Trading: Luck, Leanring and Ability A🧵

Imagine you turn up at the biggest poker tournament in the world with a stack of cash having learned the basics and the rules. Things start well (luck favours you) and you think ‘wow I’m good at this’.

Bulled by your results
1/15 you start committing more cash to the game (Intuitively it makes sense, you’re good at this you, so why not go larger). Meanwhile the older more experienced players continue in their slower way. They are more picky in the hands they play, and are less drawn to the noise.
2/15

The Challenge of Comparing Trading Performance Across Different Time Periods Can Be Misleading: The Sailing⛵️Analogy

A🧵

Comparing trading performance from one period to another is not only an activity fraught with challenge, but often the act of comparison
1/12 itself can itself be the catalyst for a period of sub-optimal trading performance.

To illustrate this, I will use a sailing
analogy:

Imagine a sailor⛵️ who sails around the world 🌍 in around 80 days, having had favourable winds💨 and sailing 🌊conditions.
2/12

“How I almost missed the most profound moment in my trading career.” A thread 🧵

In the year 2000, and 13 years into my trading career, I was a senior trader on the rates desk at German bank Commerzbank in London.

My career had been a series of ups and downs, as is
1/24 common in the world of trading. I happened to be on a low at this point. The move to Commerzbank hadn’t gone well, my trading performance had stalled, and progress had become regress.

It was at this time a new boss joined us. He was a terrific trader and a
2/24

A thread on the mindset of trading🧵📈📉

My new book 'Mastering the Mental Game of Trading' was published this week, and is off to a flyer, reaching the no 1 best seller spot for 'Online Trading and Investing' on Amazon UK.

While the book explores trading, its primary
1/16 focus lies in cultivating the mindset, beliefs, and attitudes essential for achieving high performance as a trader or investor, making it a valuable resource for anyone aspiring to excel in their work as a trader or investor.

A recurring theme emphasized throughout the
2/16

"Why Great Trader Embrace Doing The Boring Stuff‘
A 🧵

It’s often the case that traders defer putting off the things that could make them better, stronger, more effective, or more productive, because, well, quite simply, they can’t be bothered.

This stuff, these actions
1/18 and activities, are often uninteresting, not exciting, unsexy and take time, effort, and energy. As a result, people usually can't be bothered to do them, even if the intention is there. Even though they know they should, they just don’t, can’t, or simply won’t.
2/18

One of the attractions of being a retail trader, is doing it for yourself, from home, with a very low cost base. But, paradoxically this is also one of the biggest obstacles to a traders chances of success.

A ‘long’ but hopefully useful🧵

1/25 It’s impossible to say to what degree working in a trading office makes a difference to a trader’s chances of success, but I’d estimate the odds of success are maybe 20-30 times greater. That may even be on the conservative side of the estimate.
2/25

The AlphaMind Podcast - A 🧵

Mastering trading goes beyond understanding the markets and having a system/method. It also requires the development, and sustaining of, mastery of yourself. If you have the former and not the latter, success will remain elusive or fleeting.
1/5 The AlphaMind Podcast delves into this aspect.

Through powerful conversations, we explore the trader's relationship with markets, their influence on a trader’s psyche, and the vital human skills needed to navigate the intricate and unpredictable world of financial markets.
2/5

A🧵

When I coach outstanding traders, I try to assess what is it that underscores their success. There’s always many factors that are contributory, but time and again there’s one quality that always shows up. Their ability to ‘Let-Go’.

It sound easy and glib, it’s neither.
1/7 The ability to Let-Go is far more significant to success than intellectual or academic prowess, or market knowledge, or the quality of data and news one has access to. It gets to the very heart of who we are. We are always holding on to something, often connected to the 2/7

🧵In my work as a coach, I’ve got to meet some incredible traders over the past few years who work for real prop firms. I mean physical ones where you sit alongside and interact with other traders. You can read about 3 of the traders I worked with in the most recent 1/ Market Wizards book - Unknown Market Wizards.

Since then I’ve worked with many more across the world, some of them have progressed in a few years to become 7 and even 8 figure traders. In some cases they could retire in their early 30s, not that they plan to. 2/

A longish AlphaMind 🧵

Why, at AlphaMind, do we bleat-on 🐑about the human side of risk performance? And why do we think it is so crucial to success ✌️in trading?

Let’s start with a real world example.

A few years ago a potential client walked🚶‍♂️into AlphaMind Towers 🏢

1/19 He was keen to solve a puzzle🕵️‍♂️.

That puzzle was: Why was he performing so badly when his calls were so good.🆘

This trader was no ordinary trader. He had 15 years in the markets behind him. 12 at an investment bank then 3 at a major hedge fund.

2/

A 🧵 on learning to become a trader.

Many new traders make the mistake of assuming you can learn to trade from a book or course. Whereas in reality, what you get from these are an introduction to trading.

Whilst naturally, you have to start somewhere, it’s easy to be
1/15 fooled into thinking, you are ready to do it.

