Thanks to a savvy money manager for pointing out this article detailing how social intelligence is much more important in team-based success than IQ. Interestingly, people who are more skilled at reading emotions from the eyes of others are also significantly more effective in teamwork. Women also tend to be more capable at reading the emotions of others than men. One telling predictor of team-based success is the tendency to take turns in talking: effective people speak *and* listen.
What are markets but the outcomes of the collective decisions of others? We frequently make reference to market sentiment and changes in market character much as we would speak of another person. Is it such a far stretch to imagine that emotional intelligence helps traders know and manage themselves and social intelligence helps them read and respond to the actions of others? Some of the most successful portfolio managers I know do not engage in copious quantities of original macroeconomic or market research but are quite talented in picking out the best ideas from researchers and other traders. They are like the skilled poker players, who are classically intelligent (they know the odds of each hand); emotionally intelligent (they know their emotions and manage their risk taking); and socially intelligent (they can read the players around the table).
All of us have known traders who become so locked in their views they stop seeing and responding to what markets are actually doing. This may masquerade as "conviction", but it is actually socially unintelligent--not unlike harping on a topic in a conversation and alienating listeners. Research finds that social intelligence operates just as effectively in online environments as direct, interpersonal ones. Perhaps one of the boons of social media is the opportunity for traders--including female traders!--to leverage their skills at reading and interacting with others in generating new and better trading ideas.
Further Reading: Emotional Intelligence and Trading
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