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Steve Ward, High Performance Trading .pdf

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Título: Steve Ward : High Performance Trading™ √PDF √eBook ✔Download
Autor: 35 Practical Strategies and Techniques To Enhance Your Trading Psychology and Performance

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High Performance Trading
35 Practical Strategies and Techniques to Enhance
Your Trading Psychology and Performance

by Steve Ward

To Sabine and Ollie

About the Author

Part One – Planning and Preparing for Trading Success



STRATEGY 1: Set Yourself Up for Success
STRATEGY 2: It’s Down to You
STRATEGY 3: Fuelling Success – Motivation and Commitment
STRATEGY 4: Develop a Compelling Vision of Trading Success
STRATEGY 5: T.R.A.D.E. to Success – Goal Achievement Strategies
STRATEGY 6: Know Who You Need to Become
STRATEGY 7: Find Your Magic – Developing Your Trading Strategy
STRATEGY 8: Identify Your Critical Performance Factors
STRATEGY 9: Be P.R.E.Pared!
STRATEGY 10: Create a High-Performance Environment


Part Two – Decision-Making, Discipline and
Flawless Execution


STRATEGY 11: Discipline and Your Ideal Trading State
STRATEGY 12: Deal With Distraction – Refocussing Strategies
STRATEGY 13: Stay Calm When the Pressure is On
STRATEGY 14: Get Energised – Manage Your Energy Levels
STRATEGY 15: Run Your Profits, Cut Your Losses
STRATEGY 16: Handle Losses Like a Winner
STRATEGY 17: Parking Errors – Dealing Effectively With Mistakes
STRATEGY 18: Be Wary of Overconfidence
STRATEGY 19: Deal With Negative Emotions Positively
STRATEGY 20: Embrace Risk and Uncertainty
STRATEGY 21: Pull the Trigger – Overcome Hesitation and Fear
STRATEGY 22: Understand That More is Not Always More
STRATEGY 23: Transform Adversity Into Challenge
STRATEGY 24: When Times Are Great, Keep Them Great



Part Three – Evaluation, Analysis and Improving
and Sustaining Performance
STRATEGY 25: Learn More – Keep Getting Better
STRATEGY 26: Know Your Score – Measuring Trading Performance
STRATEGY 27: Develop Winning Routines and Rituals
STRATEGY 28: Build Resilience
STRATEGY 29: Manage Stress
STRATEGY 30: Achieve Balance
STRATEGY 31: Plan Your Growth
STRATEGY 32: Generate New Trading Behaviours
STRATEGY 33: Utilise Your Strengths and Successes
STRATEGY 34: Mind Your Language
STRATEGY 35: Be Persistent!



About the Author
teve Ward is a performance consultant, trader performance coach,
director of High Performance Trading and has traded FX and stock
indices. He provides specialised trader performance and psychology
coaching and training programmes for traders in the retail, proprietary and
institutional sectors, and provides consultancy to trading and financial
institutions across the globe working in the areas of trader recruitment,
selection, assessment, training and development. Steve has extensive
experience as an in-house performance coach and trainer for leading trading
institutions, and in co-managing a large team of over 40 professional traders
in London. He was a consultant to the BBC TV series Million Dollar Traders and
is a regular trainer at the London Stock Exchange.


Steve has a history of working with elite level performers including athletes and
sports teams at world championship and Olympic level. His work utilises
techniques and strategies from sports and performance psychology, cognitive
behavioural and performance coaching, and behavioural finance, to help
traders to develop the success skills and winning mindset required to achieve
their trading goals.

High Performance Trading
High Performance Trading is a leading supplier of trading psychology and
performance services to traders and trading institutions across the globe.
We work with traders, helping them to achieve and sustain high performance,
to develop the skills and winning mindset required, thereby maximising their
trading potential and profitability.
We offer our clients a wide range of high quality services and products
• 1:1 trader psychology and performance coaching
• Seminars and workshops
• Online High Performance Trading training programme
• High Performance Trading weekend seminars
• Resources, including books and articles


High Performance Trading

• Consultancy services in recruiting, selecting, training and developing traders
If you would like to find out more about how to enhance your trading
performance and maximise your profitability, do pay a visit to our website or
email direct.


There have of course been many people who have been instrumental in helping
and guiding me to be where I am today and who have helped me to achieve
many of my goals and ambitions (this book being one of them!) and so I would
like to take this opportunity to say a few heartfelt thank yous.
The Oscars read as follows!
For their lifelong support and encouragement – my parents Vic and Judy Ward.
For supporting me in pursuing the things I love to do – my beautiful wife
Sabine and my amazing son and champion Oliver.
For always being there when needed – my lifelong best mate Blairy.
For his wisdom and encouragement – a great coach and ever-improving Yoda
impersonator, Donald MacNaughton.
For igniting my passion for performance psychology and setting me loose in
the world of sports psychology – Jeffrey Hodges.
For setting me on the path to trading psychology – Gavin Gobby.
For introducing me to the institutional world of trading – Khoi Tu.
For teaching me to trade and introducing me to the world of retail trading –
Nick McDonald.
For some great business ideas and some great times together over the years –
David Helps and Delme Thompson.
For the opportunity to work at ‘probably’ the best proprietary trading group in
the world and for supporting me in the writing of this book – Sonny Schneider
and Matthew Silvester
For making this book possible – every trader I have ever worked with; everyone
who has given input and feedback; and also to the many authors who have led
the field in trading psychology, and provided inspiration to my own study of
this topic, most notably Brett Steenbarger, Mark Douglas and Ari Kiev.
And finally to the most understanding editorial team in the world – we got
Thank you all.


