Read any book or blog about trading and you’ll be told controlling one’s emotions is a key skill needed to trade well. On the surface, this sounds like good advice. After all, greed and fear are killers at a trading desk right? 
But the evidence doesn’t back up such a notion.

These writers are saying you must be very calm and not get too excited. You must keep an even keel and not ride an emotional roller coaster – as if to imply emotional restraint is a desired state.

I’ve never completely agreed with this concept because I know from casual observation most successful people are very emotional.

SOME EXAMPLES

• Michael Jordan, Tiger Woods – very intense, very emotional!

• Bobby Knight, Coach K – love them or hate them, they’re extremely emotional and extremely successful.

• Muhammad Ali – intensity, passion, showmanship and yes, emotion.

• Paul Tudor Jones – if you can get your hands on a copy of the PTJ 60-minute documentary the subject supposedly bought up, you’d learn he has off-the-charts competitiveness, intensity and is very emotional.

THE TRADING TEMPERAMENT

Yet it’s a rarity to meet a calm trader, who doesn’t seem to be overly intense or competitive, become successful. This doesn’t mean you have to hurl your keyboard out the window every time you lose money.It’s just means you aren’t likely to succeed if you don’t have a little fire in your gut.

Trading is tough. It takes years of study and practice. Without a strong emotional drive, it’s unlikely a newbie would be willing to put in the time necessary to get good. (more…)