Chapter 6: Emotional Blind Spots

“No algorithm can quantify emotional intelligence or self-awareness.”

Unfortunately for those of us who are in the business, some of the most famous people associated with trading are the ones who have garnered the most press for horrendous and sometimes criminal activity. Names such as Kerviel, Madoff, Hunter, and Leeson conjure up images of some of the most fantastic losses of capital that the world has ever seen. You’ll never see a headline that says, “Trader Made 12% for 30 Years with Only 2% Drawdown: Clients Kiss His Feet, Rename Their Children, and Hand over Their Wives Willingly.” But you’ve seen how many pair of shoes Madoff owned.

The top brass of some quantitative trading firms—the Quants, as they’re ...

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