AlphaMind Podcast #89 Garth Mackenzie - What Drives Trading Success?

In this episode, we discuss with Garth Mackenzie, what he feels drives trading success, what drives his trading success, and what is it about his approach which has contributed to his success thus far. Garth has been trading for over 20 years, however Garth admits the journey was anything but smooth, and despite some early successes, he found that the market was as adept in taking away, as it was in giving. In the years since his early trading days, Garth has gone on to build a thriving trading practice, putting both his own money and institutional money to work in the markets. In addition to being a trader, Garth is one of the most genuine and honest Trader Educators out there, providing excellent trading education services for the wider trading community through his ‘Trader’s Corner’ service and his ‘Talking with Traders’ podcast.

Listen Here: 🎧 https://bit.ly/3Mx1kWY

View Here: 📺 https://bit.ly/Garth_YT

Garth Mackenzie Contacts and Services: Twitter: bit.ly/3vDIYwt

LinkedIn: bit.ly/3K9NPLh Trader’s Corner Website: bit.ly/3xIa8VI Talking with Traders Podcast: apple.co/3k3mz6f

The AlphaMind podcast is co-hosted by Steven Goldstein and Mark Randall. To find out about AlphaMind more visit the AlphaMind website.

The AlphaMind Podcast is sponsored by 'The Society of Technical Analysts'.

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The AlphaMind Trader Performance Coaching Programme.

The AlphaMind Trader Performance Coaching Programme (TM) acts as a catalyst for significant improvement in trading and risk performance. 

The AlphaMind Trader Performance Coaching Programme (TM) is based on the same programme we have been running inside some of the world’s leading Hedge Funds, Asset Management Firms, Investment Banks, and Energy Trading firms over the past decade. 

The coaching programme is an opportunity for people to invest in themselves to cultivate improvements in their trading behaviours, processes, mindsets and related aspects. The programme helps people develop the key human processes which significantly increase the likelihood of success for traders when engaging in their trading and investing activities in Financial and Commodity markets.

Why Investing in Coaching?

When people invest in coaching they invest in themselves and their own performance. Quite Simply better performance equals more profits and great returns.

Many people enter trading with the fallacy that calling the market right is the step towards making more money. In reality getting your mindset, behaviours and attitudes right are more crucial to driving your success.

The programme is aimed at traders who are committed to improving their process, accelerating their performance and making or prolonging their career in trading. This includes people who have been in trading for many years and are looking to catalyse their performance to a higher level or move past a place where they may be stuck. 

The programme can be thought of as akin to how a professional sports person would use coaching to help them strive towards excellence: The analogy to sport is however limited to that comparison, the coaching is very specific to the needs of traders and investment professionals and is delivered by coaches with extensive trading experience and market knowledge who are also extensively trained and qualified in powerful techniques endorsed by some of the world’s leading coaching and psychotherapists. 

Who is the Programme Aimed at?

Individuals who participate in the AlphaMind Trader Performance Coaching Programme (TM) usually have a minimum of 3-4 years behind them, and often far more depending on what they are seeking.

Our clients include:

• Early career traders who have shown they have the potential but want to make their potential work for them on a more consistent basis.

• Mid-career traders looking to up their game and progress towards great levels of risk and productivity or move on past levels they are stuck at.

• Seasoned traders, some into their second or even third decade of trading, looking to adapt or adjust or to stay ahead of a changing game. 

We Coach the Person Behind the Trader.

The AlphaMind Trader Performance Coaching Programme (TM) is not specific to any form of trading or any asset class. Participants come from all backgrounds including private and retail traders, hedge fund portfolio managers and investment bank traders, market-makers, proprietary traders, asset managers, analysts, systematic traders, quants, day traders, spread traders, swing traders, relative value traders, long-term macro, options and vol traders, equity, forex, rates, fixed income, credit, energy, commodity traders, etc. We cover the entire spectrum of method, approach, style, market, asset class.

Programme Benefits and Outcomes:

Our clients have reported many powerful outcomes and benefits which the programme catalysed for them. These include:

• Significantly greater performance and results. 

• Improved and sustained consistency.

• Less volatility in profits and performance.

• Finding and sharpening trading edge. 

• Developing ways of working which are more congruent to personality and values. 

• Making changes, transitions or transformations with a positive impact. 

• Far more self-aware, risk aware and market aware.

• Greater market savviness.

• Development of self and presence and the ability to bring the best of themselves more often to the game. 

• Improved risk intelligence, more able to think probalistically about markets and risk.

• Sharpened techniques and analytical practices.

• Adjusted to, or adapted to, changes in their environment, circumstances of new market realities. 

• More disciplined and focused approach to work.

