Today we will have the first of two sessions in which the applications of neuroscience to trade and neuro financing are discussed. Brett N. Steenbarger, Ph.D. Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University, an active trader for over 30 years, former director of trader development at Kingstree Trading LLC Trader Efficiency: Proven Strategies from a Trading Psychology Perspective (Wiley, 2007).
He refers to the feature columns on the trading markets website and several trade publications, including the magazine Futures and Options Funds.
Books on trading and peak performance
Alvaro Fernandez (Alvaro): Welcome, Professor Steenbarger. Why not start by giving us some context regarding your interest in trading efficiency and how he led you to your new book?
Brett N. Steenbarger (Brett): Thank you, Alvaro, for being here. I really enjoyed your last interview with Professor Gofer. My main interest is how to improve cognitive and emotional development among traders to help them become more successful. The psychology of trading - my first book - focuses on helping traders better manage their emotions, to ensure that decisions of the highest quality are made at all times. I wrote my last book to encourage and support traders who want to train and improve their abilities and improve their brain-room results, build their skills, strengthen their mental abilities and improve their work.
Alvaro: Please tell us about your new book. What promise and what are you trying to achieve?
Brett: All high-ranking people, regardless of the area, have some common attributes. This includes people in areas such as athletics, performing arts, chess, military, and medicine. I look at research into what makes people successful in these areas, find common factors for their success, and then apply the results to traders.
Alvaro: What are these common factors for top performers? And what distinguishes elite performers from the rest?
Brett: elite performers are distinguished by the structuring of their educational process. With a confident early age, they participate in an intensive learning process that is based on their natural talents. They find a niche — the field that these talents use — and become absorbed in a deliberative and systematic learning process that gives them constant feedback about their work. The recipe for success looks like talent, skill, hard work and opportunity. On the contrary, many people who do not end up performing at a high level are largely guided by practical considerations to enter this area and are not motivated to follow the same level of intensive and systematic training. (What Brett says reminds me of the training cycle that Professor Zull spent a few weeks ago).
Specific advice and training for traders
Alvaro: What specific tips do you offer to traders in your book?
Brett: Traders could better structure their learning and learning. I want to encourage them to see that “learning at work” is not a substitute for breaking down skills into components, drilling them, receiving feedback on performance, and continuous changes and improvements. In all areas of activity, elite performers devote more time to practice than to implementation. You need to protect and optimize this practice, training time. The average trader does not do this, and as a result, many traders lose their trading capital within 7 months after trading. As I said before, traders will benefit from more structured teaching and learning.
There are several elements for this:
- Tools: some simulation programs are very useful to allow traders to more quickly recognize patterns on the market. The ability to play and play back market days provides traders with an expanded screen time to speed up and deepen learning. Another set of tools includes biofeedback programs that help traders manage their emotions. Tools based on biofeedback can be very useful for managing our emotional states: judgment, planning, analysis, and reasoning.
- Reflection and feedback: traders who use programs to provide them with metadata in their trading analyzes of their winning and losing trades have significant data at their disposal. The patterns identified by these metrics help traders understand their strengths and weaknesses. Many times, based on success, it is more important than trying to change weaknesses. Training requires constant feedback - and traders must learn at all times.
- The role of teachers and coaches: in many areas, such as music and tennis, coaches help students break down their work into component skills, and then systematically work on them and combine them. A mentor is someone who can structure the learning process for a developing artist and help them move from being a newcomer to being competent to be an expert.
To be continued in Part 2 ...
Copyright (c) 2007 by Alvaro Fernandez