t was 2005 when I first entered the world of trading, having previously
spent my time working in sports and performance psychology with elite
athletes, sports teams and corporate clients. I was invited to London to
present some seminars on performance psychology to a large trading
institution, with an audience comprised of about 150 traders. I was initially
disappointed to find that not one of them wore a pinstripe suit or bowler hat
and that the dress code seemed more akin to mandatory jeans and t-shirts. It
was, however, the beginning of what has been an amazing journey of learning
and discovery, in which I have become ever more involved in the world of
financial trading, even becoming a trader myself.


The premise behind my initial invitation was simple but novel. The institution
had been looking to create the very best environment to train successful traders
in, and which the best traders would want to work from, too. But something
was still missing.
They had a fantastic modern office right in the heart of the City; they provided
the best trading platforms and charting packages; they had developed an
programme; they had high speed
The trader performing at
connectivity, impressive risk
their peak for as much
management and just about
of the time as possible is key
everything that a trader could
to maximising profitability.
want. (Including a games room
and a concierge service!) Yet they felt that the performance of the traders could
still be better – and ultimately after having looked at all of the possible
environmental and external factors that contribute to trading success, they
finally looked to the most important person in the trading equation: the trader
himself. Enabling the trader to perform at his or her peak for as much of the
time as possible was seen as being key to maximising the profitability of the
individual and therefore the organisation.

Over a period of almost twelve months I presented regular seminars to the
traders on topics such as emotional state management, goal achievement,
concentration and focussing, the development of a trader’s mindset – as well as
working with many traders on a 1:1 and group coaching basis. The feedback
was exceptionally positive, and from this beginning I ended up working with


High Performance Trading

institutions and traders across the globe, embarking on a path that I had never
envisioned but am now absolutely passionate about. Why?
The world of trading is dynamic, results-driven and highly pressurised: all of
the factors that I had enjoyed so much in working alongside the sporting world.
Yet trading for me offered something different, too – it was a much more
complex and demanding puzzle. Trading has so many components to it that
can influence performance. The markets are an ever-evolving and truly
dynamic environment. Traders expect demonstrable results, and always
demand the highest level of performance from themselves. So here within
trading was almost a greater, more intricate challenge: how to bolster, refine
and constantly improve the performance, not of physical athletes, but of
participants in complex global finance. To this day I am of course still learning
so much from working with traders, trader managers, trainers and other
coaches, and there is always new research to be read and considered. But you
hold in your hands the distillation of the wisdom and experience I have accrued
so far, in this rigorous and enjoyable process.
The pursuit of my passion for high-performance in trading is something that I
feel fortunate to be able to undertake each and every day. I have also become
a trader myself, and so have, in many ways, become the athlete as well as the
coach! Each time I trade is a reminder for me of the demands and joys involved
in becoming a successful trader.
Steve Ward, 2009


his book is entitled High Performance Trading and is a practical guide to
enhancing your trading performance and psychology. It is about helping
you to achieve and then, most importantly, sustain high performance.


The book is divided into three core parts, representing the three areas of the
‘performance cycle’ – planning and preparation; execution; and evaluation and
analysis leading into performance improvement.
Trading performance and the results that it brings are the hub of the trading
performance and psychology wheel. The three dimensions are the core
components to achieving success, not just in trading but in any performance
In Part One, ‘Planning and Preparing for Trading Success’, we look at how we
can set ourselves up for trading success and what we can do to stack the odds
of success in our favour.
In Part Two, ‘Decision-Making, Discipline and Flawless Execution’, we look at
practical approaches for making more effective trading decisions, improving
your trading discipline and for adopting a flawless execution approach.
In Part Three, ‘Evaluation, Analysis and Improving and Sustaining
Performance’, we explore how to measure and assess trading performance so
that we can get the valuable feedback required to help us to identify what we
should do more of, what we should do less of, what we should start doing, and
what we should stop doing. Importantly, we then look at how to improve
performance, how to change behaviour – and how to become a better trader.
High-performance trading is more than a set of techniques and strategies,
though; it is an approach, a mindset, a philosophy. A high-performance
approach is founded on the desire, passion and commitment to achieve the best
possible standard of performance: by putting in the effort and time to develop
the required skills, knowledge and understanding; by accepting responsibility
for your results, and understanding that at any given time the results you are
getting are purely a reflection of your current performance level, your ability,
knowledge and skills.
As Brett Steenbarger notes in Enhancing Trading Performance, “When a person
truly commits to achieving excellence in an area, and becomes absorbed in the
process of achieving their best possible performance, they will automatically

