In trading - 'The best loser is the long-term winner'

I am a big fan of historic war documentaries, there are often many lessons learned about trading and the mindset needed to win in trading from watching these programmes. – As my previous article ‘ 'How to Profit from the Coming Economic Catastrophe'. – And other grand delusions. ‘stressed, the actual percentage of people who succeed in trading is far smaller than the general consensus. Any advantage you can get over the opposition in trading, is vital. Considering the opposition is the entirety of the trading world, basically you have to do things better than the overwhelming majority of them, that means win better, and lose better. - Recently I watched an excellent programme on the Falklands War. A British senior army officer, made an interesting observation, he said that he 'thought the Falklands victory on our part was close run - I think the Argentinians could have won it had they played it right.' - Crucially he said 'In the end it came down to them (The Argentinians) making more mistakes than us.' - I thought about this afterwards in terms of trading. At the end of the day the successful traders are probably the ones who make fewer mistakes, or to re-iterate the quote above which comes courtesy of the mythical 'Phantom of the Pits' - 'The best loser is the long-term winner'.

This seems to defy everything we have learned in our modern society about how we approach the challenges we face in the world. Basically, we are taught to be winners, to ''go for gold', 'winner takes it all', 'got to be in it to win it', etc. In trading however, so strong is this desire to win, that more often than not traders make crucial mistakes, which constantly undermine their performance and their ability to be a winner. I see this in many of the people who come to my coaching, often they have the ability to be successful traders, and many of them already have a career behind them as successful traders, however they know that they could reach even higher, that they call the market far better than actually translates into profits. 

In trading you are up against two enemies, yourself and everybody else. - But 'everybody else' is in the same boat as you, they are up against themselves and everybody else too. Therefore, it stands to reason that everybody has the same principal enemy at the core -  Themselves. - It is this hurdle that all traders have to overcome in order to be successful. Sir Edmund Hillary, the first man to climb Mount Everest, said, 'It is not the Mountain we conquer, but ourselves'. - As a trader this was my core philosophy, and now as a 'trader performance and psychology coach', this is a principal I try to instill into my clients.

One of the biggest hurdles I see in most traders, is an inability to see themselves objectively. In his book 'Thinking Fast and Slow' Daniel Kahneman makes the assertion that 'We're blind to our blindness'. I don’t think it is a surprise, in a recent article I penned on the ‘Behavioural traits of highly successful traders’, trait number 5 was Humility and Humbleness: I have noticed that traders who I rate as high in humility, and display humbleness in their actions, are often the ones whoseem to have an ability to step back from the fray and see themselves, and their situation more objectively than others.

I will finish with one further quote, this time from my all time sporting hero, the great Muhammad Ali -"Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with extra ounce of power it takes to win when the match is even."

Thank you 

Steven Goldstein

Steven Goldstein is a leading Performance and Executive Coach working with Traders, Banks, Energy Firms and Hedge funds: He is Managing Director of Alpha R Cubed, which works with banks and investment firms to improve their human capital within their financial risk businesses. To know more about Alpha R Cubed, visit their website www.alpharcubed.com or email Steven at steven.goldstein@alpharcubed.com.


Other recent articles:
'How to Profit from the Coming Economic Catastrophe'. – And other grand delusions.
Brexit – An ‘Ambiguity Aversion’ Perspective.
Webinar on 'The 10 Behavioural Traits of Highly Successful Traders and Investors'.
The Chimp Paradox and Trading
Winning at Trading and Investing - 'Its all in the Mind'.
The 10 Behavioural Traits of Highly Successful Traders.
The Pre-Mortem: A De-Biasing Technique to Increase Trading and Investment Success.
Meet the ‘One Person’ who could really transform your ‘Trading and Investment’ Performance.
FOMO (Fear of Missing Out): Is it killing Your Trading and Investment Performance?
Video: Trader Risk Personality - How it Influences Trader and Investment Performance.
Killer Biases: How 'Cognitive Dissonance' Devastates Trading & Investment Performance.
‘Billions’: Why Top Hedge Fund Managers Use Coaches?
Following the Crowd: Why we do it?
Dennis Gartman’s Timeless “Rules of Trading”, with added emphasis.
What is Trading 'Risk Type'? Why is it getting so much attention?
Still making the same old trading mistakes. What are you doing about it?


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