(The Street) The first time I walked onto a trading floor I was a new employee of Goldman Sachs on July 6, 1987. The sheer mass of people, the sense of excitement and the deafening sounds I will remember my entire life.
A couple of things became clear to me that day: I knew that this was an environment of intense pressure both physically and mentally, and I knew it was something I was going to make a career of.
Over time I noticed there was something different about the type of people who were floor traders. A good floor trader was someone who could operate under stress and filter out distraction. Floor traders were also intense and aggressive. I noticed that although these traders could operate efficiently under the stressful conditions, that didn't mean the stress wasn't something that needed to be dealt with.
Finding Balance
Many traders would deal with stress in positive ways like exercise or competitive sports, while others seemed to never find the right outlet. Over the years I've tried to identify the characteristics of the successful traders, and the one thing that always pops up is a healthy respect for risk.
Although trading risk is huge, emotional and mental health risks are every bit as important. The risk-taking gunslingers always seemed to come and go, but the calculating grinders who lived and traded with balance seem to have the longest and most successful careers.
As trading has moved from the pit to the screen, the type of trader and the mental preparation has changed. The once invaluable skill of being able to read the emotion of a competitor by the expression on their face or their body language has been replaced by the ability to watch and wait while staring at a screen.
This is a huge change. A trader's day is now spent watching charts and waiting for their preferred setup before pulling the trigger. Patience is rewarded in modern trading. Impatience and raw aggression were rewarded back in the 80's.
The noise is gone but the stress remains. It might even be worse. In the past I could scream at someone or throw a tantrum on a trading floor as a means of blowing off steam. Now traders have to find other ways to calm their minds.
Getting Away From The Screen
Most of the traders I know go to great lengths to find outside activities that help them get away from the screen in hopes of coming back more focused. Exercise continues to be near the top of the list of the trader survival strategy. Few things can clear your mind better than a hard workout. I also see a good deal of nature-related vacations. Hiking, mountain biking, sailing and golf can be a great counterbalance to the physical inactivity of trading.
For me exercise is the top of the list. I've seen the stress of trading push people to compulsive behavior as a coping mechanism and I was always going to make sure that exercise would crowd out the less positive possibilities. Coaching kids in sports has also been a great outlet for me. It's hard to concentrate on your own problems when you're running a practice of 15 teenagers. I also try to spend as much time as I can outside with my two dogs.
Trading has morphed into an odd combination of monotony interrupted by excitement and sometimes terror. A healthy stress reliever is critical to success. The people I know that have done well have learned to deal with all the forms of risk. And that very often comes down to their routines after the markets close.
