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1. Why Bulletproof?

“I want to bulletproof myself.”

It’s September 2014 and I’m sitting in the boardroom of a hedge fund in the West End of London having a one-to-one coaching meeting with a new client, the hedge fund’s founder. He’s a successful trader with an incredible track record going back many years. I’m dressed in my standard uniform of casual trousers and shirt. Across the table he sits in shorts and polo shirt, notepad and pen at the ready.

After an exchange of initial pleasantries – primarily a discussion about the weekend’s football results – I prepare to ask my first question. I am aiming to find out more about the trader, his key biographical details, trading history, trading style and strategy – and what outcomes he would like to see from the coaching programme.

“What do you want to achieve?” I ask.

“To be able to deal with my trading performance and results with greater equanimity,” he replies.

“And why now?” I ask.

“I have never really had an extended run of bad performance. But I know that statistically one is likely to happen. I have to prepare myself for that. I need to make sure I have the skills to handle such an event. I want to bulletproof myself.”

“How would you know if you were… bulletproof?” I said. I hadn’t heard that phrase used like that before. It stuck with me.

“I would have fewer negative thoughts,” he said. “I can get obsessed about decisions I have made, especially when I have lost money or am not making it. I can be a perfectionistic. When I fail, I can’t stop thinking about it, and I know that mindset is not helpful. Sometimes I am just sat there telling myself ‘what a f****** idiot’ over and over again. My emotions can be very negative. Sometimes I feel pretty depressed. Trading can make me feel sick.”

“And what would be the benefits of being bulletproof?”

“Ultimately I think it is about keeping me in the game. I love what I do, and want to be doing this for many years. I don’t want a big negative event to take me out. But I would like to be able to change some of my thinking and how I feel when things are not going well.”

We went on to define in greater depth what being ‘bulletproof’ meant for him – identifying particular situations where it would be useful and looking at what bulletproof behaviours might be. We explored some tough situations he had already faced in his trading career and overcome. It was important to discover his current level of bulletproofing. Any trader or fund manager who has traded the markets for a long period of time will have developed a certain level of resiliency to still be in his or her seat trading – even if they feel they’re currently in crisis.

Over the next 12 months I helped this top trader develop a range of strategies that increased his ability to deal with tough trading situations. We were ‘lucky’ in that during our work together there were a couple of significant market events that had a big negative impact on his results – and provided great opportunities to practise what we had been working on together.

Our work included:

 learning about the importance of anticipating and planning ahead for challenges

 the power of acceptance (of your situation and your experience of that situation)

 how to manage the mind and the emotion-driven thoughts than can arise in times of difficulty

 understanding perception – and how the way we see a situation creates our reaction or response to that situation

 being able to see the opportunity within a challenge

 being comfortable with the worst-case scenario.

We also undertook some simple mindfulness-based meditation practices to increase in-the-moment awareness, gain greater objectivity, lower emotional reactivity and increase equanimity.

Lastly, we spent some time using biofeedback. This involved learning techniques for increasing the strength of his nervous system, making him less reactive to doses of stress – particularly the impact of it on his decision-making.

All in all, he developed an extensive toolkit that robustly increased his level of bulletproofing. Importantly, he worked at using the tools provided – he practised the skills – and as a result attained a level of trading resilience beyond his initial expectations.

A key part of this is because he spent time and energy developing the skills to become more bulletproof. I believe this is something any trader can do.

Coaching traders

I have been fortunate enough to spend the last 15 years coaching and training thousands of traders and fund managers across the globe at banks, funds, commodities trading houses, asset managers, proprietary trading groups, utility companies – as well as individuals trading from home.

I would summarise my role as helping my clients to trade at their best.

To do this I provide coaching, training and advice around risk-taking, decision-making, and achieving and sustaining high performance. I draw on research and practice from psychology, physiology, behavioural science, neuroscience, peak performance, decision science and – most recently – philosophy. All the while, I try to stay mindful of what actually works with real traders in real markets.

The result is a blending of the science of performance with the art of coaching.

Some clients, around 20–30% or so, come to me because they are performing well and want to sustain that level over time, or to move up to the next level, to stretch themselves in the pursuit of becoming their best trading self.

The vast majority seek support, however, because they are facing a challenge of some kind in the markets – a drop or stagnation in results, some psychological discomfort (thoughts or feelings) or an uncomfortable physiological response (stress or fatigue).

This imbalance reflects a number of factors: firstly, human nature, and our negativity bias. Secondly, how reactive traders are to their P&L, especially the ‘L’ part of that. Thirdly, how challenging and demanding trading the markets is psychologically and physiologically.

Tough times

Pre-2008 a great deal of my work in trading and investing was framed around maximising returns, increasing performance – going from good to great.

There was a growing sense that trading and investing psychology was creating a performance edge, and an increasing number of traders and fund managers were exploring its possibilities. Post-financial crisis, that focus on performance enhancement continued, but another theme came to prominence: managing stress, performing under pressure, dealing with setbacks, coping with challenges and change, sustaining performance.

In other words, resilience.

This has only increased in the years since. Redundancies, regulatory changes, reduced head counts, sustained or increased targets and budgets (with less resources), information overload, new technology, market structure changes and evolutions, not to mention a global pandemic and many of the above coming together all at the same time (a “cluster f***” as one head of desk at a bank described it to me) have placed huge demands on traders.

Support, skills and strategies

For some traders I have worked with, the challenges they’ve faced have been relatively short-term and situational. For others they have been longer and more drawn out.

For both types of trader, my role as a coach has been twofold.

Firstly, to support them – to be a person they can confide in. Someone they can talk about their challenges with; someone they can reflect on things with. Someone who can advise and guide as required.

Secondly, to help them to develop specific mental, emotional and physical skills and strategies that enable them to overcome the challenges they are facing – and which will also be valuable additional tools in their psychological and physiological armoury going forward.

I hope that this book can provide you with the second of these, as a way of helping you to develop your own bulletproofing skills.

What brings you here?

Whenever I take an enquiry from a trader or an institution about working together, I like to understand what has led them to getting in touch.

Some examples of what brings traders to my coaching include:

 New traders at the start of their careers looking for support in developing a resilient mindset and the mental skills required to deal with the challenges of trading the markets.

 Experiencing a large loss and seeking help to deal with the experience – and to recover effectively.

 Being in a period of drawdown/losses and wanting support in getting through it.

 Lacking in confidence; being unable to pull the trigger on trades or to take the level of risk they feel they could or should be taking.

 Needing support with managing a change of some type, perhaps in trading style or in trading a new product.

 Managing the demands of trading and the demands of life outside trading.

 Help with developing composure to manage big moments in the markets.

 Learning to become more comfortable with the uncertainty and ambiguity of the markets.

 Managing emotions such as fear, anger, frustration, regret and anxiety.

 Strengthening discipline, or consistency, of trade execution.

 Help with managing physical energy – reducing fatigue, overcoming exhaustion and burnout.

 Managing impatience, dealing with quieter and slower-moving markets, overcoming boredom trading or reducing overtrading.

 Struggling with being wrong, with losing money or making mistakes.

 Finding it hard to stay in winning trades, running winners.

Before you read further, my question to you is: what brings you here?

Is there a particular reason you are reading this book? What would you like to get out of it?