The Traders Journal

How I Maintain Emotional Consistency and Behavioral Intelligence Trading the Markets

Gatis Roze

Gatis Roze

Author, Tensile Trading: The 10 Essential Stages of Stock Market Mastery

I heard an insightful interview with a judge talking about the transformation she goes through in her chambers as she puts on her black judicial robes and enters the courtroom.
It reminded me of my own physician who I know socially and who I’ve seen experience a similar conversion when he dons his white doctor’s coat before we discuss my medical well-being.  Stay with me; there is a powerful and profitable lesson here for us investors.

Think back to your academic graduations and how you wore robes to prove that you had absorbed the wisdom imparted by your teachers.  Books have been written about the dual personalities of our sport heroes when they don their shoulder pads, helmets and uniforms.  Even our superheroes are empowered when they step out of the phone booth transformed by tights and a big “S” on their chest.  

I’m not suggesting you wear tights.  My point being that it is not really that bizarre for me to put on my trading vest when market hours commence.  Trading — just as other occupations — requires a completely different mindset and personality, and my vest is a physical reminder that my everyday frame of mind and normal thinking will not cut it in the stock market arena.

My vest reminds me to adopt and embrace a distinctly unique way of behaving.  Essentially, it is an emotional tool kit appropriate to my job.  Let’s examine the intersection of our black-robed judge and this gray-vested trader.

  1. In the interview, the judge described how putting on the robe automatically engaged her “judicial temperament”.  As I describe what she said, imagine yourself engaging your “investor temperament.”  She talked about enlisting an ability to apply the law to the facts presented before her.  (We traders must apply our methodology to the realities of the markets before us.  Remember, the markets are like a John Le Carré novel where normal civilians are placed in unimaginable espionage situations and must achieve personal equilibrium.)  She spoke about the necessity to exercise forbearance without bias, under provocation and stress.  (We investors are constantly being provoked by the markets to behave irrationally, but we must stay calm and execute our individual trading plans.) The judge said she had to be willing and open to listen to and consider all sides of the debatable circumstances.  (We investors must be willing to consider both bullish and bearish scenarios in every trade we consider.)
  2. Judges require “legal courage” which she described as a willingness to do what the law requires and possibly going against the popular course of action.  (“Investing courage” means having the integrity to follow your game plan when the media is perhaps screaming at you to do precisely the opposite.)
  3. I found it fascinating that she spoke about the importance for a judge to be willing to continue educating oneself.  She asserted how essential it is to remain current in the law and ongoing legal developments, as well as to be open to new ideas and evolving attitudes.  (As investors and traders, if you are not humble enough to be open to change, learning and evolving trends, the market will no doubt humble you.  I am certain of that.)
  4. The judge’s black robes demanded that she engage her highest communication skills.  A judge must have strong verbal and written skills, but most importantly the ability to listen.  (As a trader, I communicate with the markets through the execution of my trades based on listening to what the market is trying to tell me.  Any filters or personal bias will cloud my listening abilities.  Therefore, these must be purged.)
  5. Finally, the judge described how wearing a black judicial robe is a tradition passed down over hundreds of years (without the wigs, thankfully).  Wearing judicial robes remains a visual statement of one’s education, experience and intelligence.   It proclaims to the world that a judge has served a sort of apprenticeship so that others can therefore rely on his or her judgment and character.  (When I put on my trading vest, it reminds me of all the lessons I’ve learned and all the tuition I’ve paid over the years to the “University of Wall Street”.  I am reminded of the fact that I have served my apprenticeship and have the intelligence to trade the markets in an emotionally consistent manner.  My behavioral intelligence is now clearly woven into the fabric of my trading vest.  I embrace and foster the unique personality that comes with it and which empowers my investing skills.)

Go ahead.  Be courageous.  Step into the phone booth and make a change.  Your future investor superhero will thank you. 

Trade well; trade with discipline!
- Gatis Roze, MBA, CMT


Gatis Roze
About the author: , MBA, CMT, is a veteran full-time stock market investor who has traded his own account since 1989 unburdened by the distraction of clients. He holds an MBA from the Stanford Graduate School of Business, is a past president of the Technical Securities Analysts Association (TSAA), and is a Chartered Market Technician (CMT). After several successful entrepreneurial business ventures, Gatis retired in his early 40s to focus on investing in the financial markets. With consistent success as a stock market trader, he began teaching investments at the post-college level in 2000 and continues to do so today. Learn More