• Revealed blindspots and hidden causal behaviours of sub-optimal practices. 

• Cultivated better habits and reduction in sub-optimal behaviours. 

• More aware of strengths and how to leverage these for their advantage. 

• More aware of the impact of ego and negative outside influences. 

• Reduction in ego-driven trading behaviours. 

• Less emotional, more balanced and the development of greater resilience. 

• Less fear-based and more objective decision-making. 

• Working in ways more conducive to the environment of risk, better able to deal with loss, failure and setbacks. 

• Created development plans they were able to follow which had a significant impact.

• Reduced stress and anxiety in taking and managing risk.

• Able to increase risk size and more fully optimise capital. 

• Cultivate money management practices more optimal and personal for oneself and one's growth.

• Improved reading of the market, development of intuition and sensemaking capabilities.

• Created a more business-like mindset to trading and investing.

• Construction of process and practices which drive better behaviours and reduce impact of biases.

• Improved work-life balance, better relationships with loved-ones, family and friends.

• Significant career advancements in organisational environments.

• Adapted to new roles, e.g. Market-making and Execution to Taking and Managing Risk. Promotion to desk manager/head. Sell-side to Buy-side.

• Supported to make a more robust system and to work with systematic approaches. 

These are just some of the many and often multiple benefits. We do not make any promises on outcomes, it is very much up to the client to use the coaching and make it work for themselves. The onus is always on the client

In you are interested or would like to know more please email: steven.goldstein@alpharcubed.com or info@alpharcubed.com 

Frequently Asked Questions:

Q: Is the the Programme delivered globally?

Coaching is delivered face-to-face if based in London or via audio-visual conference call facility if based outside London or overseas. If the overseas clients involves multiple individuals, (E.g. In an organisation, then we will travel for some of the delivery).

Q: Is the the Programme akin to a Mentoring Service or Training Programme?

No, the Programme is NOT Mentoring NOR Training or Teaching and is thus NOT ideal for New traders.

Mentoring differs from coaching in that it is more about 'showing a person the ropes', and usually delivered by someone currently active in a role. Mentoring is essential for new traders, whereas coaching is more suitable for the various stages beyond initial development. 

As for training and teaching, we do not produce source material or interactive content, the programme is not teaching or instruction. We do run workshops which would be considered as teaching/training, but these are separate classroom/seminar style programmes.  

Q: Do you work with new and novice traders. 

This programme is not intended or ideal for new and novice traders. New/novice traders require mentoring and teaching of basic practices and principles, systems, methods, forms of analysis or system development, risk and money management practices, tools and techniques. 

Q: Would I be suitable for the programme, these are my challenges.

We talk to clients before a programme to check out their suitablity and whether it is viable for them. 

However we would not consider:

• People with under two years active trading experience. Clients must have learned the basics and be committed to trading for the long-haul.
• Traders who we deem as undercapitalised: No amount of coaching will help people who are trading with amounts relative to their risk which are not viable.
• Those who seek instruction or are looking to learn about methods, systems, analytical techniques.

Q: What is the cost, can I pay in installments, can I stop if the programme does not turn out to be suitable for me.

• We do not publicise the cost, since costs vary depending on the client. E.g. We have different fees for people in organisations which require extra work, and may have a different price structure due to the additional amount of work required. We will inform you of the cost on a direct inquiry.
• We do offer installment payment to clients.
• Clients can cease or leave the programme at any time. We are aware people's circumstances change, or they may find that the programme is not conducive to their needs. There is a small admin charge for early termination.

To listen to Steven Goldstein, creator of the the AlphaMind Trader Performance Coaching Programme (TM) and lead deliverer, talk about his work on the AlphaMind podcast, click on the advert below.

If you care curious about our method, approach, or the programme structure, please continue reading. 

Method:

Our approach is based on a style and method which we have developed, evolved and finessed over many years working with traders and investment professionals.

This approach has delivered significant success in helping catalyse major improvements in personal trading and risk performance.

The approach involves coach and coaching participant engaging in a series of ‘dialogical’ discussions over several months which explore various aspects of a person’s work as trader.

We use various high levels techniques, many taken from psychotherapy, to help uncover the factors which are subtly and often unconsciously controlling the levers on a person’s decision-making.

We term our approach ‘non-linear development’. A ‘non-linear’ approach is neither directive, instructional, nor agenda based. Instead it involves a collaborative exploration of all areas of how a person works. This includes understanding the impact of their working environment, the markets environment, their relationships, their values, belief systems and philosophies, their financial situation, how they relate to others, how they cope with risk and uncertainty, their fears and desires, and many other factors that influence their decisions, behaviours and actions. 

