A lot of success habits don’t spring from our automatic instincts. We have to train ourselves to behave in particular ways.

Developing good habits is at the core of our success in the markets.

Habits allow us to put some activities on auto-pilot, so we can focus on more cognitively demanding tasks.

But how do we develop good habits to help us to stay strong, as well as focus on the areas required?

To explore this essential area, I’ve invited Jason McIntosh, the founder of Motion Trader, to share some of his thoughts.

Jason is a systematic, rules based trader. His career began on the trading floor of a leading investment bank in 1991. He specialises in identifying price trends and calculating precise exit points.

We’re going to discuss the habits of successful traders. Many of Jason’s insights come from his years of working alongside some of the best traders in the world.

Welcome Jason…

Questionnaire

Why do you think developing good habits is important for a trader?

You’re an endurance athlete. What overlaps do you see between being an endurance athlete and being an effective trader?

What are the key habits your top traders have adopted?

You talk about Ed Seykota’s 5 rules. Ed is one of the Market Wizards, and is known to be one of the most recognised traders in the world. Tell us about these 5 rules and the importance of rule number 5.

Through repetition, when a behaviour becomes hardwired in the brain, it can form a habit. Is repetition important to you, or do you approach trading with more creativity?

Do you have specific rituals you do prior to trading?

When traders are under pressure, their habits are often really challenged. They might drink too much, stay up too late, or ignore their trading plans. What can you do if you’re starting to display bad habits like this?

What role does a good routine play for you?

I really like the method of pairing – where you find one thing you do frequently, and then you add another habit to that regular behaviour. For example, after I open my position sizing spreadsheet and fill in the figures to tell me how many shares to buy, my next automatic step is to enter that order on my trading platform. Have you ever used this technique and has it been effective for you?

Is there any research on this topic in relation to traders and investors?

Do you have a ‘try this at home’ tip?

Introduction by Louise Bedford

Reading time: 28 minutes

Trading level: Beginner

HABIT FORMATION • MINDSET • TECHNIQUES