This Ari Kiev podCast offers insights into and strategies for dealing with the incredibly stressful situations- both highs and lows- that confront traders daily.
The best people - reawakening regarding performance over the last year. How to get into the right mind set, reduce stress and maximize performance. Setting realistic goals,with a certain ammount of stretch. More prep, more work, more concentration, self coaching or with a coach, overcoming self doubt. The best guys have proved out marginal or weak ideas in the portfolio; concentrating on strengths, where you can expand, areas that have proven sucessful for you in the past. Measuring performance metrics, how to measure your people's success. What is the culture? What is the level of integrety of the guy running the fund? Is he clear about what he expects? Is he trustworthy? Are the objectives clear? The importance of candor, being clear about performance. Are employees willing to align themselves with the objectives of the firm? Jack welsh's writings. Optimism on the rise. The cautious general concensus is we're getting out of the bear market. Economy is stabilizing. More bank stability, more lending, market is reflecting that things are getting better. More optimism. Emotions are a factor in trading and psychological equalibrium is a critical variable. Instinct, pattern recognition, experience, plus, all the intellectual work, fundamental analysis, profit and loss, innovation, new products. A constant effort to balance emotions and intellect.
What is the critical thing? Get a baseline, set target based on risk reward. What constitites a stretch goal? Realistic but challenging. Understanding technical trading, certain kinds of stocks. What are your strengths? Build strategy consitent with personal strengthts. What do you have that you can use to develop your plan? How many positions? How will you hedge those positions? Understand the complexity of trading. Face your discomfort, embracing the uncertainty, making you stronger as a person... self examination. Be objective. How much are you ruled by superstition? Understand what you're feeling, but don't allow it to impair your choices. Prepare to be in the zone. Developing your own methodology: relying on your own emotional experience, integrating intellectual formulations into your own internal understanding, balancing information against your life experience. Trust your instincts. We're all insecure- when we trust someone elses strong presentation, this is "confirmation bias". Keeping track of mistakes- continually developing processes that anticipate the possibility of making the same mistake again ultimately the one thing you have some control over is yourself, that is the thing you want to learn the about as much as possible.
Recognizing that the market is bigger than you are. Most of us are hard-wired to take bigger risks when losing. Prospect theory. Master traders learn to function independently of the way in which they are hard wired. Adapt to circumstances- the best performers may be "masters of the universe" but recognize the value of working with others, providing strengths that they may be lacking. The people who have learned to be team players - good communicators- do better. Speak with candor, gain the benefit of working with a larger group. You can't do it all by yourself!
Hedge fund leadership- managing other people, motivating and empowering them. Identifying strengths, willingness to take risks and raise money- but no ability to manage people. Communication- getting people to express themselves. Takes practice and willingness to discuss issues about collaboration, for instance and maturity. maturity is important, have a sense of humor, pay attention to your emotional intelligence. Successful traders deal with this, and encourage teammates to explore and understand their own emotions. Finding the right balance. Get some coaching and support.
Defining stress, and how it manifests itself. Getting a handle on trading behaviors. Paying attention to natural inclinations- and making corrections for them. Identifing oportunities to get bigger. Just how big should your bet be? Create a centering, relaxation response keeps you from over-reacting to neutral stimuli. Assessing your ability to be profitable.
Having a profit target- what is your expectation, and what is the variant perception/transformative events that will unlock value? Optimism is less important than the quality of the work.keep a diary. the more your aware of your own impulsivity, the more you can approach this in a calmer way with better understanding. Get a handle on your fear and greed, and learn to be patient. most of your money is made in 3% ofyour trades. entry and exit strategies. Having a defined universe- what do you know well? what are your competencies? Identifying what your good at.
Where traders are turning to alleviate stress | separating the emotionality from the stress, controlled aggression- "creating alpha" in a controlled way. Having a process or a strategy. "objective ego"- stand back and recognize your reaction, make decision based on analysis rather than sentiment. Employing psychological principles- who does it best? Re-energizing activities are good, but relaxation exercises can help you center in a stress situation.
Importance of concentrating on your strengths | avoiding distractions |Being engaged in the market as much as possible | Results come from an individual's choice to produce results | the willingness to change your philosophy to succeed in a changing market
Beginning to see patterns in your own performance | Being able to recognize the pattern and make changes to it | Importance of controlling your own emotional reactions | Building confidence in the process
Wide spectrum of people who benefit from stress reduction techniques | the value of centering | becoming detached from the emotionality of the moment | Commonalities to extraordinarily successful people
Prep, practice and review- then let go of control | The better the performer, the more willing to let go of control | relax into the flow | Getting comfortable with discomfort.
what do you want in a trader | what do traders believe about themselves | Who are the best leaders, and what are their attributes.
Goal setting | risk managment principles | managing the drawdown | having a strategy- finding order with technical analysis,then letting go of control.
Competitive advantage is out the window | The need to get some objectivity | Tear down high conviction ideas | Belief gets in the way; the savvy investor looks for ways to play more risk-averse.
Symptoms of stress | Has your risk managment gone to hell? | Understanding what is a normal reaction | Risk management principles.
Notice your anxiety and recognize that it's time-limited. Spend your energy more profitably by not covering up your fear. You are not alone in this!
Recongize your symptoms and center yourself. Are you reacting to your own reactions? Be self-aware and follow the game plan.
Look at the stats! Discovering your trading patterns: functioning counterintuitively, embracing your anxiety and trading independently of your feelings.
Using this "gold nugget" can help you in times of stress and anxiety- and you can take it with you wherever you go. listen as Dr. Kiev talks you through this simple exercise
Goal-setting patterns, self-management in high stress situations.
Learning to embrace the anxiety and control the "out of control-ness"; being comfortable with inner uncertainty.
Are you holding your losers too long? Where are you making most of your money, and what is your trading pattern?
What's significant about mastering Trading Stress? Why was it important to write this book now? Dr.Kiev shares his thoughts.
Dr. Kiev shares insights on goal-setting and other tools for becoming a better trader.
Dr. Kiev offers some sound advice on reducing the tendency to dwell on past mistakes.
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