High Performance Trading

begin to make changes to their outlook, perception and beliefs, and to adopt
performance orientated behaviours.”
The high-performance approach to trading is typified by the following:
• Striving to be the best trader that you can be – focussing on personal
excellence – and working on achieving and sustaining the highest levels of
performance possible, underpinned by strong motivation and commitment.
• Setting yourself up for success through the development of goals, a trading
strategy, a business approach, and training and practice.
• Focussing on the flawless execution of your strategy, making the best
possible decisions and staying disciplined. Evaluating and analysing
performance regularly and using this feedback to make the required changes
to enhance your trading performance.
• Persisting during the good and the bad times.
High Performance Trading is the result of over five years spent working fulltime with financial traders across the globe in institutions and proprietary
trading groups, and with retail trading clients in the arena of trading
performance and psychology. It is intended to be a sharing of ideas, findings
and thoughts that have been drawn from my experience of trader recruitment,
This is a user manual of
useful coaching with traders of all
approaches, strategies and ages, experiences, success
techniques that you can levels and asset classes. I have
also drawn on the knowledge
implement right away.
and expertise of the traders
that I have had the pleasure of working with, the industry leaders in the world
of trader training and coaching, as well as the many excellent books that exist
on performance, sports psychology, personal development and trading

The intention behind this book is not to provide a theoretical discussion of
leading topics in trading psychology (as there are many good ones already in
existence). Rather, it is to provide a user manual of practical and useful
approaches, strategies and techniques that you can implement within your own
trading to enhance your current level of performance. Not every strategy or
technique will be relevant for everyone and indeed I hope that this book will
be used equally as a reference book, dipped in and out of, and picked up and



read as and when circumstances dictate – from my own reading I know that
what I see as valuable in a book is most often dictated by where I am at with
my performance myself.
Before I started to put this book together I asked traders what they wanted from
a book on trading performance and psychology, and here are the key items they
• Practical strategies and techniques
• Easy to read and access information
• Short chapters
• Diagrams
• Stories and case studies to illustrate points
I have aimed to write this book for you, the trader, following the formula that
traders suggested, and covering the topics that they felt would be most useful.
In essence this is a book by the trader and for the trader. My greatest hope is
that you get something useful and valuable from these pages, that you take the
time and effort to apply such lessons, and that your trading performance is
enhanced as a result.
If you have the urge for greater in-depth knowledge or a more theoretical
understanding of some of these areas then I would refer you to the
recommended texts and resources listed throughout the book and also in the
My own personal measure of success for this book will be the number of people
that took something from it, implemented into their trading and experienced a
positive improvement in performance – let me know if that was you!


Part One
Planning and Preparing
for Trading Success

Set Yourself Up for Success

“Becoming a great trader is a marathon not a sprint!”
– Abe Cohen, trader mentor

Transforming into a Trader
n my consulting role with traders I am fortunate enough to be involved
with professional proprietary traders, bank traders and retail traders at
different points along the learning and experience curve. Some of the
traders I work with I have known for several years now, and I have witnessed
some of them grow from being excited trainee beginners to consistently very
profitable professionals. The traders who become successful and profitable have
achieved something that most people who take up trading do not – they have
become traders. What do I mean by this? They have transformed from learning
to trade, through becoming traders, to being traders. Each phase has its own
distinct make-up, and transition from one to another is a process that takes
place over time.


Here are a few thoughts on what may differentiate a trader at different phases
of this transformational process:

Transformational trading – 3 stages to becoming a trader
1. Learning to Trade
• Develop required basic skills, knowledge and understanding.
• Spend time on simulators/paper trading, practicing basics.
• Trading small size in live markets.
• Developing key actions and disciplines.
• Working from directed knowledge – perhaps trading a strategy learnt from
a course.
• Focus on developing basic trading skills.
• Conscious execution of skills – moving from incompetence to competence.
• May still be naive about the challenge and difficulty of achieving trading
• Prone to overconfidence from early successes in the market.

High Performance Trading

2. Becoming a Trader
• Beginning to personalize their trading strategy and style.
• Continual development of skills, knowledge and understanding.
• Focus on developing trading competence.
• Some skills becoming more subconscious through repetition and practice.
• Likely to have encountered periods of drawdown and losses that have tested
their commitment, self-belief and resilience.
• Developing awareness of importance of psychology and performance in

3. Trader
• Has the skill and ability to develop and execute strategy in line with own
abilities, skill and strengths, as well as preferred risk, decision-making,
information-processing and behavioural styles.
• Extensive levels of unconscious competence.
• Continual improvement is still a focus.
• Focus on developing trading expertise and mastery.
• Flexible and adaptable to changing market and personal circumstances.
• Able, if prepared and willing, to coach and mentor traders.
• Experienced – ‘weathered’ – in the markets!
• Fully understands the importance of psychology in achieving consistent
trading performance.
• Less focussed on P&L and more focussed on execution and mastering their

Although I have given three discrete categories here, we are really looking at a
continuum of development as shown in the following diagram.


STRATEGY 1: Set Yourself Up for Success






Where would you place yourself on this continuum?
What is the evidence for that?

