Wednesday, April 18, 2018

Creating Your Own Trading Culture

Interesting research that I summarized in a recent article finds that the single most powerful factors determining the success of romantic relationships are acts of kindness and giving.  Conversely, relationships that end poorly are characterized by sarcasm, contempt, and negativity.  When we give, we encourage gratitude in others, and that gratitude leads others to then also engage in acts of generosity.  

What is less appreciated is that this same dynamic plays itself out in the trading world.

Within the trading teams I've worked with at SMB, for example, results are dramatically better when team leaders coach junior traders and when those developing traders support the trading of their mentors.  "Each one teach one" is a virtual mantra for successful teams:  everyone provides value to one another.  Conversely, the poorest results I've seen at trading firms are achieved when developing traders are left to their own devices to "figure it out".  No giving and no receiving means a slower turning of idea wheels and a more tortured learning curve.

I see this dynamic among individual traders as well.  The successful ones cultivate networks of peers to share ideas and encourage one another.  It is not by coincidence, for example, that the Investors Underground live chatroom is also instrumental in Traders4ACause, a group that uses trading education as an opportunity to "give back".  When traders operate in a culture of giving, they are inspired to also be givers.  Everyone wins.

Here's a great metric for your trading:  Who are you making better and how well are you doing it?  In giving value, you attract the right people and that, in turn, provides you with more and better resources.  Some of the best ways of working on our trading is to contribute to the trading of others.  Some of the best ways of working on ourselves--enhancing our health, well-being, and success--is contributing to others.

Further Reading: