Trading Performance Dipped? You Need This
Over the course of his meteoric rise from young man to successful trader he had come to believe he was unstoppable. He was on fire. In at the crack o dawn, powering through his days, doing WHATEVER was needed to succeed. He was certain he could not fail. He was the main man! He kept aiming higher and higher. His whole life felt awesome. Why? Because he was The MAN on his desk! His friends and family saw him as the man who went to the City and conquered! Living the dream.
Fast forward just a couple of years. His hunger is not what it was. The treadmill of trading life has kicked in. The new breed is now on the desk. They seem hungrier than he ever was? As soon as the bell goes and the adrenaline drops, he is looking over his shoulder living in fear.
Sound like anyone you know?
Been at the top of your game, then for absolutely no identifiable reason the winning trades faltered and the bonuses dried up? Your power to deliver has waned? Life has got in the way? Buying too soon? Buying too late? Have you lost the balls to follow through and beat the gun? What has changed that means you are no longer following through?
This may just be the most important article you will read this year.
A recent study of 40 financial traders over a 2 year period at the Department of Physiology, Development, and Neuroscience, University of Cambridge, Cambridge United Kingdom; has concluded that successful trading is more than knowledge of securities. “Traders must also possess confidence enough to place their bets, risk preferences high enough to place bets of meaningful size, and the ability to process information quickly enough to keep one step
ahead of competitors”.
So what drives this confidence?
The study continues, “In that study we noted that on days when traders had high morning testosterone compared with their median level during the study, they recorded a significantly higher P&L for the rest of that day than they did on days of low morning testosterone. In other words, morning testosterone levels predicted afternoon P&L”.
So if at this simplistic level testosterone levels drive our ability to take action, to take the risk, to place the bets, to lead the market. How do we break the cycle we are in? Scientists have yet to develop a solution that means we start playing at our peak with one blue pill and a glass of water.
I can guarantee with cast iron certainty that I know what your mindset was when you started in trading. You were either **** scared that you could not fail; no, scratch that, you would not allow failure to be an option. You had your back against the wall. There were times when you worked 16 hours straight reading, listening, immersing yourself in everything stocks to ensure you would not fail.
Am I right?
Why did you have this pig headed single mindedness? Who were you proving a point to? This drove you. This created the drive and the testosterone that in turn created a belief and a self fulfilling prophecy. “I will not fail!”.
What has happened to that person?
If you have stopped trading at your peak, the reality is, if you stripped away the layers one at a time you have reached your comfort zone.
Aka known as grey. Aka a living death.
You are more content doing an hour or two less a day, you can deal with the loss of status, you have had your day right? You can’t be at the top forever. You had it good while it lasts. Life slows down, it’s only natural I would lose my edge, my confidence would drop. Yes, the wife and I now argue over money, but that is normal isn’t it? It will be alright, no-ones died……
You are more than that. This middle no mans land you are in is not you. You are more than this!
You know in your gut that you can achieve much more than you are demonstrating now. You have the experience. You have the skills. You have the competitive edge.
If you, no, scratch that….. WHEN you get your momentum back, you will be armed with twice the skills and experience you had when you were at the top of your game! You have even more potential than the new breed!
What if something could come along and fill you with absolute certainty that you will find a way that will make you The MAN again when the voice inside says otherwise?
Let me give you an example about a client of mine; let us call him ‘Mike’. Mike was working at Nomura in 1996 and absolutely kicked it. He was the proverbial dogs b’s. He could do no wrong. He told me, his thirties kicked in. He got used to the drinks after work, the cars, the all night parties, the status. As sure as you can be that Tiger Woods will get caught out again, Mike woke up one day and was threatened with losing his lucrative position at Cazenove. Why? He said he had ‘lost his edge’. He was going to be out of his ludicrously high paid role along with half the city. Who the hell was going to pay for the house? He hit a downward spiral. He had cold sweats. He was out of work, a failure. Tail between his legs. He was meant to be impenetrable. Scotch became his ally. The burn rate his savings was killing him and his ego.
Fast forward 2 years. He was earning more than he ever had. Why? He had met the woman of his dreams, had a baby. He had to step up now. He had his back against the wall. He had to make this work. It was now that he found out how to get back to being him. To follow through once again. As a man he knew he was capable of more. This is when Mike was put in contact with us via a mutual trader acquaintance.
