What Separates an 8M Trader from a 40K one
I am not a big Shark Tank fan (and Mark Cuban while a very nice guy, is the luckiest SOB that ever lived having sold essentially a worthless website to Yahoo in the go-go 90’s and then had the presence of mind to have Goldman do wrapper on his stock thus preserving his billions when the whole party crashed).
But I digress.
Last night I saw Barbara Corcoran on the show who I admire very much for her hustle and no bs attitude and it reminded me of a recent interview she gave to Business Insider (Video here) in which she describes what separates the 40K a year salesperson from the 8M one.
Its not hard work.
Its not intelligence.
Its not personality.
Its the ability to take rejection and move on and try again.
What I love about Corcoran is that she does not sugarcoat the process. She does not get all “new age” and start spewing nonsense about overcoming pain of failure. She freely admits that it hurts to lose. In fact she states that the best salespeople feel the most pain, because they care the most about the deal. But once they let their frustration out they REFOCUS on the task at hand and try again.
A while back I wrote about the great NJ Devils goalie Martin Brodeur who minded the nets for 20 years. What made him a unique athlete wasn’t that he was quicker, stronger or bigger than other goalies, but that he was able to come back from a loss. Usually goalies are very rattled by bad games and one bad game can turn into many. Brodeur was unusual in that he could shake off a bad performance and become an impenetrable wall the next day.
What is interesting about winning performance in these fields is that is highly contingent on psychology rather than technique and that is why the lessons of Barbara Corcoran and Martin Brodeur are so applicable to trading. More than any other human activity trading is the essence of psychology. Let’s be honest. Technique while important, will never, ever be the sole determinant of your success. The market is just too volatile and too random for anything to work well all the time.
Yet as traders we spend all our time working on technique and almost no time considering our own psychology. But when we look back at all our losses -- what caused them? Bad technique? Rarely. It was mostly bad psychology as one or two losing trades spiraled into a flurry of self destructive behavior that ended up with an empty account. That’s why if you want to be a successful trader care much less about your technique and consider carefully your psychology on EVERY SINGLE TRADE. Your trading will improve markedly.