The Pro’s Process - Ivan Hoff

I am very excited to be able to offer the tenth in my series of posts asking Pro Traders about their psychological processes.  Delving a little into how it feels to them when trading.  The good and the bad.  How this has changed over time and what preparation they do mentally for performing as a trader.

One of the key features for me was that I wanted traders with experience who have been through the mill over the years and of course those who were kind enough to broach this subject publicly.  This I hope gives developing traders more to learn from.  

I’m very fortunate to have a great line up and this week is: 

Trader: Ivan Hoff

1) How long have you been trading?

I’ve been trading for 9 years; U.S. markets for 7.

2) What style of trading / investing do you practice (technically driven, fundamental, systematic, a combination etc)?

80% technical/20% fundamental. When I say fundamental, I don’t mean that I also drink cherry coke just like Warren Buffet. I do look for earnings and sales momentum for the simple reason that historically most big market winners have exhibited strong growth characteristics. Price is the ultimate indicator that matters to me though. If the market doesn’t agree with me, I won’t make a cent and price action is the only  indicator that confirms that market agrees with my thesis. 

3) How do you feel when a trade goes against you?

No emotion whatsoever. I accept that I will be wrong 30-50% of the time depending of the market environment. I just take my loss and move to the next signal. Market is an opportunity machine. The next good trade is always around the corner. Being wrong is not a choice. Staying wrong is.

4) How do you feel when a trade goes for you?


I smile. Who doesn’t like making money? I also realize that I’m most vulnerable to making big mistakes after a period of being right a lot. Overconfidence has put an end to a lot of promising trading careers. 

5) How have these feelings changed over your trading career?  (Can you recall how you originally used to feel and elaborate on how this has changed over time?)

At the beginning, I paid attention to absolute returns and I was looking at my P/L way too often. With time, I learned not to look at the score board and to think in terms of percentages. This is the only way to actually grow money under management and maximize my returns.

6) Do you have any practices that you do away from the trading screen to help you mentally and emotionally handle trading?

I like to run and take long walks on the beach. It helps to clear my head. I also listen to classical music when I go over my charts.

7) Have you always done this? 

I started running actively a couple years ago. Before that I was into group sports - soccer, volleyball, tennis.

8) If not, how have you learnt to deal with the feelings that come up when trading?

Feelings are not necessarily a bad thing. At the beginning of any trading career  your intuition will probably mislead you. But what is intuition actually. In my mind, it is a set of connected memories. We all think differently, because we have had different experiences (memories) in our life. Once you’ve been successful in the market long enough (meaning you have actively learned from your mistakes), intuition could actually become a powerful weapon. Nowadays, all I need is 30 seconds to look at a chart and I could make my mind on the spot if the stock deserves any further attention or not.  When you’ve seen a 100,000 charts, you learn how to recognize good from bad setups and when to sit on your hands and do nothing. 
Here are a few posts I wrote on the subject: one, two and three.

9) Can you describe a time in your trading life which really rammed home the point that so much of trading comes down to psychological factors?

It wasn’t one particular moment. It was a collection of experiences that lead me to the conclusion that successful trading is 80% psychology and 20% knowledge about the stock market. We are all students of the market.

10) If you could give aspiring traders one piece of advice about emotionally handling the market what would it be?

Realize that there’s a huge difference between knowing and doing. It is called empathy gap and everyone suffers from it, some more than others. Everyone knows what needs to be done in order to lose weight and yet, so few are disciplined enough to do it on a regular basis. It is the same with trading. Once you have accepted your weaknesses, you will devise a good plan to handle them properly.
Unfortunately, the best way to learn is from your own mistakes. Having a good mentor could also accelerate your learning curve, but keep in mind that “you can’t teach a man anything; you can only help him to find it within himself.”
Keep a journal and go over your old entries frequently. It will help you to connect the dots faster.

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I’d like to thank Ivan Hoff for sharing about the way he tackles the market from an emotional / mental side of things and for his willingness to allow me to post this as a free resource in the hope that traders who have been in the market for less time or are thinking of entering can perhaps pick up some A-HA’s.

If you are interested in finding more out about Ivan Hoff you can find him:

On twitter: @ivanhoff 

At his website: http://ivanhoff.com/

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Previously in the series:

Charles Kirk - read it…..here

Matt Davio - read it…..here

David Blair - read it….here

Mike Bellafiore - read it….here

Mark Holstead - read it ….here

Brian Shannon - read it…. here

Mike Dever - read it…. here

Anthony Crudele - read it… here 

Derek Hernquist - read it … here

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Disclaimer: Embrace The Trend / Richard Chignell does not provide investment, financial or product advice.  I trade my own capital exclusively.  I eat my own cooking as should you.  If you are going to trade / invest it’s at your own risk and you must take responsibility for your actions.

Tags: Pro's Process Ivan Hoff trading investing management risk