Coaches Can Take Portfolio Managers To The Next Level

Posted on April 28, 2022 by Rajan Chopra, One of Thousands of Executive Coaches on Noomii.

Ask traders if they would like coaching to improve performance and one might either get a quizzical look or “Coaching? What’s coaching going to teach me that I don’t already know?”

It’s understandable that many are skeptical about the value of coaching and resistant to it since there are some misperceptions about what coaching is. Especially among traders, portfolio managers and other high achievers. Coaching is not psychotherapy. It’s not instructional training for development of technical skills. And it’s rarely about giving advice or simply handing out a script entitled “7 Habits of Successful Traders”.

What is coaching?

Coaching is the process of helping individuals achieve sustainable behavioral change to enable consistently better thinking and decision making.

So how can traders be coached into better thinking, decision making and improved P/L’s?

Consider a few common challenges that most traders and portfolio managers face in their jobs:

Performance related stress: This is an always on 24/7 pressure that traders signed-up for when they made their career choice. It seeps into their very core and impacts every aspect of their professional and personal lives. The daily P/L swings bring out many different emotions. Greed, fear, highs, lows, anger, relief and so on. They say a trader dies a few times each day only to be reborn to fight another day. The trader’s persona, focus, attention span, relationships, and whole way of being evolves over time. Traders learn to deal with adversity and hopefully achieve balance in their lives. Some are naturally suited and thrive on this adrenalin rush. Many others are not.

Lack of emotional detachment: Rare is a trader who has never been a victim of having “fallen in love” with a trade idea or a position. Where the need to be right, or the fear of being wrong, is so strong that traders often cannot let go of a losing idea or position despite mounting losses and evidence that they have on the wrong trade. Such emotional attachments, if frequent, often make for short careers. Other forms of emotional attachments, excessive anxiety and obsessive monitoring of markets outside of business hours, negatively impact work/life balance and over time result in “burning out”.

Lack of trading discipline: Most traders have a strategy and a process as to how they approach markets. A process for identifying trade opportunities, trade structuring and position sizing. There is also a process for risk management – position management, profit taking and stop loss limits. If this disciplined process breaks down, and it does break down more often than we like to admit, the consequences can be disastrous. Exceeding stop loss limits, taking profits prematurely and over trading are often signs of trading discipline violations.
So how can coaching help traders deal effectively with these challenges and achieve the desired work/life balance?

A great coach will seek to approach coaching the whole person. One cannot effectively coach just a partial person, the professional side, because work related issues significantly impact every other aspect of the trader’s life.

Through powerful inquiry, thoughtful insights, pragmatic ideas, an inspirational style and a foundation of integrity in a safe and confidential environment, the coach will partner with clients on a journey of self-exploration and help them find clarity in confusion, overcome challenges, resolve conflicts and move beyond self-limiting beliefs and blind spots. Together, the coach and client co-create a plan and take actionable steps for creating sustainable change in the client’s thinking and decision making abilities towards attainment of the client’s goals.

To use a golf analogy, think of the coach as the caddie of a pro golfer. The pro’s thinking partner. Yes, he carries the bag but a great caddie is much, much more than that. He’s the guide, the partner, the mentor and the sounding board who helps the pro make the right choices and decisions. He helps the pro stay calm and maintain a pace that’s natural for his mental equilibrium. Ensures the pro stays disciplined in his pre-shot routine. Every time. And he provides unwavering support and encouragement. Ultimately, of course, it’s the pro who executes each shot.

Does coaching traders make a real difference in enhancing performance? The answer is a resounding Yes. Coaching works best when the client is totally committed to the coaching process, and diligently works towards, making the requisite changes. Coaching is doomed to fail when the client is noncommitted or resistant to the idea of being coached.

While the use of coaching is now common place and growing rapidly in the general corporate executive suites, it is only now that it’s being seriously considered and adopted by a few astute investment firms and funds who are finding value in coaching their traders and portfolio managers.

How does one find a great coach for traders?

Look. Ask around. Select a coach who has traded at high professional levels; one who understands the pressures, the frustrations and the challenges of trading for a living; someone who’s been there. A coach who gets it. A coach whose personality and demeanor fit well with the client’s. A coach who has never traded for a living, never taken and managed risk, is unlikely to effectively coach traders.

Ask this, would one take golf lessons from a pro who couldn’t break par?

The author, Rajan Chopra, is a former derivatives trader turned coach. He coaches investment professionals, entrepreneurs and C-suite executives of Fortune 500 companies on leadership and strategy development.

Learn more about him at www.chopracoaching.com.