The New Market Wizards: Conversations with America's Top Traders (54 page)

Obviously, one approach is more visual and the other more auditory. Depending on whether a person has a stronger visual or auditory sense, one of these two approaches will work better than the other.

Good, that helps clarify the type of process involved. Give me another example.

The following is an example of how to transfer feelings of confidence (or for that matter any emotional state) from one time of your life to another. As with many NLP techniques, the following will work more deeply and completely when done in a relaxed, interruption-free environment.

There are many times in your life when you’ve felt confident. Go back in your memories to a particular time when you felt abundantly confident. Relive the moment, seeing what you saw and hearing what you heard. As you begin to reexperience that confidence and feel it building, imagine a colored circle on the floor around you. As the feeling gets strong, exhale as you step out of the circle, leaving those confident feelings inside the circle. (I am fully aware that these sound like strange instructions.)

Now think of a specific time in the future when you want to have that same confidence. As you begin to think about that specific future time and place, step back into the circle and spontaneously feel those confident feelings again. You have just anchored together that future time and your feelings of confidence from your past. To test whether this has worked, think of that specific future time. You’ll feel some of that confidence as you do. This feeling is now automatic and will be there without your thinking about it when that future situation arrives. This exercise can be repeated for as many different future occasions and as many different feelings as you would like.

Why doesn’t success bring happiness? What does?

I think it’s because people base their ideas of success on outdated models or patterns of what it means to be successful. For example, someone might have the idea that in order to be successful he or she must have a certain kind of house, a certain kind of car, and a certain kind of spouse. They’re using those things as evidence for whether they are a success, but they’re leaving themselves out of the picture. They don’t ever actually step into that picture and ask, “Do I really want to live this type of life?” So I recommend that people not merely visualize what it would be like to actually live the type of life they are trying so hard to achieve, but to step into that life and mentally experience several weeks or months. When people do this exercise, they may find there are things they want to change, and I recommend they make those changes. After all, since they’re working so hard for this future, it ought to be one they’ll enjoy when it arrives.

Are you saying that the reason people don’t find happiness after achieving their goals is because they have the wrong goals?

It’s because they aren’t going for goals that will fulfill
them.
They’re striving for goals that society, or their family, or the media told them to have. We are inundated with all these images of how we’ll know whether we are successful. For example, what is valuable in this culture in a spouse? We know the answer from all the advertisements we see—someone who is young and attractive. But what else is important? I think people sometimes get lost; they don’t explore what success means for them.

How can people identify what goals would make them happy?

One NLP exercise that deals with this question is having people imagine themselves at the end of their lives. Some people are reluctant to do this exercise, but when I tell them to go ahead and imagine that it’s been a very long, healthy, and active life, they’re more willing to try it. Then I ask them to look back on what they have accomplished, and see whether they wish they had done something else or something more. Although it’s a mind trick, by adopting this end-of-life perspective, unconscious expectations are revealed, and people find it easier to make an assessment about what they really want to fill their lives. I ask my clients, “What is really worth the time of your life?”

The idea for this exercise came out of an experience I had when I was in college. I worked as an orderly in a hospital ward that typically had lots of elderly patients. Over the course of three years, I spoke to hundreds of people who were near the end of their lives. I asked these people how their lives had been, what they liked about their lives and what they regretted, if anything.

What did you find out?

I found out that falling in love at nineteen was important. I found out that the willingness to take risks into the unknown, like leaving one’s small hometown, was important. On the other hand, just simply retiring because of age was something many of them felt was the biggest mistake of their lives.

One thing that really struck me was that not one of these people said they truly regretted anything they had actually done—what they regretted was what they hadn’t done. They regretted that they had wasted their lives on petty pursuits. They hadn’t identified their important values and then done everything they could to fulfill them. The lesson I learned from this experience was the same one emphasized years later in NLP: If we don’t live true to our values and fulfill them, we experience disappointment and emptiness.

How do you know whether the goals you’re pursuing are the ones that will fulfill your values?

It’s useful to think in terms of a mission. A mission isn’t something you force on yourself or construct out of your current concerns; rather, it’s something that you discover within. As John Grinder once asked, “What do you love so much that you would pay to do it?” If you don’t have strongly held values, it will be hard to clearly define a mission, and you will have little motivation to achieve your goals. However, if your goals support your values and you have a clear sense of mission, then your motivation will be equally strong.

Is strong motivation a common characteristic of traders who excel?

Strong motivation is a common characteristic among those who excel in any field. There are two different types of motivation, or what NLP calls two directions of motivation: either toward what we want or away from what we don’t want.

For example, consider how people respond to waking up in the morning. When the alarm goes off, one person might mumble to himself, “Oh no, let me sleep just a little longer,” and hit the snooze button. Then when the alarm goes off again, and he sees pictures of himself rushing to get ready for work, he thinks, “No big deal, I’ll wear the same clothes as yesterday and skip breakfast,” as he hits the snooze button another time. When the alarm goes off a few minutes later, his brain begins showing him pictures of getting to work late and having to explain it to his boss. He decides he’ll drive to work faster and goes back to sleep again. But when the alarm goes off the next time, his inner voice says, “
You must get up!
” He sees pictures of his clients waiting impatiently and his boss yelling and screaming, threatening to fire him. When these pictures in his mind’s eye become big enough, bright enough, close enough, and loud enough, then he says, “OK, I’ll get up.” He’s finally motivated.

