NEW YORK, May 15 /PRNewswire/ -- The best traders understand their psychology and how it contributes to their performance, psychiatrist and trading coach Ari Kiev, M.D. said in his remarks at a recent forum held by ConvergEx, a leading provider of global agency brokerage and investment technology solutions to institutional clients worldwide.
Kiev, president of Kiev Consulting, coaches institutional traders and portfolio managers and works with prominent hedge funds. He discussed risk management principles and stress management for the gathering of sales traders and hedge fund portfolio managers.
"The best traders develop self-awareness. They understand their psychology and how it contributes to their performance, and are willing to be honest with themselves with a minimum of denial in their efforts to outperform," he said. "Given the huge drawdowns and redemptions of the past year, too many people have the tendency to dwell on the past, which can be very draining and debilitating."
Because many traders make the bulk of their profits in 3% of their trades, they need to review their trading stats to understand how much capital is being deployed in successful strategies where they have an edge, he said.
"It becomes critical from a review of past performance how you can recognize opportunities going forward to maximize results. Traders need to understand some of the underlying behavioral components of their trading metrics," Kiev said.
To manage stress, Kiev advised techniques of relaxation, focusing and concentration, as well as periodic review of trading strategy to determine how well you are staying on target.
"Experienced traders detach themselves from emotional responses. The least successful people stay wedded to their ideas and not to market forces," he said. "To deal with stress, you need a plan and you need to work on that plan."
|SOURCE Ari Kiev, M.D.|
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