Enhancing Trader Performance By Brett Steenbarger Free Download – Includes Verified Content:
Through his own trading experiences and those he has guided, Dr. Brett Steenbarger deeply understands the hurdles traders encounter as well as the performance and psychological tools that address those challenges. In Enhancing Trader Performance, Steenbarger demonstrates how to convert innate talent into refined trading skill via a systematic expertise-building process and explains how this can lead to mastery of the markets.
Editorial Reviews
From the Inside Flap
Trading is fundamentally a performance discipline. Much like Olympic athletes, elite military personnel, and performing artists, traders can deliberately structure their growth to develop competence and mastery. Drawing on his personal trading background and that of the traders he mentors, Dr. Brett Steenbarger is well-versed in the obstacles traders face and the psychological and performance techniques to overcome them.
In his first book, The Psychology of Trading, Dr. Steenbarger outlined a model for recognizing and conquering the mental barriers to effective trading. Now, in Enhancing Trader Performance, he advances this concept by guiding readers on how to shape talent into skill through a clear expertise-development framework.
Clear and user-friendly, this comprehensive manual:
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Highlights the need to align your trading talents and interests with the markets you trade and your trading approaches
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Examines how engaging in a structured learning process nurtures your trading skills and expertise
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Introduces “learning loops,” which facilitate continuous refinement of your trading techniques
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Breaks down trading performance into three key aspects—mechanics, tactics, and strategy—and explores their respective contributions to trading success
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Demonstrates how to self-coach using practical cognitive and behavioral methods that swiftly shift problematic patterns and foster constructive thinking and behaviors
By improving your trading performance, you replace chance with deliberate intent, enabling smarter decisions in today’s volatile markets. Rich with insights, actionable advice, rigorous research, and vivid examples, Enhancing Trader Performance offers a fresh pathway toward market mastery.
From the Back Cover
Praise for Enhancing Trader Performance
“Brett Steenbarger provides traders the most valuable tool for improvement: introspection. By establishing a measurable, positive learning system, Brett empowers everyone—from veteran fund managers to novices—to unlock their full potential.”
―Larry Connors, CEO, Tradingmarkets.com
“Brett convincingly shows that mental toughness can be cultivated and expertly applies performance theory to trading. His insights on consistency, habit formation, and positive self-talk resonate deeply within the complex realm of markets. Traders at any stage will find inspiration in these performance-enhancing strategies as they pursue mastery.”
―Linda Raschke, LBRGroup, Inc.
About the Author
BRETT N. STEENBARGER, PHD is Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University, Syracuse, New York, and an active equity index market trader. With over fifty peer-reviewed articles and book chapters to his name on brief therapy and related topics, he is also the author of The Psychology of Trading. As Director of Trader Development at Kingstree Trading, LLC, Chicago, Dr. Steenbarger has coached many professional traders and led training for newcomers.
Chapter One
Where Expertise Begins
The Performance Niche
“I’m a big believer in starting with high standards and raising them. We make progress only when we push ourselves to the highest level.” — Dan Gable
Michael Jordan’s story is well-known. Cut from his high school team as a sophomore, his chances for a college scholarship looked bleak. Most young athletes might accept defeat and move on to less competitive leagues. Jordan responded differently—he practiced relentlessly, even when exhausted, motivated by the memory of that cut. Two years later, he became a McDonald’s All-American and game MVP; shortly after, he made the game-winning shot in the NCAA finals for UNC. By the end of his NBA career, Jordan had hit 25 game-winning shots, including the iconic jumper in 1998 that sealed his sixth championship.
Jordan was an elite performer, yet his ascent from a high school rejection to college star was not without struggle. Despite solid college numbers and being drafted third in 1984, he wasn’t initially predicted to be a superstar. Still, he stands as a powerful example of expert performance.
What drives experts? How do they differ from average performers? Is expertise innate or developed? Most importantly, what can trading learn from experts in other domains? This book identifies shared elements behind the success of chess masters, Olympic athletes, top artists, and successful traders. One key element is discovering a performance niche—the particular activity best suited to your talents and interests. Jordan found his in basketball, not baseball; Dan Gable began as a modest swimmer before becoming a wrestling champion and coach. Identifying your trading niche might be the difference between a career hallmarked by success and one that never truly takes off. Unfortunately, many traders stumble into their markets and styles without ever uncovering their real strengths.
A TALE OF TWO TRADERS
Al and Mick were two short-term traders at a professional firm, both trading the electronic S&P 500 (ES) E-mini futures contract. I was given full access to observe them during market hours to assist with their trading.
In the morning, Al watched the market trade sideways after a failed rally. The prior day’s average price was a few points below current levels, and based on historical data, I suspected we’d revisit that average. We had discussed this potential move as a trade idea, but Al favored going long. Although skeptical, I didn’t push him.
As the market declined and Al’s position lost money, he recognized the mistake and exited, then switched to a short position. He gained a few ticks before the market reversed again. The morning was choppy with a slight downward trend. Al stayed patient but made little profit. He took a lunch break hopeful the afternoon would offer more opportunities. Throughout, he remained composed, maintained a positive attitude, and expressed optimism about using the break to reset and improve focus.
