The Mental Strategies of Top Traders: The Psychological Determinants of Trading Success

5.8. CASE STUDY ON BEING COMFORTABLE WITH DISCOMFORT

In this interview, I am talking with Randy, a seasoned portfolio manager with whom I have been working for several years. He is extremely conscientious and always eager to learn more about how to handle his emotions so as to improve the efficiency of his trading and portfolio management. Here he illustrates that mastering one's emotions is critical and not an impossible feat, even in the most difficult of times.

Kiev:

I have been talking to a whole bunch of people. The macro factors are roiling the markets, and you have to get the events right in your assessment. If you get the events wrong, you lose even more, and the macro accentuates the fact that you are wrong. These are very difficult times, and a lot of people are giving up.

Randy:

Yes. It's happening quite a bit.

K:

How are you dealing with the emotionality of it?

R:

I think it's a great opportunity. I made fourteen million dollars in February [2008], the most volatile month on the calendar in the past five years because this is the stuff that I have been waiting for. You know when you are trying to wait for a fast pitch, and you see a hundred of them come at a time; you hit them out of the park. It's been like spring training. The guy is throwing me fastballs, and I am ready for them. I don't understand why everyone is afraid of getting hit. We knew that there were going to be fastballs. Not everything is a softball.

This is exactly how people lose a lot of money. I ...