research we have doing using this tool across a population of traders and portfolio managers from leading Investment Banks and Hedge Funds. The research sheds a light on different types of trading personalities and how certain trader types are more suited to particular approaches, methods and behaviours. The webinar will demonstrate how by being more conscious of risk personality you can start to reshape your trading and investment behaviours to improve your trading and investment performance.

Webinar Details

The live webinar will take place on:

Wednesday 17th February. 

Timings for this event are:

London GMT 5pm to 6pm 

Paris/Rome/Stockholm CET 6pm to 7pm

New York EST 12pm to 1pm

Los Angeles PST 9am to 10am

Hong Kong HKT 1am to 2am

The webinar is will be available at the following link: 

 Webinar Link (Available from 2 hours prior to the webinar)

Presentation Details

The presentation and talk on the Risk Compass will take place on:

Tuesday 1st March from 6pm to 7pm

Location

CMC Markets, 133 Houndsditch, London EC3A 7BX 

Registration for this event is free for MTA Members and Non-Members.However places are limited. You can register for this at the following link. https://www.mta.org/event-registration/united-kingdom-chapter-meeting-featuring-steven-goldstein/

To get a primer on Risk Type and the Risk Type Compass, please click on the article:Risk Type – What is it and why does it matter to you?


I look forward to you joining us for these events.

Warm regards

Steven Goldstein 
Managing Director - Alpha R Cubed Ltd
www.alpharcubed.com 

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The 'Behavioural Trading' blog is written and managed by leading Risk Performance consultant and coach Steven Goldstein. Steven is Managing Director at Alpha R Cubed, who work with banks, hedge funds and investment firms to help them improve their people's capabilities and performance. To know more about Alpha R Cubed, visit the website www.alpharcubed.com or email Steven at steven.goldstein@alpharcubed.com. Follow Steven directly on Twitter.

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Mindfulness for Traders and Active Investors

Mindfulness is a hot topic in trading, investment and risk-taking, however few people really understand what it is, how to use it effectively, and how powerful it can be.

What exactly is Mindfulness?
Mindfulness is a westernized secular concept, with deep roots in Buddhist philosophy and practice, which is

gaining increasing acceptance as a powerful tool to help people reduce stress and anxiety and to more fully focus and engage with the immediate task in front of them.

Jon Kabat-Zinn, Professor of Medicine at the University of Massachusetts Medical School, is the person generally accredited to adapting Mindfulness for use in the west. In particular he was influential in developing ‘Mindfulness Based Stress Reduction’ (MBSR), a highly effective tool for helping people with chronic depression, anxiety and stress.

In the past few years, use of mindfulness has expanded beyond the fields of medicine and is now being employed in a wide array of fields to help enhance performance in areas where focus, concentration and resilience are vital. Some of the areas where mindfulness is now practiced include education, the military, business, sport, performance arts, and investment management.

What is Mindfulness practice?
Mindfulness is the continuous practice of being in touch with the present moment. Jon Kabat-Zinn, describes it as follows: “Paying attention in a particular way; On purpose, in the present moment, and non-judgmentally.”

Kabat-Zinn himself was inspired and influenced by the Vietnamese Buddhist monk ‘Thich Nhat Hanh’. Hanh sums up what I believe Mindfulness is aiming to achieve in the following quote:

‘The best way of preparing for the future is to take good care of the present, because we know that if the present is made up of the past, then the future will be made up of the present. All we need to be responsible for is the present moment. Only the present is within our reach. To care for the present is to care for the future.’

Development of a Mindfulness practice, using regular meditational techniques, aims to help a person achieve a relaxed, non-judgmental awareness of their thoughts, feelings and sensations so that they have a direct knowing of what is going on inside and outside them self, in real time. Each and every person can, with the help of guidance, develop a practice which suits their particular lifestyle and challenge.

How does Mindfulness help trading and investment? Practicing "mindfulness" has helped many traders stay focused and make better decisions based on objective data, beliefs and facts. Through mindfulness you become aware that you, your thoughts, your biases, behaviours and beliefs are not one and the same. Mindfulness allows you to step back from the fray and observe yourself and your reactions to be more aware of what is happening within yourself and around you.

One of the most destructive practices one engages in when trading is that of self-judgment. This may involve comparing oneself against ideal levels of performance, against your own very high expectations, against your beliefs in the inflated expectations others have of you, or against various alternative better outcomes. Self-judgment is rarely positive, and no matter how accomplished or happy one is, they may often hold on to negative self-judgments which have the power to undermine one’s confidence and self-belief. Self-evaluation is different to Self-judgment, Self-evaluation is observation of one’s own actions, but where the message is not laced with the poison of self-judgment or self-criticism. Traders with a well-developed mindfulness practice, and a mindful way of being, are more conscious and aware of them self, their actions, and their re-actions to events and news. They are able to gain control of themselves, and can start directing their resources and energies in a productive manner. One can never control the market, but they can have greater control of themselves, of how they see the market, and how they react to the market. This, together with a sound trading and risk management strategy and practice, should enable one to be a more productive and profitable as traders and investors.

Chrysalis Performance Consulting Ltd
To learn more about our work in helping improve Trader and Fund Manager Performance, visit our website www.chrysalis-pc.com or contact us at trading@chrysalis-pc.com

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