Ward, High Performance Trading

Last week Steve Ward was the guest presenter in Linda Raschke’s winter lecture series. The webinar is archived on the home page of the LBR Group site.

Ward, a performance coach to both athletes and traders, is the author of High Performance Trading: 35 Practical Strategies and Techniques to Enhance Your Trading Psychology and Performance (Harriman House, 2009). The strategies and techniques are sorted into three categories: (1) planning and preparing for trading success, (2) decision-making, discipline and flawless execution, and (3) evaluation, analysis and improving and sustaining performance.

Ward’s book focuses on the practical. For instance, he writes that it is important to be able to recognize when you are at your best, in your ideal trading state. Trading “when you are in such states—or at least as close as possible—is important to achieving consistency in your performance. When you trade in states that are not conducive to trading it is not that you cannot make money or won’t make money, but that the chances of you trading well are reduced; and, importantly, your risk profile has increased.” (p. 99) So the trader should “check in” regularly—that is, rate himself on a scale of 1 to 10 to assess his current trading state. Good times to check in are “as part of your preparation before trading, after a significant loss or win, after a string of winners or losers, on returning to trading after a break for any reason, after making an error, [and] throughout the afternoon when tiredness and fatigue may become more prevalent.” (pp. 100-101)

Most of Ward’s advice is commonsensical but worth repeating nonetheless: traders have a penchant for flaunting common sense. Consider the case of increasing size. He writes: “Most traders I have worked with look at increasing size as a key performance measure, and (I would have to say) as a key bragging right! The important thing with increasing size, though, is to make sure that you are using it as a growth factor on top of your improving trading performance capabilities, and not instead of such progress.” (p. 263) And, he continues, when increasing size, “it is important to move from the comfort zone into stretch and not panic. … Let’s say you are trading four contracts and decide to double to eight. Imagine a typical loss but with eight contracts, and now imagine a string of losses with eight contracts—how does that feel? If a bit uncomfortable, then that is to be expected—if you want to throw up, then that is feedback! How about with six contracts? Five? Through using this process you can begin to get a feel for what trading size may be best—whenever in doubt, go for the smallest increment you can.” (p. 264)

Throughout the book Ward asks the reader to answer questions and perform exercises. A couple of examples: Can I raise my performance by focusing on and utilizing my strengths more effectively? Can I raise my performance level by developing my weaknesses? Or, Which feelings detract from your trading performance? How often do you experience these emotions? How do you deal with them?

Ward’s book is not revolutionary, but that’s okay. Traders don’t need to make revolutionary changes to improve their performance. A behavioral change here and there, freeing up a frozen mindset, keeping things in perspective. All can help.

Those traders who don’t have the luxury of a professional performance coach can still profit from second-best: informed self-coaching. Ward’s book (along with others such as Brett Steenbarger’s The Daily Trading Coach) is an inexpensive way for traders to learn to coach themselves to better performance.