Wednesday, December 19, 2007

Greatness, Happiness, and Performance: What Contributes to Success

What It Takes To Be An Elite Performer: It's not something you're born with; greatness develops over time. Intensive skill rehearsal is a major component. I've gotten pretty good at identifying who will succeed in a trading career and who won't. The successes are those that work intensively on their trading--when they're making money.

Intelligence: Researcher Dean Keith Simonton hits it on the head: "My view of intelligence is basically a Darwinian one. It's based on sort of the old Functionalist notion that goes way back to Francis Galton, that says that there are a certain set of cognitive capacities that enable an individual to adapt and thrive in any given environment they find themselves in, and those cognitive capacities include things like memory and retrieval, and problem solving and so forth. There's a cluster of cognitive abilities that lead to successful adaptation to a wide range of environments." Successful traders are intelligent in Simonton's sense. They don't just master one pattern or market environment, but adapt to changing market conditions and thus build a career.

Well-Being: Historically, psychologists have spent more time and effort studying dysfunction than positive emotion. Recent studies have utilized a range of methods for evaluating the positive emotional states that people experience. One of the most interesting findings is that of adaptation: when people have good things happen to them (such as winning a lottery or getting a new home or job), they quickly adapt to the new circumstance and wind up with the same overall level of well-being that they experienced before. Similarly, people can experience sizable setbacks, including even the loss of a limb, and return to their prior level of well-being once they've adapted to the change. This helps explain the persistent motivation of successful traders. In an important sense, they never totally feel satisfied with their performance and wealth--they adapt to their new levels of profitability and return to their prior levels of well-being--so they're always trying to accomplish more and reach new levels.

What Makes You Happy: Research suggests that your base of comparison is an important element in your happiness. If you compare yourself to a reference group that makes your accomplishments seem small, you're more likely to be unhappy than if you have more realistic criteria for evaluating your performance. By comparing your current performance to your past, you can focus on the process on making improvements and manage your own well-being. Why is this important? Research finds that happy people are more likely to be successful.


Self-Confidence and Performance

What We Can Learn From Sport Psychology

Transforming Stress Into Well-Being