The Podcast Episode 47: Damian Hughes: The Winning Mindset - What Sport Can Teach Us About Great Trading.

A winning mindset is at least as important to trading success as the strategies and tactics you deploy. But how much effort do put into developing a winning mindset?

Having a robust system or method for finding value, an appropriate philosophy to risk, a strong risk management practice, and a thorough understanding of markets are all prerequisites for success. However, it is the combination of these factors allied to a winning mindset, which is where great performance occurs. This is the secret to success in financial markets. The greats of trading all have it. Ray Dalio, Paul Tudor-Jones, Warren Buffett, Jim Simons. 

Damian Hughes, one of the world’s leading experts on cultivating a high-performance mindset. Damian has worked with athletes, business leaders and sports-teams from around the world helping them cultivate the mindset for success in high performance environments. His list of clients includes multiple Olympic medal winners, world champion boxers, and leading sports team such as Barcelona, Manchester United and the Scotland Rugby Team.

Damian also works with high performance teams in organisations, he is a Professor of Organisational Psychology and Change at a leading British University and has written extensively about developing a 'Winning Mindset'.

In this episode we talk about mindset expansively and how it helps traders to improve performance. Some of the highlights in this episode include: 

The importance of ‘Playing to Win’, as opposed to ‘Hoping to Win’, or ‘Playing to Not Lose’: The latter two commonly lead to people constantly flipping, changing and hedging their bets, whereas the former drives a vision and directs resources and energy to find ‘How to Win’, and then ‘Sets a path to victory’. Playing to win enables us to accept losing more easily, because it is accepted as a necessity on the path to winning. You can here an excerpt from the podcast about this here: 

How those with a ‘Winning Mindset’ can articulate coherently why they are good: This is a characteristic of successful people and teams, who can then build upon this, and will therefore be comfortable avoiding situations when they do not have an edge.

‘The Dunning-Kruger Effect’: How the dangers of over-confidence and believing falsely or merely hoping you are good are potential cause of unrealistic expectations that set you up for failure.

How High-Performance individuals take responsibility rather than seek to excuse or blame: Damian talked about how mediocre coaches in sport have a mindset which often seek to absolve themselves of responsibility for bad outcomes. Whereas high performance coaches focus on what went wrong in the process.  

The important of adopting a ‘Positive Psychology’ to counteract common mistakes. We are all vulnerable to personalising a situation, making these thoughts which undermine our confidence pervasive, and then creating permanence so we believe these. These beliefs, which may be coping strategies, are usually false and extremely unhelpful. It is important to counteract these.
  
How your strategy, technique or talent provide the opportunity, but your mindset allows you to take it. Damian shared a quote by Barcelona Director of Football Txiki Begiristain "Talent will always get you to the door of the dressing room, but mindset will take you in there, and will determine how long you remain there.”

The Importance of Preparing for All Outcomes Before You Start: There are only 3 possible outcomes to any action, win, lose or draw. By just focusing on winning, and being reluctant to focus on other outcomes, we are unprepared for the unexpected, and paradoxically increase our odds of ‘not winning’. 

Stop Reading The News: Be more discerning on where you get your news and info from. Most news is unimportant but can take over our thinking and control us. This extends to social media.

Focusing on Process over Outcome: Assess whether the process was good, and the behaviours were appropriate. Focusing on results as a guide to future behaviour can mislead. Bad processes and luck produce good results sometimes.
  
Kanter’s Law and Self-Doubt: How in the middle of any project or action, you will always have a period of doubt and may look upon yourself (and feel) a failure. This can disrupt your momentum and ruin your execution of plans.

Owning the Situation Versus Being Owned By It: How we are all vulnerable to being controlled by the opponent, and how it is import to slow down and regain momentum at these times.

Using a Pre-Mortem: How pre-mortems can enable is to prepare for unwelcome outcomes. (Check out our recent episode with Gary Klein, about Pre-Mortems), 

Having a Mental ‘Tripwire’: Having techniques or rituals which can enable us to shift mindset or mental states to suit the situation, and to protect ourselves from ourselves. A tripwire is a reminder to make or review a decision or take an action. In this part Damian talked about the band ‘Van Halen’ and their extraordinary M&Ms tripwire.