Time Precedes Success
“Only time determines whether you will become a successful trader.”
– Harold Cataquet, trader coach, Cataquet Associates

In my younger days I was a keen martial artist studying both Aikdo and Jiu
Jitsu. I remember one day asking my sensei (teacher) what he felt the most
important quality or distinguishing factor was between those students who
achieved black belt, and those that didn’t. “That is easy,” he said, “the people
who make black belt just keep coming and training hard.”
In essence the key success factor was time: keeping engaged in the activity long
enough to get good at it. Time is actually a big factor in achieving success in
all high-performance arenas; and trading is no exception. In his book Outliers,
which examines what it takes to become highly successful in any given area,
Malcolm Gladwell gives the figure of of 10,000 hours’ commitment. In The
Road to Excellence, K. Anders Ericsson estimates ten years; and there is of
course the old adage that ‘it takes ten years to become an overnight success’.
One of my favourite ways of putting this basic demand for commitment comes
from Steve Lumley, a UK triathlon coach, talking about how long it takes to
reach peak level performance in elite triathlon competition – 4 x 6 x 48 x 10.
(Or 4 hours a day for 6 days each week, for 48 weeks of the year, for 10 years.)
Over the years I have been very fortunate to see many traders make the
transition from beginner, to novice, to competent, to expert trader; achieving
high levels of success and reaping the return on the significant amounts of
time, energy and in some cases money that they have invested early on in their
careers. The one common factor in all of their cases is that they spent long
enough in the markets to develop the required levels of skill, knowledge,


High Performance Trading

attitudes and behaviours. Success was not achieved overnight. They survived
the learning curve and got to the earning curve! Many people, on the other
hand, drop out through running out of personal or trading capital, not being
resilient enough to cope with the stress and pressure of trading, or through
frustration at the difficulty of the challenge that trading presents.

Getting to When it Clicks
Time enables you to not only acquire the skills, knowledge, attitudes and
behaviours that are required to trade successfully but it also keeps you in the
game so that you can get to the ‘clicking point’.
One of the most fundamental obstacles that you must overcome as a trader is
the task of ensuring that you stay in the markets for as long as is possible until
it has clicked – and then you are off!

Real Life Examples: Getting to the Clicking Point
“I believe that every new trader is working towards that day when things
‘click’. It obviously happens at different speeds for different people. The
key thing is to keep yourself in the markets long enough to allow it to
happen for you.
“I had been struggling to get my trading account up through a certain
level and achieve what I felt was the next step in my trading career. I
was doing the right things and trading well, but every time my account
got near to this financial level, things started to go a little wrong. I felt
confident in what I was doing as I was being fairly consistent and
diligent in my approach. I spoke to a much more senior trader about this
and he advised me to remain patient. He said if I kept doing the right
things then the opportunities would come; I should seize them when
they did.
“Pretty basic advice, but just what I needed to hear. Soon afterwards an
opportunity did arrive, and because I was confident and focussed I
capitalised well and burst through that barrier. From there I’ve never
really looked back. Maintaining the right practices and keeping my
discipline allowed me to stay solvent and in the markets long enough for


STRATEGY 1: Set Yourself Up for Success

a big opportunity to come along. Having a good strategy and plan
allowed me to recognise and capitalise on that opportunity.”
– Stewart Hampton, Trader
“I remember the day it all clicked. I remember it so clearly. To this day I
am still not sure why it did – but it did! Interestingly, when it clicks, all
the stuff everyone said was important, but you thought was too easy to
be significant, realises itself.”
– Nick McDonald, Trade With Precision

Experience Counts
Experience is one of the most important factors behind consistently successful
traders, and experience is purely an outcome of time. What happens over this
period that is so critical?
• Learning from mistakes
• Improved knowledge, skills and understanding
• Improved knowledge of self and strengths/weaknesses
• Pattern recognition
• Experience different market conditions
• Conditioning of behaviours and responses
For every trader, getting to the stage where you have acquired sufficient market
time and gained the required level of competence is a primary goal. How long
is this period? How long is a piece of string! It will be different for different
people. We are all unique, with our own particular set of circumstances. We are,
however, talking years here – and not days. This is a serious endeavour, as all
truly profitable pursuits must be.
“How long does it take to know that you are a successful trader? This is a difficult
question. A good friend of mine who is involved with business development
suggests that once you have got past the first three years then you are probably
quite established, so it may be something similar for a trader.”
– Nick Shannon, occupational psychologist


High Performance Trading

The J-Curve
One of the most important strategies a trader can adopt is to do everything
possible to make sure that they stay in the game long enough to get good at it
and for it to click. This is what I call setting yourself up for real success –
putting in place specific actions and
You have to learn to stay in strategies to create enduring, rather
the game long enough to than transitory, achievement.

get good at it.

When you learn to trade it is not
uncommon to see performance shape
itself as what is known as a J-Curve, as shown in the diagram below. The JCurve is a typical and common development curve for traders. In the early
stages of their career they are still learning, and so execution is not accurate or
well refined – leading to perhaps more losses. There is also a greater chance of
errors being made, and commissions and costs still have to be paid. This can
lead to a typical dip in trading account balance whilst the trader is essentially
trying to learn how to not lose money, how to manage risk and establish good
trading habits. In phase two, the trader is now focussed on making money, is
making less errors, and the execution of their strategy is improving. In the third
phase the trader is at break-even – covering costs and losses with their trading.
Finally the trader enters profitability. It is important to note that progression
and growth is not ongoing or exponential from this point and that in fact some
traders can go backwards quite significantly.
Trader Development: The J-Curve

Trader Development: The J-Curve





Break even
P&L 0
Learn not to lose


Make money

STRATEGY 1: Set Yourself Up for Success

Different traders will have different development curves and this will depend
on many factors, including the products being traded, the market conditions,
commission structures, any overheads, and then how many performance
accelerators can be utilised to sustain progress.
For some traders, growth occurs from early on in the curve and increases over
time. For others there is a long phase of waiting to break out and ‘get it’.