Whilst the programme is not agenda based, we do look to set objectives which provide a direction of travel for the coaching. However, focus is on process rather than outcomes. We term this a 'process orientation'.

The coaching’s power is in how it helps the participant to become more self-aware and brings unconscious and hidden aspects of how a person works and functions to the surface. Clients find huge benefit in talking aloud about their work to a neutral person who understands what they are going through, their challenges and nature of the job. We say 'the coach does not come with solutions but with questions which helps people find the solutions which suit them and work for them'. This catalyses a person to start making subtle but powerful adjustments to their working behaviours, processes and practices.

The coach supports the person through this process, holding them to account to ensure they are making use of these new discoveries and applying them to their work.

Typical Performance Coaching Process:

Pre-Coaching chemistry meeting or call. This allows the participant to assess the programme before deciding to commit and helps ensure they are comfortable working with the coach. - If and once the person decided to proceed a non-refundable deposit is required. 

Pre-Coaching Analysis: Questionnaires, Psychometrics and Third-Party Feedback.

• A short reflective online questionnaire.

• An online risk profile (Risk Type Compass)

• Objective 3rd Person Feedback (Optional): We seek to obtain discrete 3rd party feedback from reliable references. These may include colleagues, friends, spouses or partners, managers. – The purpose of this is to gain objective perspective on the individual being coached.

Coaching Delivery

• 8 face-to-face sessions between coach and participant lasting 90 minutes.

• Sessions take place away from where the person is trading. If it is in person, then they occur in meeting rooms away from the trading floor. If the coach and participant are in different geographical locations, then the session takes place via a secure audio-visual connection. 

• Sessions 1 and 2 occur a couple of weeks apart, other session occurs approximately 1 month apart. – Earlier sessions may be closer together; latter sessions may be further spaced apart.

• Often the last 2 -3 sessions become well-spaced apart. This allows time for the participant to internalise aspects and changes explored in their coaching. It also enables them to apply them to their work and to assess and reflect on how they are progressing with the coach. 

• Allowing for holidays, the typical programme is held over an 8 to 10 month duration.

• All coaching sessions are private and confidential. 

• The coach will provide occasional email support, subject to time and availability, plus they are available for up to two 20-minute scheduled calls if the participant would like. (These are not mandatory).

The AlphaMind Trader Performance Coaching Programme is administered by AlphaRCubed Ltd. AlphaRCubed is a coaching business which provides coaching and learning services to Financial Market organisations. You can learn more about AlphaRCubed's services, programmes and philosophy in their brochure here or on their website. 

One-to-One or Group Coaching

The AlphaMind Private Trader Performance Coaching is typically offered as a one-to-one programme. The one-to-one approach is direct, personal, and recommended for a more powerful outcome. We also offer group coaching to pairs or small groups. The group coaching involves up to 3 participants on AV, or up to 8 individuals for in-person coaching offered, which can only occur in or close to London. Larger groups of 4 to 8 would be co-facilitated with an additional coach and would involve a different structure to that described above. 

The benefit of group coaching is it provides a more economical option for people. It also offers the chance to learn with and from others, which adds an additional and valuable element. 

Programme Investment Fee:

We have different price structures depending on the type of programme, aspects of delivery, needs of the clients, whether it is private or organisational, amount of time needed to devote to the clients. Please contact us and we can arrange an interview or conversation to provide you with more information. 

In you are interested or would like to know more please email : steven.goldstein@alpharcubed.com or info@alpharcubed.com or visit alpharcubed.com

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.

Winning Gold in Trading and Investment

It wasn’t long ago that the British Olympic team (Team GB) was a firm “also ran” when it came to bringing home medals. At the Rio Olympics, however, they were remarkably successful, thanks largely to a concerted focus on the performance development of British sports talent. What lessons are there for the trading and investment industry from this intense focus on performance? 
 

One of the outstanding stories to emerge from the Rio Olympics has been the success of the British team.

Team GB finished second in the medals table, amassing 27 golds and 67 medals in total, a higher medal count than when they were Olympic hosts four years earlier, and beaten only by the US, which has a population over five times larger.

Britain hasn’t always been able to boast such impressive performance. Just 20 years earlier, at the Atlanta Olympics, the UK claimed just one gold medal, finishing a lowly 36th in the medals table, with 16 medals in total.

This transformation in performance outcomes will doubtless become a case study for aspiring Olympic nations. For UK sport, it has been a journey characterized by a deliberate focus on the process required to deliver athletic excellence.

Focusing on process is the key to optimizing outcomes in any skilled activity, be it physical like sport or cerebral, like trading or professional investment.

Great performance in trading and investment management is as much mental as it is intellectual, and arguably more so. After all, as Warren Buffett said, ‘Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ… Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.’  