Trademark Behaviours and how ‘Success’ Leaves Clues: The importance of examining your performance and behaviours for the hidden behaviours which support your process and underscore your success. High performers have trademark behaviours which they can apply repeatedly, consistently and effectively. 

Anyone Can Win Once or Twice, Great Performers Win Consistently Over Time: How great teams and performers cultivate a mindset which ensures they win time after time, again and again, rather than just occasionally.  

Techniques to Shift Mindset: Damian talked about some steps you can take to start developing your mindset or to shift mindset to a more productive mindset. 

Damian’s books include: ‘
• The Winning Mindset: What Sport Can Teach Us About Great Leadership.
• Liquid Thinking: Inspirational Lessons from the World's Great Achievers
• The Barcelona Way: How to Create a High-Performance Culture

Damian is co-host of the High-Performance Podcast with Jake Humphries of BT Sport.

Damian’s website is http://www.liquidthinker.com/

Damian also mentioned a book in the podcast called ‘Stop Reading the News’ by Rolf Dobelli

Episode Links:

🎧‬Buzzsprout
🎧Main Link
🎧‬iTunes
🎧‬Spotify

The AlphaMind Podcast

The AlphaMind podcast is co-hosted by Steven Goldstein and Mark Randall, market veterans with over seven decades between them in the financial markets.

The podcast delves into the lives and stories of extraordinary guests whose experiences provide a fresh and powerful lens through which to understand the mental, emotional, psychological and behavioural challenges people face when encountering risk and uncertainty in financial markets.

To find out more visit the AlphaMind podcast website.

The AlphaMind Podcast is produced in partnership with 'The Society of Technical Analysts'.

The AlphaMind Trader Performance Coaching Programme

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

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

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

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

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

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Jesse Livermore's Trading Mindset Pearls of Wisdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Article by Steven Goldstein

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

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

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

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

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.

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

Join the AlphaMind Linkedin Group.

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Mark Randall's Trader Tips

The following are an ongoing series of Trader Tips tweeted by market veteran Mark Randall of @themindguys.

This series is based on Mark Randall's experiences in a long and distinguished career in Financial Markets from the early 1980s through to the 2010s.

Trader Tip #1

Don't bring a negative 'mindset' to face the market, this will turn you away from complex ideas, walk you towards simple trades for the sake of them, reduce patience and awareness, increasing error rate, emotional state and stress. All costing you Alpha.

Trader Tip #2

When you show up to trade and you face your 8 screens to build your view, first ask the question "how am I?" Pre trade preparation of "self" is one of the biggest trading assets in your armoury, see the market and potential alpha with calmness, clarity and control.

Trader Tip #3

Your trading today began with how you managed emotional lumps and bumps yesterday, how you wound down, how you retired, how you slept and how you awoke. Build Mental Capital & razor sharp intuition as part of the process to discover today's Alpha.

Trader Tip #4

Stay on plan, when you are 'risk on' and run a stop against it, it is wise not to turn a stop into a double up if the market approaches the stop level. It is more Alpha optimal to stick to a plan then reset, refresh and refocus once stopped out.


Trader Tip #5

If stressed you will see the market as a tight spotlight, perhaps just seeing the bid, offer and size. You get too close to the trade. Relax, open your awareness & see the breadth of the market. Alpha opportunity exists in the fringes and shadows.

Trader Tip #6

Never underestimate the value of your operations team. Work with them and support them, they need to be as sharp as you in stopping Alpha leakage by spotting errors and miss-postings in real time. They are on your side ! Never ever forget that...!

Trader Tip #7

If you overhear a trade idea, or someone boasts about having risk on gathering alpha - DO NOT jump on the trade. Remember that you are playing your OWN GAME, do not suddenly acquire the game of another trader. stick to YOUR plan and YOUR trade ideas.