Short and Shallow – Trading Success Factors
For all traders, keeping the dip in the curve as short and as shallow as possible
is the key to enhancing your profitability and becoming successful as a trader.
With this in mind, it is important to understand that there are specific factors
that enable this to happen, and that you can actively implement these factors
to accelerate and sustain your progress along the curve – I call them the
Trading Success Factors.
For example, poor risk and money management can have a big impact on the
depth to which the J-Curve goes. Likewise, the amount of time that you can
actively spend trading the markets, and the quality of the training and coaching
that you get, can have a significant impact on how long it takes to break even.

Practical Strategy: Trading Success Factors
Take a look at the list below of Trading Success Factors. Which do you
have already? Are there areas where you could develop and enhance
your performance? What do you need to work on and develop next in
order to continue developing your trading?
• Strength of purpose and commitment – critical to keep you going
• Resilience – psychological/physical/financial
• Strong risk and money management strategies
• Training, coaching and mentoring – high quality, organised and
• Ability to learn and adapt
• Skills, knowledge, understanding
• Hard work and effort


High Performance Trading

• Beliefs, attitudes, perceptions about yourself, trading, the markets,
success and money/wealth
• Development of a suitable and successful strategy with an edge/positive
• Timing of entry to the markets – is the current market conducive to
• Love of trading and the markets
• Time/immersion – time to learn and trade
• Support – friends, family, colleagues
• Deliberate, focussed practice

Trader Top Tips

“A good friend of mine always told me to make sure that you live to fight
another day. That was invaluable advice.”
– David Helps, LIFFE
“Manage your risk, it will give you the staying power to succeed.”
– SJG, trader
“In order to become a successful trader I believe that the key thing is hard
work. When you begin you must immerse yourself fully in every single aspect
of the job. You can never know too much.”
– Lawrie Inman, trader
“Personally I feel success requires similar core traits and commitments,
independent of the occupation. It is simply magnified in trading, because an
individual’s survival does not rest in the hands of an employer, and perhaps
more so, because our decisions yield rapid results, be them favourable or
“With this in mind, I would advise traders that resilience, money management
and emotional control are, in my experience, essential in achieving long-term
success. I am firmly of the belief that at the opening stages of a trading career,
it is not the technical know-how that most separates the level of achievement


STRATEGY 1: Set Yourself Up for Success

of the individual, but his/her ability to apply their plans in real time, and it is
the above mentioned attributes the facilitate that.”
– Edward Arees, trader
“Be first in the office, take no holidays for the first two years, and get to know
the best traders around you.”
– Mark Lindop, trader
“In the beginning your aim should be to develop confidence and structure. Get
comfortable with your trading strategy, develop good habits and discipline and
be prepared to do whatever it takes to achieve success. It is critical that you
avoid getting yourself into a situation where you are desperate and have to
make money – this is the situation that more than any other seems to have
the most destructive effect on a person and their ability to trade well.”
– Matthew Silvester, head of training, Schneider Trading Associates


It’s Down to You – Taking Responsibility
for Your Performance

“You are the most important variable in the trading equation.”
– Mike Elvin, Financial Risk Taking

Who is to Blame?
hink back to a time when you had a losing trade, or made an error with
your trade execution, or had a bad trading day. Who or what was
responsible for the result that you got? The market? The broker? The
trading platform you were using? The room you were in? The weather?


One of the most important factors in becoming a high-performing trader and
achieving and sustaining trading success – and perhaps the core principle of
this book – is that you are responsible for your trading results. The results that
you get in your trading are created by you.
Read this…
”I am responsible for my trading results. I accept that I create my trading
How did that feel? Think back to your trading – has this been true for you?
Have you taken responsibility for your results or have you looked to find
someone or something to blame?

“Everything may be taken from us except the last of the human freedoms –
our ability to choose our own attitudes in every situation.”
– Victor E. Frankyl, Man’s Search for Meaning

It is not an easy concept to take on board. However, understanding that the
level of your trading success and the results you get is absolutely under your
control, is fundamental to becoming a high-performance trader, and achieving
high levels of consistent success. It is easy to find some other cause for our poor
performance; to create stories that shift the focus away from ourselves and onto
external factors. In doing this though we take ourselves out of the learning and
development loop. By not taking responsibility for your actions you do not
enable yourself to reflect on what you did and what you could do differently
next time. Instead you are left to wait for external factors to change to get you
the results you want – you have disempowered yourself and given control of
your trading results to external factors. You are drifting on the waves of the
market, with no rudder!

