harriman house ltd part one: becoming bulletproof 1 1. why bulletproof? 3 2. the bulletproof...
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harriman house ltd 3 Viceroy Court Bedford Road Petersfield Hampshire GU32 3LJ GREAT BRITAIN Tel: +44 (0)1730 233870
Email: firstname.lastname@example.org Website: harriman.house
First published in 2020. Copyright © Steve Ward
The right of Steve Ward to be identified as the Author has been asserted in accordance with the Copyright, Design and Patents Act 1988.
Paperback ISBN: 978-0-85719-667-5 eBook ISBN: 978-0-85719-668-2
British Library Cataloguing in Publication Data A CIP catalogue record for this book can be obtained from the British Library.
All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without the prior written consent of the Publisher.
Whilst every effort has been made to ensure that information in this book is accurate, no liability can be accepted for any loss incurred in any way whatsoever by any person relying solely on the information contained herein. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, or by any client or employer of the Author.
To Herluf and Merete
C O N T EN T S About the Author ix
Preface: A Guide to this Book xi
Part One: Becoming Bulletproof 1
1. Why Bulletproof? 3
2. The Bulletproof Framework 10
Part Two: Ups and Downs 19
3. The Nature of Trading 21
4. Get Good at the Downs 30
Part Three: Commitment 37
5.Mindset Over Matter 39
6. Take Committed Action 48
7. Know Your Values 56
Part Four: Risk and Uncertainty 65
8. Manage Your Risk 67
9. Embrace Uncertainty 74
10. Plan for the Worst 80
B U L L E T P R O O F T R A D E R
Part Five: Focus 87
11. Train Your Attention 89
12. Focus on the Process 97
13. Control the Controllables 105
Part Six: Discomfort 113
14. Get Comfortable With Being Uncomfortable 115
15. Unhook from Difficult Thoughts 125
16. Work With Your Stress-Based Emotions 134
Part Seven: Confidence 143
17. Build Confidence in Coping With Difficulty 145
18. Stay Calm in Critical Moments 154
19. Don’t Beat Yourself Up 164
Part Eight: Flexibility 173
20. Find the Opportunity in the Difficult 175
21. Get Good at Adapting to Change 184
Part Nine: State Management 195
22. Monitor Your Stress and Fatigue Levels 197
23. Master the Art of Recovery 211
24. Develop Your Physiological Fitness 225
25. The End – and a Beginning 239
A B OU T T HE A U T HOR
steve ward specialises in helping people working in trading, investing and banking to enhance their risk-taking, improve their decision-making and to achieve and sustain high performance by utilising the latest science, research and practice from performance psychology, decision science, neuroscience, behavioural science, physiology and philosophy.
Since 2005 he has provided specialised coaching, training and consultancy services to traders and fund managers at some of the largest and highest-performing investment banks, hedge funds, asset managers, commodities trading houses, utility companies and proprietary trading groups across the globe.
Prior to starting his work with the financial sector, Steve provided sports psychology coaching to elite athletes and teams in over 30 different sports across the globe, with a particular interest in extreme,
B U L L E T P R O O F T R A D E R
action and adventure sports. He has also provided psychological coaching for professional poker players.
Steve is the author of High-Performance Trading: 35 Practical Strategies and Techniques to Enhance Your Trading Psychology and Performance, Sports Betting to Win: The 10 Keys to Disciplined and Profitable Betting and Tradermind: Get a Mindful Edge in the Markets, and has written many articles for leading trading publications. He co-managed a team of 45 proprietary traders in London, was the consultant trading performance coach to the BBC TV series Million Dollar Traders, and spent a number of years trading stock indices and FX on his own account.
BULLE TPRO OF
1 W H Y B U L L E T P R O O F ?
“I want to bulletproof myself.”
It’s September 2014 and I’m sitting in the boardroom of a hedge fund in the West End of London having a one-to-one coaching meeting with a new client, the hedge fund’s founder. He’s a successful trader with an incredible track record going back many years. I’m dressed in my standard uniform of casual trousers and shirt. Across the table he sits in shorts and polo shirt, notepad and pen at the ready.
After an exchange of initial pleasantries – primarily a discussion about the weekend’s football results – I prepare to ask my first question. I am aiming to find out more about the trader, his key biographical details, trading history, trading style and strategy – and what outcomes he would like to see from the coaching programme.
“What do you want to achieve?” I ask.
“To be able to deal with my trading performance and results with greater equanimity,” he replies.
“And why now?” I ask.
B U L L E T P R O O F T R A D E R
“I have never really had an extended run of bad performance. But I know that statistically one is likely to happen. I have to prepare myself for that. I need to make sure I have the skills to handle such an event. I want to bulletproof myself.”
“How would you know if you were… bulletproof?” I said. I hadn’t heard that phrase used like that before. It stuck with me.
“I would have fewer negative thoughts,” he said. “I can get obsessed about decisions I have made, especially when I have lost money or am not making it. I can be a perfectionistic. When I fail, I can’t stop thinking about it, and I know that mindset is not helpful. Sometimes I am just sat there telling myself ‘what a f****** idiot’ over and over again. My emotions can be very negative. Sometimes I feel pretty depressed. Trading can make me feel sick.”
“And what would be the benefits of being bulletproof?”
“Ultimately I think it is about keeping me in the game. I love what I do, and want to be doing this for many years. I don’t want a big negative event to take me out. But I would like to be able to change some of my thinking and how I feel when things are not going well.”
We went on to define in greater depth what being ‘bulletproof ’ meant for him – identifying particular situations where it would be useful and looking at what bulletproof behaviours might be. We explored some tough situations he had already faced in his trading career and overcome. It was important to discover his current level of bulletproofing. Any trader or fund manager who has traded the markets for a long period of time will have developed a certain level of resiliency to still be in his or her seat trading – even if they feel they’re currently in crisis.
Over the next 12 months I helped this top trader develop a range of strategies that increased his ability to deal with tough trading situations. We were ‘lucky’ in that during our work together there were a couple of significant market events that had a big negative
1 . W H Y B U L L E T P R O O F ?
impact on his results – and provided great opportunities to practise what we had been working on together.
Our work included:
• learning about the importance of anticipating and planning ahead for challenges
• the power of acceptance (of your situation and your experience of that situation)
• how to manage the mind and the emotion-driven thoughts than can arise in times of difficulty
• understanding perception – and how the way we see a situation creates our reaction or response to that situation
• being able to see the opportunity within a challenge
• being comfortable with the worst-case scenario.
We also undertook some simple mindfulness-based meditation practices to increase in-the-moment awareness, gain greater objectivity, lower emotional reactivity and increase equanimity.
Lastly, we spent some time using biofeedback. This involved learning techniques for increasing the strength of his nervous system, making him less reactive to doses of stress – particularly the impact of it on his decision-making.
All in all, he developed an extensive toolkit that robustly increased his level of bulletproofing. Importantly, he worked at using the tools provided – he practised the skills – and as a result attained a level of trading resilience beyond his initial expectations.
A key part of this is because he spent time and energy developing the skills to become m