Behavioural attributes, such as mindset, mental strength, emotional control and focus are just some of the many qualities required for success in trading and professional investing - and these qualities are shared by elite athletes.

And, whereas all Olympic athletes have coaches to help develop these attributes, so in risk businesses such as asset management, coaching can be used to help strengthen and fine-tune investors’ risk skills and behavioural risk capabilities - what we term ‘risk intelligence’.

Historically, this hasn’t been a focus area for the fund management industry. The induction processes and specialist training courses run by most investment firms focus on technical subjects, with little, if any, focus on improving the behavioural aspects of ‘risk performance’. This kind of learning and development has been, and remains, mostly experiential. 

In a sense, this echoes how sport worked prior to what is known as the ‘Performance Revolution’.

The Performance Revolution can be traced back to the mid-1980’s, when individuals, teams and countries started to adopt new practices and methods of developing their talent. By the mid 1990’s, this revolution had taken a hold with the growth of advanced training facilities that employed new technologies and incorporated the rapid advances that had been seen in physiotherapy, sports medicine and sports psychology.

At the same time, coaching moved on from the guy with a tracksuit and whistle shouting motivational phrases, to being a highly integrative and professional activity that encompassed all stages of an athlete’s development and performance. Included in this, was a new focus on using data (as seen in “Moneyball”) to strengthen recruitment and athlete training processes. The closer an athlete or team was to the top of their sport, the more they engaged with a whole team of coaches and data analysts to help gain the vital, often marginal, edge which translated to a huge competitive advantage.

Britain was late to this game. The spirit of the plucky amateur, putting in long hours of training, overseen by a general coach who worked with a stable of athletes was still very much the attitude in the UK of the mid-1990s. Fast forward 20 years, and Britain has made a huge investment in top quality training facilities, high level performance coaching, and in-depth use of powerful analytical processes - all of which has paid off in an a quite astonishing way.

In many ways, the trading and fund management industries, and the broader financial risk industry in general, are at a similar point to where sport was prior to the Performance Revolution.

Just as there were great sportspeople before that watershed point, so there are great fund managers and traders today. However, the early adopters of new practices in sport gained a huge competitive advantage over their rivals. Now the same is starting to happen amongst professional traders and investors: early adopters of new practices in both data analytics, neuroscience and risk psychology, supported by high quality coaching at the individual and team level, are realising measurable alpha gains, and trying to keep it quiet. 

How big is this competitive advantage? Essentia Analytics, which provides performance data analysis services to investment professionals, has shown that it can help fund managers make an additional 50bps of alpha in a given year by mitigating behavioural bias. The probability of achieving those results year in and year out is then enhanced by professional coaching.

Ultimately, the prize is consistent and sustained superior returns, more regular appearances toward the top of performance tables, and fund inflows.

One of the few pieces of research which highlights the potential from focusing on the human aspects of performance, was published by Citi Prime Finance in 2013. Citi looked at the effect of different human capital management practices within hedge funds over a three year period. They found that those firms that had a superior approach to supporting and developing their human capital outperformed rival firms that were less proactive in these areas by an average of almost 200 bp per year. That is a staggering difference, and is consistent with what I have witnessed as a risk performance coach. 

The improvements in performance I myself as a coach have seen amongst traders, investment professionals and teams I work with, have often been worth hundreds, and sometimes thousands of time the value of their initial investment in the coaching. 

By way of an example: Just last week I was informed that a trader I coached back in 2014, has for the second year running more than doubled his performance run-rate over previous years. His two years performance has now produced additional revenue of more than $3.5mio compared to his previous long-run average performance level. To the bank that employs him, for this individual alone, this is a return worth almost 600 times the initial investment in his coaching.      

So what is stopping financial market firms and their managers from joining the Performance Revolution as it takes hold in the trading and investment industry? 

New practices require out-of-the-box thinkers to lead the charge, as Billy Beane did in “Moneyball”.  Status Quo bias, which leads us all to resist change, is a powerful force. Yet forces of technological disruption and increased regulation are forcing change to happen in this industry whether we like it or not.

As British athletics figured out belatedly, their leading sportsmen and women had huge untapped potential which could be realised with a more scientific approach to human capital management. The same opportunity exists for the investment management industry today.

By adopting an advanced performance improvement approach, which utilises performance data analysis in conjunction with coaching, the most innovative thinkers in asset management can propel themselves and their firms significantly ahead of the competition. 

________

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

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If you have enjoyed reading this article and would like to know more about our 'Behavioural Performance Coaching' work with Traders and Investment Professionals, please click on the above image. Alternatively email steven.goldstein@alpharcubed.com or visit the website www.alpharcubed.com.

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