Bulletproof Trader. Steve Ward
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in favour of finding ways to manage and reduce the impact of unhelpful emotions.
Stoicism, at its core, is a robust and highly practical action-orientated philosophy that aims to help people develop the skills to manage the struggles of life. It encourages you to focus your thoughts and actions on that which you can control. If you cannot control something, you have to accept it. The key is to take responsibility for how you respond – and to express your best self in every moment.
This is essential, and very powerful, for traders.
4. Pragmatism
Alongside the science it is important that the strategies in this book actually work with real traders in real trading environments. Research is important and interesting but the real-world trading floor is the true testing ground of effectiveness.
All of the techniques and strategies in this book have been used successfully with my own clients – thousands of traders and fund managers – and the wider trading, investing and banking performance communities, such as sales and research.
Their feedback has been invaluable in shaping the content. Where possible I have shared it, as well as providing example case studies to show this real-world application.
Getting the most from this book
This book has been written to be a practical resource rather than a scientific text. There are numerous exercises and activities throughout. Completing them will help maximise the impact of the book on your trading performance.
I know that this is not always easy. The key is to start by perhaps focusing on one or two areas where you would really like to benefit. Initially, you can commit to taking action in just those areas. That will make a significant difference to you and your trading, and will make further changes easier.
You can read and learn as much about running mechanics and training theory as you like, but to get better at running you actually have to do some running.
Action is at the core of performance.
“That’s why the philosophers warn us not to be satisfied with mere learning, but to add practice and then training. For, as time passes, we forget what we learned and end up doing the opposite and hold opinions the opposite of what we should.”
— Epictetus
Stay open-minded and maintain a sense of curiosity; adopt an ‘experimental’ mindset when it comes to applying the strategies and techniques here. I have been involved in the field of performance enhancement for many years and I see it as very much about self-experimentation.
You get a hunch about something that might help you improve your trading. You test it, adapt it, refine it – or bin it if doesn’t work, and try something different.
A future bulletproof trader: you
You will already be bulletproof to some extent, thanks to a combination of life and trading experiences. Much of what you are already doing may well be very helpful. This book does not aim to replace that. But even in areas where things are going well, I would encourage you to read with an eye to opportunities to try new approaches.
What got you here may not get you there.
Imagine for a moment a future trading you: even more resilient and capable of handling the challenges and demands that you face in trading the markets. What would be different? What would you notice? What action would you be taking? How would you be feeling? What thoughts would you have?
Where are the opportunities for you to develop, to become a mentally stronger, more robust, composed and resilient trader than you currently are?
Training your mind to adapt to any circumstance
It took me a long time to finalise and organise the content of this book, and just as perfectionism is a dangerous trait in trading it can be equally debilitating in writing. But my intention is not to tell you what to do, but rather to help you to develop a framework: the skills and practices – mental, emotional and physical – that are most relevant and powerful for your trading.
That is what will truly help you meet the challenges and demands of trading the markets as they arise.
“In this way you must understand how laughable it is to say, ‘Tell me what to do!’ What advice could I possibly give? No, a far better request is, ‘Train my mind to adapt to any circumstance’… In this way if circumstances take you off script you won’t be desperate for a new prompting.”
— Epictetus
Each trader is like each moment in the market: unique. And what works for one person may not work for another. As you read through the book, I encourage you to keep reflecting on the question:
‘Could this be helpful for me in my own trading? And if so, when and how can I apply it?’
1 The Mindful and Effective Employee: An Acceptance and Commitment Therapy Training Manual For Improving Well-Being and Performance; Frank Bond, Paul Flaxman, Fredrik Livheim, New Harbinger, 2013.
2 The Hardy Executive: Health Under Stress; Burr Ridge, IL. Maddi, S. and Kobasa, S, Irwin Publishing, 1984.
3 Developing Mental Toughness: Coaching Strategies To Improve Performance, Resilience and Wellbeing; Doug Strycharczyk, Peter Clough, Kogan Page, 2015.
4 The Obstacle is the Way, Ryan Holiday, Profile Books, 2014.
5 www.si.com/nfl/2015/12/08/ryan-holiday-nfl-stoicism-book-pete-carroll-bill-belichick
Part Two: Ups and Downs
3. The Nature of Trading
Before you get into this chapter, take a few moments to reflect on these two questions:
What are the challenges and demands you face in trading the markets?
What do you need to be good at in order to meet those challenges and demands?
Trading as a high-performance activity
It was February 2005 when I first stepped onto a trading floor. It was the first Friday of the month, non-farm payrolls day (the release of US employment data – as I later found out, a significant day and a big market opportunity for traders).
I can remember the minutes leading up to the data release so clearly. The traders – well over 100 in total – all returned to their seats and began to prepare themselves for the upcoming announcement. Then came the countdown from the in-house analyst – “one minute”… the noise and hustle on the floor died down… “thirty seconds”… a focused hush… “ten seconds”… a feeling of anticipation, expectation, an obvious increase in adrenaline and energy… “five seconds”…
Then the data was read over the squawk box. There was an eruption of activity, noise, emotion. It was visible even within a few seconds that many traders were experiencing high levels of stress – and the emotions that came with it.
Over