‘Billions’: Why Top Hedge Fund Managers Use Coaches?

Why do so many of the most successful people in trading use coaches? and why do so few of the rest? - Perhaps this is a question which answers itself!!!

Last week saw the first episode of the hit US TV Series drama ‘Billions’ airing on Sky TV here in the UK. ‘Billions’ is based around a fictional US Hedge Fund ‘Axe Capital’. The programme revolves around Damian Lewis as hedge fund boss Bobby "Axe" Axelrod. Another lead character is performance coach Wendy Rhoades. At 'Axe Capital' just one session with Rhoades is all you need to transform your performance.

‘One session’ may seem a little far-fetched, but then this is TV. However, several sessions with a performance coach can really make a huge difference to your trading. As a trader at a large German bank in London back in 2001, I was fortunate enough to be the beneficiary of coaching from a leading performance coach. Both during and following the coaching, which involved 6 face to face meetings over a 6-month period, my performance saw a dramatic improvement. Since 2009, I have been working as a ‘behavioural performance coach’ myself, and have witnessed significant transformations in my client’s performance. Just this week I was delighted to receive feedback from a senior FX trader who I had been coaching over the past 18 months. In his opinion, the work with we had done together contributed to around a 50% improvement in his performance. His PnL over that period was around $10,000,000, thus he attributed the coaching with an additional $3.33mio for a relatively modest investment. As an ROI, that is someway over 50,000%. And yes you did read that correctly. 

'Wall Street’s Heavy Hitters have a Secret: The Performance Coach.'

The above line is not mine, rather its stolen from an earlier article in the Guardian newspaper. Yet despite this, it is still rare to find many traders being coached. Why is this? - There seems very few fields left where people working in complex and challenging environments don’t have coaches. Sport led the way, business leaders followed; most senior business leaders have an executive coach. Now many surgeons receive coaching, as do elite military soldiers. And yet trading seems largely to have avoided it. – Some of the exceptions being those at the very top. The big hitters. – However, as we know, they prefer to keep them their secret.


Read the article getting all the hype: The 10 Behavioural Traits of Highly Successful Traders.

Click here to view

To try and understand why this is one has to try and understand a bit of a paradox. – One of the principal reasons why many traders do not hire coaches, 'is because to do so would be tantamount to them admitting they need to'. - There you are, I said it. - Just to repeat, but slightly reworded - 'One of the principal reasons behind why most traders and investment managers do not work on improving and enhancing their skills and abilities as risk-takers, is because to do so would be tantamount to them admitting they need to.' - That is one horrible self-destructive loop. – However , if you understand the world traders inhabit, then you’ll understand what I mean. Managing money and trading is not easy, one’s emotions and mental state is being constantly battered, and in a whirlwind of uncertainty, people’s ego can take a pretty serious bruising on an almost daily basis. For many traders, admitting they need coaching would represents a huge 'Cognitive Dissonance' and would be a major dent to their 'Ego'. In a world where 'self-belief' is almost as vital an asset as real physical capital, admitting that you need help seems like one sure step away from destroying that precious 'self-belief'.

I have been sometimes been frustrated in my attempts to sell my coaching services by people who tell me they don’t need coaching. One example of this related to an individual on a team of five at a major investment bank. The following is part of a response the team’s manager wrote in an email following an inquiry about the coaching from his head of HR.

‘One trader who has refused to take part in the 'coaching' has turned out to be the lowest revenue producer for the past two years having been consistently the highest for the previous five.’

Fortunately, there are exceptions I’m glad to say. It does not surprise me that so many of the world's top traders employ coaches. They are themselves enlightened people, which is what took them to the top in the first place.

One final note, the 'Return on Investment' figure mentioned above (Over 50,000%), it is more than likely that it will grow, the improvement does not stop when the coaching finishes. If previous history with many other clients is anything to go by, the improvements are sustainable. Hence it is quite possible that this ROI will be significantly higher in years to come.


If you have enjoyed reading this article, and would like to know more about our coaching work with Traders and Investment Professionals, please click the above image, or email steven.goldstein@alpharcubed.com. Alternatively visit our website www.alpharcubed.com.

You are also welcome to join our 'Behavioural Trading' blog here, and follow us on Twitter.

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