The intellectual coefficient always served as a reference in order to define whether X or Y person possessed exceptional cognitive capacities, however it has become evident that those individuals with high IQs often go unnoticed within society as they continue to live an average life. Recent studies depict an ever increasing tendency that portrays that the most successful people do not have the highest IQs rather they score highly on Emotional Intelligence tests. You may ask yourself, how is this possible? Emotional Intelligence refers to the influence that external factors have on our ability to make decisions. This applies to all areas from personal relationships to business and governmental decisions.
The trading occupation is clearly not a stranger to this field for it involves unlimited factors that reflect good and bad results. It’s not only about having a winning strategy. I would lose count if I were to try to recall the number of traders that gain astronomical profits in demo accounts and when the time comes to click in a real account the equity plummets. I have seen traders and unique strategies that probably, if in the hands of other people, would be a gold mine, however the psychological aspect of decision making proves to be a bigger influence than most would think and is therefore underestimated. It is clear that the pressure, stress, agitated rhythm of life and the making of decisions under pressure clouds our judgment, for that reason, the best schools of financial education now involve a high degree of trading psychology, which includes the study of one’s behavioral patterns and even relaxations techniques.
What can I do to improve my emotional intelligence? There exists a wide variety of publications on this topic, however each case is unique and for that reason there isn’t a standard solution to this question. Depending on the tendency of your reactions when faced with external impacting factors there are differing approaches regarding the improvement of your decision making skills. To begin, take time to complete a small test that will shed light on your emotional profile. If you’re not on your game and still haven’t taken the time to test your EI, my advice would vary little from that of any other person in the business:
Stop being lazy. Challenge yourself and take the following test: EI QUIZ Step away from your platform, clear your mind and dedicate some time to activities that generate satisfaction. Once you have accomplished relaxation, retake your position and try to be objective when considering the detail that have lead you towards skinny cows. Remember that arrogance is one of the greatest mistakes made by traders. Surround yourself by traders in your community that are displaying good results and, if you feel it is necessary, reevaluate your strategy. If the above mentioned doesn’t work for you, consider the following options:
- Buy shares in Ecopetrol (Not really)
- Starbucks around the corner is always hiring with minimum wage and benefits.
Recommended Books and Publications:
- Yale Center – Emotions Matter
- Emotional Intelligence and Investor Behavior by John Ameriks, Tanja Wranik and Peter Salovey for
the CFA Institute
- The Emotionally Intelligent Investor: How Self Awareness, empathy and intuition drive performance
Chayil School of Trade www.theschooloftrade.com
Regional Manager Latin America