Bulletproof Trader

Evidence-based strategies for overcoming setbacks and sustaining high performance in the markets

Steve Ward

• Publisher: Harriman House
• Year: 2020
• ISBN:
  9780857196682
• Edition: 1
• Topic: Business
• Subtopic: Trading
• Index: Business

Trading can be intensely rewarding. But it is also one of the most mentally and emotionally challenging activities anyone can pursue. As in other high-performance domains, those who are serious about mastering their craft and staying in the game spend serious time working on their game, including training their mind and body.Steve Ward has spent the last 15 years working as a performance coach with financial traders and investors at some of the biggest and most successful investment banks, hedge funds, asset managers, commodities trading houses and proprietary trading groups across the globe, helping them to perform at their best, to navigate the highs and lows of trading and investing in the markets, and to sustain high performance for the long run.As one hedge fund client put it to him, "It's about becoming bulletproof".Becoming a bulletproof trader is forged over time through experience, and by applying the latest insights from biological and psychological sciences, the best that practical philosophy can teach us, and a healthy dose of pragmatism – doing what actually works in the real world of trading the markets.This book brings together all of Steve's latest insights into how to deal with stresses and setbacks and sustain high performance in a comprehensive, accessible and unmissable book, so that you too can become a bulletproof trader.Don't trade without it.

Part One: Becoming Bulletproof

1. Why Bulletproof?

“I want to bulletproof myself.”

It’s September 2014 and I’m sitting in the boardroom of a hedge fund in the West End of London having a one-to-one coaching meeting with a new client, the hedge fund’s founder. He’s a successful trader with an incredible track record going back many years. I’m dressed in my standard uniform of casual trousers and shirt. Across the table he sits in shorts and polo shirt, notepad and pen at the ready.

After an exchange of initial pleasantries – primarily a discussion about the weekend’s football results – I prepare to ask my first question. I am aiming to find out more about the trader, his key biographical details, trading history, trading style and strategy – and what outcomes he would like to see from the coaching programme.

“What do you want to achieve?” I ask.

“To be able to deal with my trading performance and results with greater equanimity,” he replies.

“And why now?” I ask.

“I have never really had an extended run of bad performance. But I know that statistically one is likely to happen. I have to prepare myself for that. I need to make sure I have the skills to handle such an event. I want to bulletproof myself.”

“How would you know if you were… bulletproof?” I said. I hadn’t heard that phrase used like that before. It stuck with me.

“I would have fewer negative thoughts,” he said. “I can get obsessed about decisions I have made, especially when I have lost money or am not making it. I can be a perfectionistic. When I fail, I can’t stop thinking about it, and I know that mindset is not helpful. Sometimes I am just sat there telling myself ‘what a f****** idiot’ over and over again. My emotions can be very negative. Sometimes I feel pretty depressed. Trading can make me feel sick.”

“And what would be the benefits of being bulletproof?”

“Ultimately I think it is about keeping me in the game. I love what I do, and want to be doing this for many years. I don’t want a big negative event to take me out. But I would like to be able to change some of my thinking and how I feel when things are not going well.”

We went on to define in greater depth what being ‘bulletproof’ meant for him – identifying particular situations where it would be useful and looking at what bulletproof behaviours might be. We explored some tough situations he had already faced in his trading career and overcome. It was important to discover his current level of bulletproofing. Any trader or fund manager who has traded the markets for a long period of time will have developed a certain level of resiliency to still be in his or her seat trading – even if they feel they’re currently in crisis.

Over the next 12 months I helped this top trader develop a range of strategies that increased his ability to deal with tough trading situations. We were ‘lucky’ in that during our work together there were a couple of significant market events that had a big negative impact on his results – and provided great opportunities to practise what we had been working on together.

Our work included:

• learning about the importance of anticipating and planning ahead for challenges
• the power of acceptance (of your situation and your experience of that situation)
• how to manage the mind and the emotion-driven thoughts than can arise in times of difficulty
• understanding perception – and how the way we see a situation creates our reaction or response to that situation
• being able to see the opportunity within a challenge
• being comfortable with the worst-case scenario.

We also undertook some simple mindfulness-based meditation practices to increase in-the-moment awareness, gain greater objectivity, lower emotional reactivity and increase equanimity.

Lastly, we spent some time using biofeedback. This involved learning techniques for increasing the strength of his nervous system, making him less reactive to doses of stress – particularly the impact of it on his decision-making.

All in all, he developed an extensive toolkit that robustly increased his level of bulletproofing. Importantly, he worked at using the tools provided – he practised the skills – and as a result attained a level of trading resilienc...