High Performance Trading

The Personal Responsibility Formula
Jack Canfield in The Success Principles introduces this formula for taking
(Event + Response = Outcome)
The basic premise of the formula is that you cannot control the events that
happen, but the outcome that you get from such events is then governed by
how you respond to them.
In trading terms I have adapted this formula to the following:
M + T = P&L
(Market + Trader = Profit and Loss)
Your trading results are an outcome of how the market trades and how you
trade the markets. Which do we have greater control of? How we trade the

“The one thing you can control is you.”
– Mark Douglas, Disciplined Trader

If you do not like the results that you are getting in your trading then there are
essentially two paths that you can take:
1. You can blame the markets (and within this side of the equation I would also
include brokers, etc) for your P&L. This is the easiest of the two options and
I am not saying that market conditions are not a factor, or else they would
not be in the equation at all. However, what we should consider is that they
are not the deciding factor.
2. You can look at how you traded the market, and therefore how you created
your P&L. This is the hardest of the two! What you are doing here, though,
is taking responsibility for your P&L. You are accepting that you have
created the outcome by trading in the way that you have. If you are unhappy
with your results then you need to look at how you can change your trading
performance until you get the results that you want. You might need to
change your thinking, your perception or beliefs, your mental processes,
your trading strategy and ultimately your trading behaviours. Your trading

STRATEGY 2: It’s Down to You

behaviour is what you have control of – and this governs your trading
performance. For more experienced traders any existing unhelpful
behaviours will be largely conditioned and habitual and this can present a
slightly greater challenge in making the required behaviour changes.

How Have You Created Your Results?
“Strategies don’t make money – people do. I have taught the same strategy
to thousands of people, all of whom have achieved different levels of success
– they did the same course in the same room with the same person and some
of them at the same time. What is the difference? The person!”
– Nick McDonald, Trade With Precision

Taking responsibility for your trading results and asking yourself “How did I
create that?” is a powerful way of ensuring that you enter a learning loop that
will move your trading performance forward. If you do not take this approach,
then ultimately you are leaving yourself to drift at the hands of the market and
you remain stuck. We get a demonstration of the old maxim: “If you keep on
doing what you have always done, then you will keep on getting the results
that you have always got.”
When you look at your trading results and ask, “How did I create that result?”
then you are in charge of the process. And if you don’t like the result, you can
start to look at what you did and what you will do differently in the future. And
when you find the key actions/events that really produced your results, then
you can make changes and get improved results.
Do you like the results you are producing as a trader?
If not, then how are you creating them and what do you need to do differently?

Practical Strategy: Taking Responsibility Through Powerful
If you get a trading result or performance that was not what you wanted,
then utilise the following powerful questions. Doing so will help you to
take responsibility for your performance, enable you to get value from a
bad experience and move on to becoming a better trader.


High Performance Trading

• How did I create that?
• What was my behaviour that led to that outcome?
• What was I thinking and feeling?
• What do I need to do differently to get the result I want next time?


Fuelling Success – Motivation and

“There is no high level performance without purpose.”
– A. Mulliner

Motivation is a Key Ingredient in Success
aving a strong motivation and purpose is a very important ingredient
in achieving and, maybe more importantly, sustaining trading success.
To achieve trading success we need three elements in place:


1. A strong interest in and commitment to trading (motivation, purpose,
captivation, interest).
2. The desire to reach a high level of performance and understanding of
what it will take to achieve that level (know your outcome and know the
‘price’ – what it will take to achieve the goal, which might include
aspects such as time, effort, money and changes to lifestyle).
3. The willingness to put in the significant time and effort to reach that
level (paying the price!)
(Adapted from Human Performance: Cognition, Stress and Individual
Differences, 1985, 2000)

Motivation is therefore integral to
Motivation is integral to
achieving success. In very simple
success. It is the fuel for
terms, it gives us the energy to do –
all the effort, adaptation and
to engage us and keep us engaged in
resilience required.
the actions required to achieve
requisite levels of knowledge and skill; to adopt the attitudes and behaviours
that it takes to become a successful trader. Motivation is critical to achieving
success as it fuels the ongoing action required. Strong motivation is also a
component of resilience – the ability to bounce back from setbacks and to keep
going in the face of adversity.

So what is motivation? Motives are reasons for doing. When we ask, “Why am
I doing this?” or “What am I doing this for?” we are uncovering our motives.
Have you asked yourself that in your trading? What was the situation? What
was your answer? Ultimately, at some stage in a trader’s career, they are going
to be asking that question in relation to whether they should carry on trading
or not. And the strength and power, or lack thereof, in their answers – their
established level of motivation – may well be decisive in determining the


High Performance Trading

“If you want it you will do it, no matter what it takes!”
– Nigel Read, trader

Our strongest motivations are derived from our sense of purpose and our values
(what is important to us). There is no high level performance without strong
Purpose is the foundation because strong motivation enables you to put in the
significant and sustained effort required to achieve the skills, knowledge,
attitudes and behaviour necessary to reach a high level of trading performance.
It is the effort needed for effort.

Discovering Your Core Motivations
Here are some useful exercises to complete to help you to start to disccover and
understand your core trading motivations, to begin to discover your purpose. It
is really important that for each exercise you give yourself the time to complete
them fully and that you do write your answers down.

Exercise: Values Elicitation
Take a few minutes and write down everything that is important to you
in your life – family, friends, hobbies. Ask yourself, “What is important
to me in life?”

