Bulletproof Trader- Notes and Review

As part of our 100 club trading education, we had a special guest speaker last week who spoke in great detail about some of his ideas

Bullet Proof Trader is the latest book from renowned psychologist, author and elite performance coach, Steve Ward.

Although the book is primarily directed to and references financial traders, it is still very relevant to the sports trader and there are many useful exercises contained within it.

The core concept of the book is how you as a trader can become ‘bullet proof’. This phrase is borrowed from one of Steve’s clients and essentially means to become mentally resilient enough to cope with setbacks and challenges that come your way during your trading. That is not to say that bulletproof means immunity to emotion. Far from it. In fact, Steve advocates a number of strategies to embrace and understand how our emotions affect our trading decisions.

The book draws on concepts from popular psychology, behavioural science, mindfulness and philosophy (in particular, the Ancient Greek Stoic school of thought). 

You’re challenged to uncover what causes you stress in your own trading. Through dozens of examples of experienced traders in the financial markets, we discover similar patterns of behaviour that many traders follow.

I found myself nodding my head along to many of the concepts in the book and how they relate to my own journey in sports trading. I am sure that will be the case for you too. The book is written in a very accessible style and key questions are peppered throughout. You are invited to think about who your influences are on your own mindset?

You’re asked to reflect on how you think about stress and how you can shift your perception of stress as something that’s a hindrance, to something that is necessary and expected. Through doing so, you can become better at managing stresses and reducing the impact that stress has on your trading. Numerous studies show that perception of stress is what impacts our Health, not necessarily the stress itself and Steve gives several examples of this. 

How do you react to mistakes? Steve gives examples from medicine, where a low tolerance of mistakes leading to people not learning. So the same mistakes are repeated so continue. However, in aviation, mistakes are shared to improve safety so performance actually increases over time. In essence, you can apply this to your own trading by learning from your mistakes and critically reflecting on them. 

Steve draws on the philosophy of the Stoics- who saw adversity as a mindset and sought to be  objective, unemotional and having clear judgment (All useful traits for a trader). 

Examples go beyond the trading floor and are applied from his work with elite performance athletes. An analogy is drawn in comparison to how athletes view encounters with a difficult opponent as a chance to raise their game. As traders, we can see our ongoing challenge with beating the market as something similar, and view the market as a ‘worthy rival’. 

The importance of taking committed action is stressed at several points. Everyone is motivated to succeed in training and say they will do whatever it takes but motivation can come and go. Commitment is a different thing. Do you only take the right steps when motivated and feeling good? Or even when your state of mind isn’t optimal? When losing money or tired?

If you commit to improve your trading even when feeling this way and this action can INCREASE your motivation. Committed action is unconditional! Either you are committed or you aren’t.

The ideas of mindfulness are something that I use in my own day to day life, so I was pleased to see it referenced in this book. Mindful activities are suggested such as breathing exercises and reflective awareness training. These are highly recommended before you start your trading day and can be as short as a few minutes or more lengthy for maximum benefit. Mindfulness as a technique can help us to reflect on our inner experience and understand why we may feel the way we do. It can also help us clear some mental clutter and energise us before we launch into a busy trading day. 

It is acknowledged that there is no guarantee of success and you must be prepared to accept the risks with no emotional attachment to the final outcome. This is a crucial point and something that is repeated in one form or another throughout the book. One phrase Steve uses is to ‘get comfortable with the uncomfortable’.

An idea from popular psychology applied to trading is that of the ‘pre-mortem’. The ‘post-mortem’ is an analysis of a trade gone wrong after it has happened. However, one suggestion is to do a pre-mortem. Before committing to a trade, spend some time analysing the potential outcomes and specifically the worst possible outcome. This is something that many traders simply do not do, but can have significant benefits for our decision making as we are taking a more round view of our potential risk.

Our confidence is built through action and a result of practice and experience. In fact, many studies have proven this fact scientifically, finding that the stress levels of experienced traders compared to new traders were lower when markets go against them. This implies that the more experience you have, the more you are able to cope with sudden market shifts as you have experienced them time and time again and seen that eventually things will go in your favour. 

Of course, to be a profitable trader, an effective strategy is needed. But to sustain this success in the face of adversity, mental resilience is essential.

Our edges can be temporary but our thinking is consistent. A change in our thinking can enable us to maximise our edges and become even more successful. Through the right combination of planning, reflection and regulation of our emotions, we can rethink how we go about our trading and reshape how we see ourselves as traders.

We need to rethink our view of a successful trader as how much profit they have made. It is tempting to do just this, but as we know, bad trades can win and good, well researched trades can lose. Through reflecting on our process, rather than our outcome, we can still achieve better outcomes without becoming fixated on the bottom line. We should look at all the aspects of our process to make it as strong as possible and in the long term, the rest will follow.

We need to be adaptable to change. The markets are fluid and dynamic and what worked a year ago may not work today. It is not enough to simply recognise these changes in the markets so we must be ready to actually make changes to our approach. Change shouldn’t be seen as a threat but an opportunity. It may not be an opportunity to earn initially but it’s still an opportunity to learn.

There are a wealth of other important concepts, poster worthy quotes and practical exercise you can do straight away. Bulletproof trader is an accessible introduction to the mental techniques you can use to achieve consistent success in your trading. It isn’t an overly long read. I listened to it as an audio book and it came in at around 5 hours listening time. However, you may want to re-read or re-listen to several parts again and again.

It reframes the trading experience, recognising what makes trading so unique and counter-intuitive but at the same time, still a professional job that you can apply professional principles to. Taking the time out to read this book will help you critically reflect on what can work for you. It might not take away all the frustrations you may have with your trading but it can at least help you to understand the root cause of them.

If you’ve read the book or some of these ideas resonate with you, let me know in the comments!


To listen to the interview with Tony Hargreaves and Steve ward, click here
To purchase a copy of Bulletproof trader, click here

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