Trader Tip #8

Don't get emotionally carried away when you are on a winning streak - managing the emotional 'ups' is as important as managing the "downs". Observe positive and negative events as just the noise of the flow. Such a balance mindset can be taught...

Trader Tip #9 

Clutter. look at your desk, stickits, books or old research. Get "words" out of view.. because what the eye can see as words it will read over and over again. Clutter drags you away from focussing on your critical and complex task of discovering Alpha

Trader Tip #10

You don't have to trade!

Opportunities may not be there or aren't always clear, don't get frustrated and beat yourself up as not being sharp enough. Walk away from the market and Refresh, Reset and Refocus to return with Clarity, Calmness and Control.


Trader Tip #11

Resist trading the "market" in your head. You can set up too much of a positive expectation by making presumptions about targets or market trajectory that may fail to happen, aim to be present and agile minded for when you modify risk in "real time".

Trader Tip #12

Errors. Close out and mentally move on. In my experience errors come in 3's, if you can't park it and move on, the "what a fool am I" internal chat will drag your focus away from the opportunity of the market and you will make other simple mistakes! Let it go!

Trader Tip #13 

More often than not a novice trader will just be "seeing" the market, the optic of screens, charts, feeds, market depth etc. A professional trader will "feel" the market. That difference, "The Edge", is determined by nurturing Emotional Intelligence 

Trader Tip #14

 Remember that at a fundamental level, to stay mentally sharp, agile minded, decisive, creative and calm under pressure your brain and cognitive function needs REST, FRESH AIR and HYDRATION . Your Alpha opportunity starts with you managing you !

Trader Tip #15

Don't think of the market as directional, think of it vibrationally. Your trading style will match certain vibrations but not others. And within the vibration understand that every upmove starts with a downmove and vice versa.

Trader Tip #16

If you are anxious, tired and fighting with decision making - Get fresh air. Avoid caffeine, in most people it increases anxiety, mood swings, self doubt, stress, switches on tunnel vision, turns off cognitive ability creating a non optimal state.

Trading Tip #17

Trading intuition requires a finely tuned body system and a positive Mindset that is paying attention with curiosity and full open awareness to an evolving market event in real time.

Trader Tip #18

Know your market !

E.g. If you are trading fixed income futures make sure you overlay key yield levels from the cash market on charts you are interpreting. They are critical in determining macro trading ranges and very often overlooked by the novice trader. 

Trader Tip #19

Be careful in having trade exposure beyond Friday lunchtime. Unnatural pressures of weekend risk protection, go home early close outs, stop seekers. etc can create unexpected movements in thin conditions that can ruin alpha (and your weekend.)

Trader Tip #20

Studies show we are mentally "here" about 50% of our waking hours as our thoughts distract us, but 70%+ presence is achievable using Mindfitness techniques. Heightened market awareness, trading edge and positive mindset lies in that 40% uplift in presence

Trader Tips are brought to you by Mark Randall: To here Mark's excellent interview on the AlphaMind podcast. Click on the advert below: 

As Mark publishes each new Trader Tip on his @themindguys Twitter page or on the AlphaMind @alphamind101 Twitter page, this will be added to this list. You can follow Mark on Twitter at this link.

Article by Mark Randall

Mark is veteran of the Financial Markets with over 30 years’ experience broking futures and options for leading firms such as Greenwich Capital and NatWest Markets.

Mark has developed cutting edge Mindfitness programmes and services based on high impact Mindfulness techniques devised and used to such powerful effect by US Military Special Forces.

Mark developed his powerful Mindfitness Programmes from his own use of mindfulness as a tool to be effective in chaotic and unpredictable market environments, enabling him to achieve such a long and successful career as a broker.

Mark delivers his programmes and workshops inside corporations, insurance firms and trading businesses, delivering mass programmes across entire businesses, and working with core groups of senior managers, including board level teams at major investment firms.

About AlphaMind


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

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

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

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

Join the AlphaMind Linkedin Group.