Now rank them in order, the most important starting at 1.
Then consider how your life reflects your values. Are you living life in
accordance with your values?
Where does trading fit in? How important is trading to you?


STRATEGY 3: Fuelling Success – Motivation and Commitment

Exercise: Uncovering Your Core Trading Motivations
Why did you start trading? (Why do you want to trade? – if not actively

What was it about trading that particularly attracted you?

What do you want from your trading? What would that give you?

What do you enjoy about trading? What do you not enjoy?

Why is trading/being a trader important to you?

Identifying Your Motivational Style
When we look at motivation, there are many theories and models that exist.
One approach that I feel is particularly important for achieving high
performance is having both positive motivation and intrinsic, or internal,
Positive motivation is when we move towards a desired outcome. Examples
would include working hard for a bonus; following a healthy diet to feel good
and have more energy. This is opposed to negative motivation, which is when
we are prompted to act to avoid a consequence, e.g. working hard so that you
do not get the sack!
Intrinsic or internal motivation is a motivation that comes from within. It is
wanting to achieve a level of trading (or other) success because of the feeling


High Performance Trading

you will get when you achieve that goal, not because of what anyone else will
do. (External motivation, its opposite, is simply a motivation that comes from
an external source, e.g. working hard to achieve praise or financial reward from
another person; trying to prove someone wrong.)
Most motivations in life are a combination of two of these. Such a combination
creates a motivation quadrant (see below). As you can see in Quadrant 1, we
have a motivation that is positive and internal – achieving a self-set goal.
Quadrant 2 is negative and internal – not wanting to fail yourself. Quadrant 3
is positive and external – working for a financial reward or bonus. Quadrant 4
is negative and external – doing a good job so that you do not get the sack.
It can be very interesting to assess your own trading motivations against these
Look back at your list of motivations that came out from the ‘Uncovering Your
Core Trading Motivations’ exercise and for each one identify which quadrant it
falls into. After you have completed this, look through the results – do you have
a bias towards any particular quadrant(s)?

Quadrant 1
Positive and Internal
I want the feeling of knowing I
am the best.

Quadrant 2
Negative and Internal
I don’t want to be ashamed
of myself for doing poorly.


Quadrant 3
Positive and External
I want to do well to get that
extra profit.

Quadrant 4
Negative and External
I have to do well or I’ll lose
my lifestyle, job - and
maybe home.

STRATEGY 3: Fuelling Success – Motivation and Commitment

People often ask me which is the ‘best’ motivation style to use. The answer to
this is that it is likely that most people will utilise more than one motivational
style, and that, as with most attitudes, some flexibility is important in utilising
them. Everyone is different, and nothing can be universally prescribed.
However, whatever the mix, I think it is important, as said, to get solid, positive
internal motivation in there at some level. Performance psychologists have
found that people are more successful when they stop focussing all of their
energies on the outcome/results (which is interestingly one of the major causes
behind performance anxiety), and learn to focus on just being excellent at the
process of what they do. It is important to gain an understanding of the
difference between doing things for a result, and doing something because you
want to be good at it: focussing on the latter will often accomplish the former
anyway, but it will not often work the other way round. Research has shown
that it is this second, internal, motivation that ultimately sustains progress and
performance, particularly when faced with challenges and difficulties. It is a
key part of resilience.
As a trader, no doubt some of your motivations will be external (financial
reward, recognition from others, material possessions), and this is quite proper.
It is important to make sure, though, that any internal motivation is not
superficial and dependent on the same things (e.g. just the buzz you get from
trading, achieving a feeling of success). It must go deeper. As a trader, if you
base all of your motivation – internal and external – around evanescent
financial results, what will happen if you encounter a quieter period in the
markets and your P&L gets lower? Or what will happen if you encounter a
challenging time in your trading and your results are low? At the point where
you most need your motivation and drive, they would actually be at their
lowest. But people with strong internal motivation enjoy challenges, reversals
and trials, as they know that this pushes them to be even better. For them, the
old cliché is an inescapable fact: ‘What doesn’t kill you makes you stronger!’

Some Examples of Successful Trader Motivations
“Money and freedom; a long-term goal of having my own trading
company; being my own boss; flexibility.”
– bond trader


High Performance Trading

“Enjoying the game/winning; wealth and way of life; excitement and
buzz; being my own boss; accountable to self; free time. All this in
addition to a long-term vision of a nice house in the country, kids in
private school, a lump sum in the bank, and still trading!”
– STIR trader
“Pitting my wits against the market; seeing things before others; staying
calm under pressure; having responsibility for myself and my own
actions; control; adrenaline rush; being my own boss.”
– stock trader