Another person, when he hears the alarm go off in the morning, thinks about all the great things he’s going to do that day. He sees himself accomplishing new goals and wakes up raring to go. This person is also motivated. In fact, he probably wakes up before the alarm.

The person who wouldn’t get up until he saw images like his boss yelling at him has an “Away From” motivational direction. His motivation is to get away from pain, discomfort, and negative consequences. He probably picks friends who won’t bother him. He’s not likely to make a career move until he can’t stand his job anymore. He moves away from what he doesn’t want. The person who can’t wait to get out of bed has a “Toward” motivational direction. He moves toward pleasure, rewards, and goals. He probably picks friends who stimulate him. He makes career moves to reach bigger opportunities. He moves toward what he wants. People can have both types of motivation—Away From and Toward—but most people specialize in one or the other. They are very different ways of getting motivated, and both are useful in different situations.

The benefits of Toward motivation seem pretty obvious, but how would an Away From motivation be beneficial?

Your question reflects a common perception. The benefits of Toward motivation are more obvious. People who move toward goals are greatly valued in our society. You can see it in the language of the Help Wanted ads, which liberally use terms such as “self-motivated” and “go-getter.” However, the Away From direction of motivation has gotten a bad rap. Another way of thinking about this motivation is that it is away from problems. Many people who use Away From motivation are problem solvers. You can hear it in their language. They’ll say, “Excuse me, but we have a problem here.” They see a problem and have to solve it. Sometimes they get so involved in the problem that they may forget where they are going, but they
will
solve the problem. The Toward motivated people are so motivated toward their goals that they might not even consider what problems they might run into or what difficulties to prepare for along the way. Therefore, both types of motivation are useful.

Are you implying that people with Away From motivation are likely to be as successful as those with Toward motivation?

That’s right. The Toward motivation may be enshrined in success magazines, but the less appreciated Away From motivation individuals can also be very successful. A perfect example is Martin Zwieg, the famous stock forecaster. He manages over a billion dollars in assets. His stock letter and books are among the most respected in the industry. When Zwieg talks about strategy, he says, “DON’T fight interest rate trends. DON’T tight market momentum.” He uses Away From motivation to minimize loss. Many outstanding traders reveal an Away From motivation when they talk about “protecting themselves” or “playing a great defense.” They’re only willing to take so much pain in the market before they get out. As Paul Tudor Jones said in your interview, “I have a short-term horizon for pain.”

Certainly there must be some disadvantages to having an Away From motivation.

Sure. People who are motivated away from things often experience a lot of pain and worry before they are motivated. If they let the stressful anxiety level get too high, it will affect their health. Stress management classes are filled with these people. It would be more useful for them to learn to accept less pain before taking action than to learn to manage it better. Also, the further away they get from the problem, the less serious it appears, and hence they lose some of their motivation. As a result, Away From motivation tends to run hot and cold. Finally, people with Away From motivation won’t necessarily know where they’re going to end up because their attention is on what they don’t want, not on what they do want.

Do successful traders tend to have one type of motivation versus the other?

Very often they come in with a developed Toward motivation—toward success, toward money—that’s why they got into the markets in the first place. However, those that are primarily Toward motivated must spend the time and energy to develop the Away From motivation required for proper money management. In my studies of traders I’ve found that it’s nearly impossible to be a really successful trader without the motivation to get away from excessive risk.

Obviously, motivation is critical to achieving goals. Is that the only critical factor, or is there more to it?

NLP research has shown that five conditions must he met in order for a goal to be achievable. First, the goal must be stated in positive terns. It’s not getting rid of something—for example, “I don’t want to lose money.” Rather, it needs to be stated in positive terms—for example, “I want to protect my assets.” The second condition is that the goal needs to be yours. “They want me to trade larger,” is an example of a goal that does not meet this condition. Instead, if your goal is, “When market conditions warrant it, I’m going to double my trading size,” you’re much more likely to reach that goal. Third, the goal must be specific. Nothing ever happens in general. The more richly detailed the description of your goal—what you’ll see, hear, and feel when you get it—the better. The fourth condition adds the when, where, and with whom. The fifth condition for achieving a goal is anticipating the effects of the goal. Is it worthwhile and desirable in itself and in its effects? This brings us full circle to having goals we really want and that will fulfill us.

The very first condition you stated as critical in achieving your goal is that the goal be stated in positive terms. Wouldn’t those with Away From motivation have difficulty in fulfilling this condition?

The underlying motivation may be one of getting Away From something negative, but the goal can still be stated in positive terms. For example, someone’s motivation for being a successful trader might be to get away from poverty. So the goal might be to set a personal record in profits for the coming year. An Away From motivation and a positive goal can work together to provide thorough motivation and outstanding results.