Decision and Performance Architect Discusses How to Keep Your Trading Mindset In Check.

What does it take to get your mind right for investing and trading? We brought in a former trader and current performance coach who ran two trading desks and was also a consultant to the hit Showtime drama ‘BILLIONS’ for her understanding of the traders mind.

Denise K. Shull MA, Decision Coach and Performance Architect, leverages her training in psychological science to solve the challenges of mental mistakes, confidence crises and slumps in Olympic athletes and Wall Street traders. Denise is known for her uncanny effectiveness in coaching, training and assessing for the X factor of human performance under pressure. A former trader and trading desk manager, Shull’s Wall Street career began in 1994 with traders from the CBOE. She then ran two equities desks before becoming a member of the CME. In 2004, she also began translating neuroeconomics — the new science of the brain and risk — into investing and trading profits at banks, hedge funds and proprietary trading firms.Her 2012 book, Market Mind Games, has been described as the “best of its genre” and a “Rosetta Stone of trading psychology”. In 2015, she was invited to consult on Showtime’s drama BILLIONS and in 2016, Bloomberg’s Tradebook delivered their trader brain exercise game based on her work.

What are the three most important routines for a trader? — howardlindzon

Thinking through what the market MAY do and why, thinking through targets, stops, and reviewing what worked/didn’t and why.

Denise — great to have you! Have a ton of questions, but what is the biggest reoccurring theme you see in struggling traders? — michaelbozzello

Hey Michael, great question. I think it’s forgetting/never knowing/not realizing that the market is made up of human perception.

Wendy! Tell your husband to return the evidence from Dr. Ari, not fair he has your session notes. — BobbieAxelrod

NO kidding!

Are there any ‘best’ mental exercises/practices that you’ve found work to improve most traders? — StocksAndStones

Learning to recognize/evaluate senses, feelings, and emotions as a data set.

What interesting question did they ask you for “Billions”? — FamisDave

Asking me “What really made me tick”?

What is a common trait do you tend to notice in high performance traders? What separates them from the rest? — ss2bull

They understand the market as a human animal. They listen to their experiential knowledge (intuition), yet separate it from impulse.

When a trader is struggling, what’s the one trait you see in the best traders that lets them rebound quickly? — OffbeatOperator

The ability to go back to the beginning of the struggle and work through the regret, disappointment, and self-criticism.

How has HFT changed your field? Do you spend time analyzing the minds of HFT coders & have you found any success? — Jayhead13

Years ago I got on the ‘quant circuit’ and they were very motivated to understand backward induction — predicting humans they tweek too. Sometimes a LOT. They can effectively be discretionary with a robotic arm. They have to realize, that it’s not 2+2 = 4… a lesson for many traders. No one is going to find a secret math formula.

What are the top 3 habits of a great trader? — DirexionShares

1. Having a concept of the market — understanding why it does what it does (for oneself).
2. Finding strategy that makes sense for your personality, timeframe, way of perceiving info, and need for certainty
3. ACCURATE debrief. (Don’t skip it and don’t use it as a self-flagellation mechanism.)

How would you recommend implementing mechanics & routine to separate from the emotion? — HeyShoe

Give up the idea of separating from emotion. Emotion itself never made or lost a dime. Only acting it out did that.

You rock. It would be great to know how one can maintain flow all the time in your experience.?— justjake

Sleep, exercise, mental breaks, verbalizing fears and frustrations in the most accurate words possible.

How do our preconceived notions of risk/reward impact successful trading? — Lonesome

A lot! What is ample reward or excessive risk is different for each one of us. Figure out what it is for you. Knowing oneself — both from a strategy POV and from a strength/weakness/style POV is an edge.

Are the brains of good traders wired differently? They don’t feel much pain loosing and euphoria when winning? — moongraber1

Brains are not wired in a fixed way but neuroscience shows it is predicting other people that underlies great trading.

I like your mission. What are the Big 3 emotional mistakes and what’s the most effective way to modify behavior? — bearcharts

Thanks…I don’t actually think emotional mistakes is a good way to think about it. Let me try to explain — It’s decision mistakes. Emotions mask as the enemy because we all misunderstand their role and value. Without emotion, you can’t make a decision. Confidence, conviction = feeling and emotion respectively. Learn to judge your confidence on a spectrum. Panic to overconfidence. Develop the habit of knowing where you are and why.

How did you help the show Billions? What exactly did they need to show people? — scheplick

I told them a bunch of war stories… and helped Maggie understand the science behind what I do.

How to deal with overtrading as well as with developing patience for not clicking when there´s nothing to click for. — michelfraire

AHHH! yes! Learn to recognize the impulsive feelings and put them into all kinds of words instead of DOING them. In other words, telling yourself 2to be patient is unlikely to work — as u know. Work WITH the feeling of impatience. Also, project the future feeling. How will I feel if I click on this? Fight the impulse with another future feeling.

What is your take on $TSLA stock? Thank you. — prajesh

This is not my thing but I have two hedge fund clients who are short it. But seriously… don’t take my word for this!

Hey @Stocktwits …realized no one asked about goals, but be VERY careful with the idea of $ per day. Rarely works…trade the market moves not the money.

Hope this helped. Feel free to check out therethinkgroup.net for more on the blog etc.

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