Introduction

Too few of us are play-actors of our own ideals. We have strengths and talents, dreams and aspirations. But when we look hour-by-hour, day-by-day, not many of these ideals are concretely expressed. The days become months, then years, and—at some sad juncture—we look back on life and wonder where it went.

That could be you: the middle-age person looking back on how “I could’ve been a contender.” Or, you could live a different life script. You could become the actor of your ideals and live their realization.

If you’re thinking this is a strange introduction to a trading text, you’re right. This book doesn’t start with supply and demand, trading patterns, or money management. It begins with you and what you want from your life. Trading, in this context, is more than buying, selling, and hedging: it is a vehicle for self-mastery and development.

Every trader, whether he consciously identifies it or not, is an entrepreneur. Traders open their business and compete in a marketplace. They identify and pursue opportunity, even as they preserve their capital. Traders refine and expand their craft; they take calculated risks. As entrepreneurs, traders start with the premise that they bring value to the marketplace. Amid the inevitable disappointments and setbacks, the long hours and the limited resources, the risk and uncertainty, it can be difficult to sustain that optimism. It is so much easier than to keep one’s visions on a shelf and forego the daily efforts of enacting ideals.

Some traders, however, cannot shelve their aspirations. Like the moth, they’ll pursue distant lights even if it means an occasional singe. To those noble souls, I dedicate this book.

When I work with traders and portfolio managers at hedge funds, proprietary trading firms, and investment banks, I don’t tell them how to trade. Most of them trade strategies different from my own and know far more about their markets than I ever will. Rather, I figure out their strengths. I learn what these traders and managers do well and how they do it, and I help them build a career out of what they’re already good at. Just as fish cannot comprehend water, being immersed in it from birth, we typically lack an appreciation of our personal assets. Each of us is a curious mixture of skills, talents, strengths, conflicts, and weaknesses. But just as a new business must capitalize on the strengths of its founders, a career in the markets crucially hinges on the assets—personal and monetary—of the trader. As a coach, my role is to take traders out of their psychological water and help them see what has been around them all along: the assets that can provide a lifetime of dividends.

Never has self-coaching been more important for traders. As I write this, we have witnessed levels of market volatility unseen in the post-World War II period. Price volatility brings potential opportunity, but also risk. Traders who could not step back, recognize unfolding developments, and make adjustments have lost significant money. Those who have used the crisis to step out of the trading water, limit risk, and find fresh opportunity are the ones who are poised to reap those career dividends.

The book you are reading is intended to be your companion in this trading journey. It is organized in 101 lessons. Each lesson outlines a challenge and proposes a specific exercise for moving yourself forward with respect to that challenge. The lessons are intended as meditations to begin your trading day—coaching communications to help you enact the best within you. Eventually, as you read and live these lessons, the coaching communications become your own self-talk. You begin by play-acting the book’s ideals and end up living them and shaping them into your own. You become your own trading psychologist.

If reading a short passage each day and planting the right ideas into your forebrain helps you prioritize your life and trading goals—and if that in turn helps you make one less bad trade per week and take the one good one you would have otherwise missed—think of how you will personally and financially profit. But just as pills can’t work when they stay in a bottle, no one learns from an unopened book. The first step in becoming your own trading psychologist is to set time aside for self-mentorship—every day, every week—because that’s how behavior patterns turn into habits. The great individual is simply one who has made a habit of self-development.

So there they are, staring at you from the shelf across the room: Your ideals, all those things you’ve wanted to do in life. You look longingly toward the shelf, but you can’t reach it from your comfortable chair. Yet you hold a book in your hands. Perhaps that book can make that chair just a little less comfortable, place the shelf just a bit closer.

You turn the page.

The next step is ours.