Share Trading: How to Conquer Fear and Excel at Anything

What makes you nervous?

The top spot for me was always public speaking.

I avoided it whenever possible. Speaking in front of a group of people would fill me with dread. The thought of being a lone voice on stage was petrifying.

For years I mostly sidestepped public speaking. But I could only do this for so long. My career had me on a collision course with the podium.

The first time I had to step up was in my graduate year at Bankers Trust. With my boss out of town, I had to take on his role at the weekly dealing room strategy meeting.

The idea of speaking to a large group was bad enough. But now I had to deliver my analysis of the financial markets to about 100 of the country’s best traders. It was overwhelming.

Thankfully I had a few weeks’ warning. This at least gave me some time to reign in my fears.

By chance, another graduate was filling in for her boss the week before me. She was extremely bright and outwardly confident. This was going to be a tough act to follow.

What happened next will stay with me forever.

One by one, the department heads presented their views. It was then my fellow graduate’s turn. I was sure she’d nail it. But she didn’t.

From her first word it was clear she was struggling. Her voice was crackly and tense. She was also reading from a prepared script. It sounded anything but natural.

But the thing I remember most was her fidgeting. I can still see her foot quickly tapping the floor as she spoke. It was a tell-tale sign she didn’t want to be there.

I felt terrible for her. I was also relieved. Knowing it wasn’t just me was a huge pressure release. I began to understand public speaking was tough for a great many people.

I’ve become fairly good at key speaker roles over the years. It’s by no means one of my favourite tasks. But I can now confidently engage a large gathering.

So how did I turn dread into confidence?

Well it all comes down to practice. It’s about doing it over and over again.

Good preparation is also vital. I’ll spend a week rehearsing for a one hour seminar. I’ve found the best speakers often practice the most. Only a select few can talk well off the cuff.

The other thing I did was watch others. I copied what worked, and I avoided what didn’t. This helped me build a picture of what I wanted to become.

What it takes to excel

I read a fascinating book a while back called Bounce. Its author — Matthew Syed — is an Olympian and award winning journalist.

Syed presents a lot of research on what it takes to excel. Success, it turns out, largely comes down to something Syed terms purposeful practice.

So what’s the difference between purposeful practice and practice? Well quite a bit apparently. You see, purposeful practice is high in quality.

Top performers use this type of practice for the sole aim of getting better. It engages the mind (and/or body) completely and pushes the outer limits of a person’s ability.

This was certainly my experience with public speaking. I actively pursued strategies to get better. The fear of freezing up on stage was a powerful motivator.

My development as a trader was no different.

I would spend hours studying price charts. I was searching for recurring patterns that I could use to make money. This was intense learning. It was purposeful practice.

Champion golfer Jack Nicklaus explains it like this:

‘Nobody, but nobody, has ever become really proficient at golf without practice, without doing a lot of thinking and then hitting a lot of shots. It isn’t so much a lack of talent; it’s a lack of being able to repeat good shots consistently that frustrates most players. And the only answer to this is practice.’

Just change a few words and this is all about trading…or anything else for that matter.

Let’s try this: ‘it’s a lack of being able to repeat winning trades consistently that frustrates most traders.’

Success is a formula. The research proves it. The key is to fully commit yourself to what you’re doing.

There’s no way around it. We have to practice with purpose to be really good at anything.

So just how much high quality practice do we need?

Brace yourself for this, it’s a big number.

The magic figure is about 10 years.

It doesn’t matter if you’re a chess grandmaster, a sportsperson, a musician or a trader. The findings are the same. It takes roughly 10 years of purposeful practice to be our best.

There’s another excellent book I recommend, Outlines, by Malcolm Gladwell.

Gladwell refines the 10 years to a 10,000 hour rule. He says it takes at least 10,000 hours — 1,000 hours per year — to become an expert in any complex task.

Trading certainly qualifies as complex. Those who think it’s simple typically have short careers. Trading for these people is no different to visiting a casino.

A shortcut to the top

I believe there are two ways to accelerate some elements of the 10,000 rule. It’s partly how I got through my early years as a trader.

My boss in those days was Carlos. He was in his 40s and had made the bank a lot of money over the years.

Carlos was always telling me to read as much I could about the markets. He said this was a way to fast track my learning. The experiences of others can be a great teacher.

A book I suggest you read is Market Wizards, by Jack Schwager. It’s a collection of interviews with top traders. This book had a big influence on my early career.

While reading is an excellent way to learn, it will only get you so far. At some point you have to get your hands dirty. This is where a trading system can help.

You see, a system is a ready-made set of rules. It can help focus your attention and sharpen your skills. It’s a bit like practicing under the supervision of a coach.

Purposeful practice can help you excel in anything. I know this first hand. That’s how I overcame my fear of public speaking. It’s also behind my success in the markets.

Quant Trader is the result of my 10,000 hours of practice. It’s the culmination of all my experience. I hope it’s helping accelerate you towards being a better trader.

Until next week,

Editor’s note: Despite the recent market volatility, Jason’s Quant Trader subscribers just cashed in on a big winner. On Monday, they booked a 102% profit in automotive retailer AMA Group [ASX:AMA]. This is one of 13 signals that finished 2015 with gains of over 100%. Get immediate access to Quant Trader — and claim a risk-free trial subscription — by clicking here.

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Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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