The Pro’s Process - Jon Boorman

I am very excited to be able to offer the fourteenth 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: Jon Boorman

1) How long have you been trading?

I’ve held a variety of roles within the financial industry since 1987. I started with Schroders in London just a few weeks before my 18th birthday. My first real break came a few years later when I went from being a fund manager’s assistant and moved up into the trading room. They were a fantastic group of people and I learnt so much. Even before I joined Schroders I had an avid interest in markets and used to place trades with a broker in between lectures at college.

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

I’m a technical trader, specifically a trend-follower. It’s taken me many years to get here, to understand what works best for me, and develop trading systems and methods that suit my personality and trading style. I think that’s key. I trade global index, currency and commodity futures with systematic trend following, and US stocks with what I call a ‘rules-based discretionary’ style.

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

I don’t like it, but I accept it readily. As a trend-follower you typically have more losing trades than winning ones, but as long as you are disciplined in executing the time honoured strategy of cutting losers and running winners, your average win will outweigh your average loss and make you profitable overall. So I now look at losing trades as being part of a winning system.

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

It feels good as it means I don’t have to do anything, and for some people that’s the hard bit.  The sitting, waiting, letting those winners run can be difficult if you expose yourself to the noise of news and commentary bombarding you with reasons to do something.

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?)

Great question. The actual feeling of not liking it when I lose and enjoying winning hasn’t changed, but the way I process and act upon those feelings has markedly. From years of being a buy-side head of desk, a sales trader to institutions, and a prop trader at an investment bank, I picked up unhealthy habits of telling people what they want to hear, and most fatally developed a need to be right, which was only further fostered by that environment. Now, as a trend follower, knowing that I will have a low strike rate has all but removed that ‘need to be right,’ I don’t live from one trade to the next, each one is a tiny part of an overall process. I accept that there will be more losers than winners, and I can never know what each trade brings, so after a while you learn to treat them all the same with little emotion. Your only job then is to manage risk to ensure those losses remain small enough for the big winners to outweigh them monetarily.

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

Having young children is certainly a great leveler, it helps cement what’s really important, and any time spent with them is a welcome departure from markets. I try to relax as much as possible to clear the mind, and I think diet and physical exercise are important too. I’ll happily row for an hour, or play tennis, anything that gets the blood pumping and your energy levels higher can only be a good thing. Beyond that I currently sing in a classic-rock covers band which is a lot of fun for me, and a good outlet for the ego!

7) Have you always done this? 

In some form or another yes, but I think I probably thought about it less previously. Now it’s something I feel like I have to plan or remember to do, whereas before it was something that happened on the fly. Having a family is the big game-changer there in terms of the time and commitment it demands.

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

The difference now is I know what feelings to expect, I know why I feel that way, and I know how to deal with it, which stems from becoming more self-aware over the years.

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?

I had always believed that psychological factors play a large part, and have seen people talk about what percentage of trading is psychological. I’ve got to the point now where I think it’s 100% psychological. Every single facet of trading, whether it’s developing systems, stock picking, entries, exits, position sizing, even selecting an algorithm and pushing that button, all starts with human involvement and the biases and emotions we have that shape our beliefs. What really drove that point home for me was a lot of the self-work I did after moving to the US in 2005 when I read some of Van Tharp’s work and attended one of his courses.

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

It all begins with you. Know yourself first, and then you can recognize your emotions when they reveal themselves in your trading. It’s like the quote from The Money Game “If you don’t know who you are, the stockmarket is an expensive place to find out.” I can now watch a situation develop in the market and recognize what the old me would have done. It doesn’t mean I don’t still feel those emotions, but I now understand the reasons behind them, what motivates me, the biases I have, and how to deal with that. If you can combine self-awareness with a systematic approach to trading you will significantly improve your chances of success.

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I’d like to thank Jon Boorman 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 Jon Boorman you can find him:

On twitter: @JBoorman

At his blog: www.jonboorman.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

Ivan Hoff - read it… here

Brian Lund - read it… here

Greg Harmon - read it… here

Michael Bigger - 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.