First Mike needed to understand why he was not performing at the levels he once was.
There are 4 factors to every cycle of success in your trading career
Factor # 1 – Potential to be a successful trader
This does not change. This is limitless. Guy hands; the UK’s leading financial trader was born dyslexic. He was even cast as Lady Macbeth as a 10 year old. What would that do to his sense of self? His potential did not change. He had it. He just needed to find it and USE it. He started at Goldman Sachs, then went to Nomura when Mike was there. He made a veritable fortune. His potential was there as a 10 year old probably getting mocked. He left Nomura to create Terra Firma which debuted with a $2.7 billion private equity fund, immediately making it one of the larger private equity firms in Europe
How much have you made in a year? You have done that already, when you did not have the skills you have now. Your potential to achieve much greater heights is there. It always will be. Your potential is no more, no less than Hands. It is limitless.
Factor # 2 – Action you take each day as a trader
Has this changed? You know, the action you take determines the results you will get. Has this dropped? Are you taking less action? Are you taking the same action? Are you making the calls? But making them late? Are you taking the action but not really believing what you are doing? Are you merely coattailng now but following the wrong guy? Taking more action without the belief is fruitless.
Go with this, you are about to have a breakthrough.
Factor # 3 – The Trading Results you get every day
Totally dependent on the previous steps. Have you tapped your potential and taken the intelligent action required to get the desired results as the bell sounds? Have you lost your shirt more than once? Your action is dependent on your potential, which we know is limitless, so why has the action not transformed into results which should match your actions? What type of action are you taking? Think this through carefully, we are nearly there.
Factor # 4 – Your belief that you can be / are an awesome trader
The middle ground of ‘maybe I am, maybe I’m not’. This will kill you in the trading environment. SO what makes the rich get richer? The successful trader gets more successful?
Let’s go back to when you were at the top of your trading game. When you had the momentum, when you were The Man. You were getting results that matched your executed action. Your potential was the same as it is no, so what was different?
You “tapped” more of your “potential”.
Really think this through. The only difference was that you knew in your gut. You knew in every fibre of your body that you were the man. That you were going to make this a success. No, scratch that. You KNEW you were already a success and reality just had to catch up with the vision you had in your mind. You know you would not fail. Didn’t you!?
Don’t just read this intellectually. Stand up and feel it! What did you feel in your gut as you looked in the mirror each morning when you brushed your teeth? What do you feel now? A winner! Proud! Certain!
What do you feel now?
The difference is you believed you could achieve that day, that week, that year, this lifetime whatever you set your mind to! This belief drove the very biomechanics of your body. You walked, talked, breathed, held your head, slept in different patterns, talked with a deeper, slower voice. Do you see the power that this belief held over your thoughts and even your physiology?
What do you believe today? (well, up until you have finished this article).
Death by a thousand cuts
You didn’t log onto your trading system one day and suddenly lose it. The transition from your old belief (The Man) to your current belief (I am destined to…) did not happen overnight. You did not realise that your belief in who you are and what you could achieve was changing at all. It happened bit by bit. Trade by trade. Day by day.
A dear friend of mine calls this process of going from the Alpha male. Successful, in control of his destiny to the shadow of himself – ‘Death by a thousand cuts’. Your beliefs are always changing.
So how do we get back to ‘The Man’? How do we get your belief back that determines how much of your trading potential you will start tapping right now?
What follows are three simple and deeply effective steps that will recondition your conscious and subconscious mind to that of the successful trader which you are.
As humans we tend to look for the most complex route to success. The simplest route is always in a straight line. Follow through and you will see massive change to your end of day P & L.
Step 1 – Associate massive pain to this belief that has held you back
Action Point: Stand up, close your eyes, see yourself in 5 years time acting in the same way you are now. Ask yourself the following questions.
“What does this belief stop you doing in your life?”
“How has this held you back in the past in the bank, at home?”
“How else has it held you back in the past, what else did you not do because of this?”
“If you did not change this what would your life be like 1 year from now?”
“What about 5 years from now?”
“What would you call a person who let a belief about their trading performance like this this run their life?”
When you feel knots in your stomach and it feels uncomfortable, you are there. Only move onto step 2 when you reach this point.
