Coaches Can Take Portfolio Managers & Traders To The Next Level

Ask traders if they would like coaching to improve performance and one might either get a quizzical look or “Coaching? What’s coaching going to teach me that I don’t already know?”

It’s understandable that many are skeptical about the value of coaching and resistant to it since there are some misperceptions about what coaching is. Especially among traders, portfolio managers and other high achievers. Coaching is not psychotherapy. It’s not instructional training for development of technical skills. And it’s rarely about giving advice or simply handing out a script entitled “7 Habits of Successful Traders”.

What is coaching?

Coaching is the process of helping individuals achieve sustainable behavioral change to enable consistently better thinking and decision making.

So how can traders be coached into better thinking, decision making and improved P/L’s?

Consider a few common challenges that most traders and portfolio managers face in their jobs:

  1. Performance related stress: This is an always on 24/7 pressure that traders signed-up for when they made their career choice. It seeps into their very core and impacts every aspect of their professional and personal lives. The daily P/L swings bring out many different emotions. Greed, fear, highs, lows, anger, relief and so on. They say a trader dies a few times each day only to be reborn to fight another day. The trader’s persona, focus, attention span, relationships, and whole way of being evolves over time. Traders learn to deal with adversity and hopefully achieve balance in their lives. Some are naturally suited and thrive on this adrenalin rush. Many others are not.
  2. Lack of emotional detachment: Rare is a trader who has never been a victim of having “fallen in love” with a trade idea or a position. Where the need to be right, or the fear of being wrong, is so strong that traders often cannot let go of a losing idea or position despite mounting losses and evidence that they have on the wrong trade. Such emotional attachments, if frequent, often make for short careers. Other forms of emotional attachments, excessive anxiety and obsessive monitoring of markets outside of business hours, negatively impact work/life balance and over time result in “burning out”.