Mick’s story was different. He also went long early, suffered losses, but refused to exit at his stop loss, allowing losses to grow. I advised him that minimizing morning losses would improve his chances of recovery later. Eventually, he closed the position but didn’t take a midday break. Instead, he obsessively reviewed morning data, replayed bad trades, shifted uncomfortably, pounded the table, raised his voice, and vented his frustration. Watching his recorded trades, he called himself “stupid” and vowed to focus relentlessly on the five key signals he believed foretold the market’s decline.
Al and Mick were clearly different traders. Al made a mid-five-figure profit in the afternoon; Mick struggled to break even all day.
One was an expert trader; the other was still learning.
Al remained emotionally balanced, respected his stops, and kept a positive outlook. Mick was emotionally reactive, violated risk rules, and ruminated over mistakes, often disparaging both market and self.
Most trading psychology texts would favor Al’s approach. Yet Al never succeeded in trading long-term. Mick, despite his emotionality, became a multimillion-dollar trader. Witnessing many similar cases convinced me to write this book.
THE CORNERSTONE OF EXPERTISE
Mick shares some traits with a young Michael Jordan—he doesn’t accept defeat easily and channels losses into motivation. But there is a more fundamental difference between Mick and Al, identified by K. Anders Ericsson, a leading researcher in performance psychology, as the foundation of expertise.
Think of their daily routine: both trade frequently and experience wins and losses. Al moves on from losses quickly and clears his mind for the next trade. Mick, meanwhile, uses losses as fuel to review, analyze, and adjust.
Over a year, Mick’s persistent review exposes him to double the market experience Al gains. Mick systematically analyzes and adjusts, becoming a “learning machine.” Ericsson calls this deliberate practice, a key feature of experts. Through guided effort and feedback, experts continually improve their decision-making.
“Practice makes perfect” is a cliché, but experts know it’s perfect practice that counts. How practice is structured separates a trader with 10 years of repeated mistakes from one with truly 10 years of growth.
All performers face a catch-22: confidence and motivation come from winning, but winning requires confidence. Rehearsals provide repeated mastery experiences that fuel formal performance. Mick refused to take breaks until he had dissected his errors; Al prioritized emotional calm. By afternoon, Al was calm and Mick confident. Mick’s emotional intensity, often seen as a liability, was actually competitive drive. As Vince Lombardi said, “Good losers usually lose.”
Dan Gable was not a good loser either. He believed practice builds expertise. After grueling sessions, he had wrestlers do “buddy carries” and endure exhausting drills that built physical and mental endurance, preparing them for the toughest moments in competition.
Practice is the foundation of expertise because it multiplies experience beyond what formal competition provides. Gable’s wrestlers mastered more moves than their opponents; Mick reviewed countless losing trades; Al did not. Guess who was more prepared and confident when challenges returned?
One expert trader featured later is Scott Pulcini of Kingstree Trading, Chicago. What impressed me most was Scott’s relentless focus—he sat through the entire trading day reviewing every order and then watched market footage afterward. This deep dedication means he’s accumulated years of market experience in relatively few years of trading. Many traders lose similar opportunities due to emotional outbursts, breaks, or time off.
At Kingstree, I noticed the game room and kitchen were popular—but the top traders like Scott were rarely seen there. They were in front of their screens, like Mick, not Al.
LEARNING LOOPS: THE ENGINE OF PERFORMANCE
Deliberate practice almost always occurs outside formal competition. Consider a basketball team or theater troupe: practice rehearses skills to be used when the game or performance begins. Immediate feedback allows performers to adjust before the real event.
In solitary pursuits like chess, performers self-assess by replaying games, studying grandmasters’ moves, and understanding superior lines of play.
Team sports rely on coaches or mentors who observe and intervene during practice to refine skills and teamwork. Timely and accurate feedback is essential to learning.
The core of deliberate practice is the learning loop: attempt → feedback → improved effort → repeat. Mick’s trading losses prompted analysis, error identification, and adjustments—a clear learning loop. Chess players replay games to test new strategies. Coaches continuously initiate learning loops with athletes. Military basic training is essentially a sequence of learning loops fueled by drill instructor feedback.
Prima ballerina Wendy Whelan described how she used video review to improve her performance, similar to traders reviewing their actions outside market hours. Immersed in markets, traders “feel” the action but can’t objectively see themselves. Elite performers step outside themselves to observe, correct, and improve. Nolan Ryan studied batter footage; weight lifters train in mirrored rooms. Learning loops are evident everywhere expertise flourishes.
So why is this practice so uncommon among traders?
Product details
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Publisher : Wiley; 1st edition (October 17, 2006)
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Language : English
About the author
Brett N. Steenbarger, PhD, is Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, New York. A passionate trader and author of the popular TraderFeed blog, Steenbarger coaches traders in hedge funds, proprietary trading groups, and investment banks. He also authored Enhancing Trader Performance and The Psychology of Trading. He holds a BS from Duke University and a PhD in clinical psychology from the University of Kansas.