Step 2 – Create doubt about this BS current belief.
How did you cause the original belief do crumble? By questioning it.
Action Point: Remember the empowering (slight sarcasm) questions you would ask when you were on the way down from the top and write them down.
“What if I miss the trade?”
“What if I have just been lucky so far?”
“What if the new breed takes over? What if I don’t win big this year? “
Each of these questions formed a foundation and with each one the foundation got stronger and stronger, bit by bit (death by a thousand cuts), until you believed that there was little point expending the massive effort researching your trades you once did.
We are now going to recondition your mind to take control of what you believe at a subconscious level (scientists now say the subconscious mind is 30,000 times more powerful than the conscious mind).
5 Power Drivers
Use the 5 Power Drivers to annihilate your old belief. What was your old limiting belief? Mike’s was “I am not up to being a success trader, I just got lucky”.
Action Point: For each Power Driver, think about the evidence, the facts you have that fully disprove your beliefs, feel them and write them down (in hand, not typing).
Below are Mikes Power Drivers.
Environment – “I have worked at one of the worlds most prestigious banks for 10 years, which is more than just luck. I guess I must be doing something right”
Education – “I have studied from the worlds best, I devoured Chuck Mellon and Warren Buffet materials, and I did go to a great university and aced it!”
Past results – “I have traded successfully successfully in bear and bull markets. Hell, I have proven myself in all markets”
Events in life – “My father passed away, and I still managed to step up, focus and keep my head”
Creative thinking – “I have the balls to face this front on now. How many other people are ready for round 2, blow the dust off and go for it again?!”
Action point: Keep reading these again and again until the beliefs starts to weaken and you can feel in your stomach (this is key) that it has less of a grip on you.
Step 3 – Establish what you want to believe
Now this step is crucial. We have begun to loosen the hold the old belief has on you; we are now going to recondition and imprint the new belief on your subconscious (which drive yours conscious actions).
Action Point: Take 5 minutes. Go back to how you felt the first time you knew “you had made it”. What was that belief?
Mikes belief about his trading ability was: “I can do anything. I have come from a small town. Talked my way into one of the biggest banks in the world, have earned 10 times my initial salary within 24 months. I can do anything! I am The Man!”
Now what would you have to believe in the 5 power drivers to live that belief every day?
You may want to take what you have written in step 2 but add gasoline to really make them emotional. So when you read them you feel it in your gut.
Mikes new foundations:
Environment – “I have a beautiful home, family who worship me, friends who look up to me, this did not happen by luck, I am the man, I stepped up the very minute I entered the bank. That is the real me. That is when I felt most alive. That is the man!”
Education – “I have all this on the job education, I have contact, I have the experience, I know that good follows bad, these young bucks don’t get what I get, I know that it will all turn out awesome. Why? Because I am stepping up again man. Round 2 here and I am going to use every ounce of what I have learnt to make this one count!”
Past results – “I have stepped up man. Would I have taken these results as a 10 year old boy when my imagination was at its peak!? Yes! I have achieved immense amount! Hell I love what I have done. I have earned a fortune and I have my health and family! What more could I achieve!”
Events in life – “I have been through the mill and back at times and I am not just standing. I am excited about what the future events hold! This next chapter is going to be the most exciting, rewarding….damn, it’s going to be a nitro filled adventure!”
Creative thinking – “I will prove to myself and my family, my kids, that your husband, your Dad is a man you can be proud of now not for only what he has achieved, but for what he is going to do in the next 5 years! Watch this space! You will be so proud!!!! Yes!”
So how does that feel, reading your new beliefs and the drivers that tell you a) why your old belief is BS and b) just what the new belief is going to bring you?
How do you produce certainty /belief when the outside world tells you can’t do it?
Potential? You don’t change potential that is there?
Action? You don’t take more action as belief is small, therefore won’t work
Results? Won’t change as action has not changed.
Beliefs! You need to change your beliefs, your certainty that you can do it.
You follow these 3 steps every day. It will take 5 minutes to read these every morning, first thing in the morning and last thing at night. Keep them I your wallet on the back of a business card. Read them in the queue. Watch your life change.
This is one of many ways we create new beliefs for our clients. The key is following through on the steps in an intelligent, consistent and regular systematized approach. Success will be yours. Life will be on your terms.