Checking Your Motivations
As you start to uncover your motivations for wanting to be a successful trader,
take time to analyse them. See whether, if you were to achieve success, it does
in fact give you what you really want. Ed Seykota famously said that “everyone
gets what they want from the markets”. What is it that you really want?
Jérome Kerviel, the trader from Société Générale who lost $7.2 billion, was
alleged to have said that all he wanted was to, “become an extraordinary
trader”. Did he achieve his goal? Do you think that this is really the outcome
that he wanted? He is certainly extraordinary, and definitely received huge
amounts of publicity and coverage across the globe.
It is always interesting when I ask trainees why it is that they want to be
traders. Excitement and ‘the buzz’ is one of the most common answers they
give. And yet, trading rarely turns out to be the adrenaline fuelled high-octane
environment that they thought it would be – unless they are doing it badly!
Trading can be very exciting, and highly adrenaline-fuelled, and not in the
slightest bit profitable; so being clear on your motivations, and the impact of
them on your trading, is key.
Trading also poses an interesting psychological challenge: commitment to a
non-guaranteed outcome. When you place a trade you have no absolute idea
of the actual outcome. You are at best playing probabilities (and at worst simply
hoping!). Your trading results over time are a factor of the trades you place, and
therefore it is impossible with any great degree of certainty to predict
profitability and income levels; the outcomes of your trading are not totally
under your control. When pursuing the trading path you will no doubt have


STRATEGY 3: Fuelling Success – Motivation and Commitment

some goals and outcomes that you would like to achieve – trading could well
fulfil all of them and more, but there is no guarantee. Putting in significant
amounts of effort over long periods of time can be difficult when there is no
certain level of reward at the end. Indeed in trading you can work extremely
hard and have periods of no financial reward. Can you imagine what would
happen if that occurred in an ordinary job!
As a trader you need to have clear goals set out, have positive expectations and
a high self-belief, be able to work hard over time, all the while knowing that
you may – potentially – not achieve those goals at all, or not for some time.

Beyond Motivation – Drive
“If you turned up to trade and someone had boarded the door up in a cartoon
fashion, what would you do? I’d smash through it. If you would choose to go
home and come back/call later, stay at home.”
– Matt Blom, futures trader

Motivation is powerful, as we know, but it can be variable and subject to our
moods or events. Most top performers depend on something stronger: drive.
This manifests itself in a real interest and love of trading – being fascinated and
passionate about what you do. It underpins your ability to achieve, and helps
to sustain strong focus over time; as well as giving you what K. Anders
Ericsson, in his research on creating expertise, calls “the rage to master”.
Drive, to me, is pure, and occurs when you are really engaged in your
occupation and finally have a natural motivation – you are not having to
motivate yourself.
Motivation will become drive given sufficient enthusiasm, time and hard work.

Exercise: Enhancing Motivation
Can you think of a time when you were really motivated to do
What were your thoughts? What did your inner dialogue and mental
imagery consist of? What feelings did you have?


High Performance Trading

Holding strong mental pictures, combined with positive inner dialogue,
can be a very powerful motivator! Take some time to identify your core
trading motivations; write them down, and read through them regularly.
As you do this, create a kind of mental image to represent each of the
motives. Attach the same powerful associations to it that you experienced
when you recalled your previous motivational event.

Trader Top Tips

“Remember why you got into trading in the first place and what you hope to
achieve from being here. Focus on your goals.”
– Andrew Nuthall, oil trader
“Motivation is very important, especially early on. Remember why you wanted
to be a trader, what it is you wanted to achieve. This will help to engender
discipline and help you when times are tough.”
– Stewart Hampton, trader
“I have written my own motivational statement at the start of my trading plan
and have it pinned to the wall beside my computer. It’s cobbled together from
different readings and lessons I have gathered over my trading journey. It works
for me.”
– Brent Evans, trader

Practical Strategy: Reinforcing Your Motivation and
Make a list of your core trading motivations.
Read through the list regularly to reinforce your motivation and
commitment to being a trader.
You can adapt this process by writing a powerful and compelling
motivational statement/paragraph and reading through this.


Develop a Compelling Vision of Trading

“Develop a vision, a compelling future that excites and inspires
you, and focus on it daily.”
– Anthony Robbins, motivational speaker

Success Starts With a Dream or Vision
ost successful people and high achievers started their journey with a
dream, a compelling goal, or a purpose. Having a dream or purpose
is important in maintaining long-term motivation and drive, and is
often the deciding factor between people who give up, and those who carry on,
when they face setbacks.


If your purpose or mission is big enough, no obstacle will get in your way.
Trading can become very consuming and a large part of your life. In the pursuit
of achieving and sustaining trading success, it is easy to get tunnel vision and
to narrow your attention onto trading and nothing else.
So one activity that I like to undertake with my own clients is the Design Your
Life exercise. At times it can feel like trading is life; however, we must
remember that trading is only a part of life. In order to provide balance, but
also to provide a compelling future to work towards – to give a value and
purpose to your hard work, and sustaining high performance in trading – it is
very useful to take the time to consider and be clear about how you would like
your life, in the round, to be. I was first introduced to this Design Your Life
practice by Sportsmind director Jeffrey Hodges.

Plan Your Vision From the Future
“I like the dreams of the future better than the history of the past.”
– Thomas Jefferson

Most people live life reacting to events – feeling as though they are acted upon,
controlled by other people and external forces. It does not have to be that way.
It is possible to feel in charge of your life, to feel as though you’re the one
deciding what you do, where you go, who you’re with, and how you spend you
time. The only way to achieve this is to decide now to design your life!
Your biggest challenge in completing this exercise will be in freeing yourself
from the limitations and barriers that you impose on yourself based on what


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