A good analogy is learning to play guitar this way. You may be able to play a few simple notes or chords, after a time, perhaps even do a decent rendition of a tune. That doesn’t make you a guitarist. And doesn’t endow you with
2/15

The real quality it takes to succeed at trading may surprise you (A long thread)

Having coached many great traders I have gained a deep insight into what it takes to be a great performer in the trading world. Last year, one client was named HFM Asian Hedge Fund Manager 1/32 of the year, one was named in the Hedge Fund Journal’s 50 Leading Women in Hedge Funds and the year before, I had 3 clients featured in Jack Schwager’s latest Market Wizard’s book. In addition, I have worked with many sensational retail and institutional traders who I have 2/32

@MattThomasTP This is such an amazing and profound quote. I’ve thought long and hard about it.

I’m writing a book at the moment, and the quote gets heavily featured in it. My own interpretation is that he is talking about needs at a deep psychological level and the meeting of these needs.🧵 @MattThomasTP 2/ Maslow talks about every human having unconscious needs. These ascend from deficiency needs, (needs we may be lacking) such as psychological needs and physical needs like food, shelter, security. Once these needs are met we can move on to higher needs such as love,

Being effective & productive@in the face of radical uncertainty, is the very essence of trading.

Trading success requires you to learn how to act & make choices, in the face of radical uncertainty.

Yet how much effort has gone into this in your trader development? A thread🧵 I was a trader for almost 25 years,. I’ve been a professional coach, working with traders on performance, for the past 13 years.

My clients span the world of trading, from high end pro, to high quality retail, in every market, product, style.

I’ve faced my own battles
2/18

A 🧵 on trading👇

Despite knowing that there’s no magic system, secret formula, or special indicator that leads to trading success, I still spent many years as a trader, foolishly searching for them.

Then, after 13 years, I started working with a coach. This was the start
1/12 of a dramatic change in my trading fortunes, that powered the next 10 years of my trading career.

It was ironic, because I had probably known that the answer always lied within me, hence my fascination with psychology, self-improvement and personal growth.

But knowing it
2/12

1/ Is there a dominant personality type that succeeds in trading?

A Thread🧵

At AlphaMind we’ve analysed hundreds of successful traders using personality psychometrics over many years. We have covered the full spectrum of personality types; from excitable & emotional to 2/ calm & composed, from wary & cautious to daring & adventurous.

What we’ve noticed is that all these types can and do succeed.

No personality type has the edge, however there are conditions and contexts where each of the various personality types do have marginal edges

Fear in Trading - A thread🧵

Last week I posed this question in a poll: ‘When running a trading position overnight. Which of these is the predominant feeling you have prior to checking the price the next morning?’

Thanks to everyone who took part.

The poll can be seen here👇 2/ As you can see, 44% were ambivalent, but of the balance, 80% feared the market had moved against them versus those who thought it would have gained.

This fear response in trading matters because fear-based feelings alter our behaviours in ways that can undermine our trading.

AlphaMind:The Market Wizards Episodes

Our recent chat with Linda Raschke @LindaRaschke bit.ly/3a7L8gU follows others interviews with traders from @jackschwager's iconic Market Wizards books over the past couple of years.
@MarketsWizards @AlphaMind102

Thread 🧵1/5 These included an interview with Jack Schwager himself that coincided with the release of Unknown Market Wizards in 2020. That hugely popular episode can be heard here: bit.ly/38tvdZP

We also featured interviews with a number of the traders featured in that book👇
2/5

‘It’s Not The l Markets We Conquer, It’s Ourselves’ - A thread 🧵

1/ Readers of my tweets have seen me use this quote many times. This thread explains why for me this captures the biggest and most difficult struggle every trader faces, and why attending to this can have a 2/ bigger impact on a trader’s performance and their likelihood of success than any other aspect of trading.

The quote is an adaption of a one by mountaineer Sir Edmund Hillary.

Hillary’s quote is ‘It Is Not The Mountain We Conquer, But Ourselves’.

The quote, defines the

Trading forces you to learn about your ‘self’ at a level of depth that is astonishing 👉thread🧵

Anyone who persists in trading for long enough, comes to realise that they are learning more about themselves and who they really are, than perhaps in any other activity they 1/20 have engaged in.

The reason for this is that the 3rd cornerstone of trading is ‘self mastery’. - See the attached Tweet. 👇

Without gaining a high degree of ‘Mastery of Your Self’, the other 2 cornerstones of trading will always be carried out in sub-optimal ways. 2/20

https://twitter.com/alphamind101/status/1519213528573435904

Your trading approach, system or method, at first, is likely to be someone else’s. That has to be the case, because whether you learned it from a book, a course, or from a mentor, it is by default someone else’s.
🧵/1 Now as time progresses, you will have to morph or change that initial system or approach into something personal to you. You have to evolve your own trading style.

Eventually, and assuming you last the journey, that system will either be similar to the initial one, but
/2