Trading as a way of life: Jihan Bowes Little at TEDxASL



I can't tell whether to feel good or bad about that introduction even though he works for Goldman Sachs it's true how's everybody don't I've never used a microphone before like this is alright usually on one stage like this and you guys are jumping around stuff like that feel free all right I'm gonna read a bit yeah so my name is Jehan I began my career as a trader about 10 years ago Goldman Sachs here in London knowing next to nothing about the markets or about what I was getting myself into most of the ideas I had about what it was it wasn't I began my career as a spoken word and hip-hop artist about six or seven years after that thinking that I knew a lot about what it was about from being a fan but never actually having done it you know myself needless to say it's been a pretty unusual journey walking these two paths which couldn't really be much more different and for a while I had trouble reconciling them both within myself until I eventually learned for myself that um you don't always have to choose the left or the right Road sometimes you can choose both so today I'm going to talk about the most basic rules of trading the building blocks and how applicable I've found them for life on the whole wide I think they're analogous and maybe applicable to some of you that um hopefully aren't in finance um because what you're trading what you're actually learning to trade is your own fears hopes and biases and actually I would argue figuring out the economics or the mathematics behind the market is relatively speaking the easy part the reason why I think it's such a useful analogy besides just the fact that it's what I do is the following while most of life's big lessons I think are kind of pated in various shades of grey' trading is obviously acutely measurable its results are unbiased by what we hope or wish the outcome to be and also by who we'd like to think that we are at the end of the day you always know if you won or lost and usually in my experience you can trace the genesis of that outcome – something with your own character which I find interesting the kinds of questions that trading poses are things like do you crack under pressure do you let your ego interfere with your objectives do you get wedded to your beliefs have an inability to be flexible and change your mind when the facts change are you afraid of failing or perhaps succeeding in life I think these are some of the most important questions but they're so abstract and so broad that it's hard to get a real handle on them instead of most of us just develop a self view based on what we think we are who we think we are and who we're told we are by other people but we never have an actual measurable way to know whether the kinds of decisions that we're making are actually maximizing our potential so this kind of introspective nature this kind of self-reflection is pretty much the one true common denominator I've found amongst the great traders that I've seen and worked with there's no real correlation I found between you know sex race age and I would argue even intellect frankly in terms of what makes someone a really great trader the market is unflinching you can't cajole it you can't convince it you can't tempt or seduce it you can't plead with it it just simply reflects what you put back and you find out the hard way that you can't really profit by lying to yourself the only way you can really win is to be honest about what's happening in the world and also honest about what's happening with yourself about who you are and importantly about who you're not so I'm going to talk about a couple of the high-level key rules of trading as I found them the building blocks and why I think they might be interesting for you the first one is to know your edge as we heard actually the best trader is measured by the percentage of days they're up versus down is usually no more than 60 or 65 percent of the time whereas a roulette wheel a monkey throwing darts at a board or flipping a coin could presumably you know be right at least 50% of the time so what's all the fuss about frankly but then how do we explain the fact that there are some traders and some funds who've gone 10 20 30 years producing incredibly outsized returns sometimes never having had it down here does it really all blow down to chance and the fact that somebody has to win or is there something else my view is that the answer's no there is something else and but it's a it's what I think it is that's interesting so from what I've seen there's no Road Universal trading strategy that works but one of the things the great traders have in common like we heard is that the winds are much bigger than the losses said another way people seem to be betting much bigger when they're winning than when they're losing great traders that is so success isn't really all just about the frequency of how often you can win it's really about the magnitude with which you can win and to affect this it's all about having the conviction and the belief to bet big because you can't win big without betting big obviously the real differentiator I've found between the good and the great traders is the great traders are able to spot those particular moments in their life when they have what's called edge it takes a certain bravery to know when the odds are particularly tipped in your scale and to be able to have the conviction to bet big enough to capitalize on that so when you believe you're onto something great whether it's a trade or an idea or maybe a relationship whatever if you're only willing to whisk this risk the same amount as when you're onto something which is just good then you're never really going to maximize your gains because as we've seen simply being consistent isn't really enough to produce the kind of outsized returns that the the great traders had you know it attracts a lot of smart people motivated people etc all dedicated predicting was going to have next many of them have very complicated computer models and yet still the hit rates can't really transcend what seems to be this upper bound but by being tuned into those opportune moments when you believe you actually have the edge embedding much bigger you know you can produce returns that are much much greater rule number two is a buying low selling high the reason I would argue that even most traders only get it right fifty or fifty-five percent of the time despite being smart hardworking and all the rest of it is that their human and when you're trading or when you're living is very difficult not to get enticed by human emotions to do the wrong thing at the wrong time to succeed in trading you really have to train yourself to behave in a way which is frankly unnatural if you think about simple supply and demand it tells you that when there are more buyers than sellers the price rises when there are more sellers than buyers price Falls simple right but said another way in extrapolating a bit what that really means is that when there's a majority opinion about something whether that opinion is right or wrong the market moves based on what the majority feels is going to happen so trading is really one of the true democracies in this way so therefore in order to implement this simple strategy of buying low you have to by definition be able to buy when the majority is selling otherwise the price wouldn't be low said another way you have to be able to listen to your own heart and mind and have the conviction to stand against popular opinion the mob or the herd in order to resist the temptation of what they're doing it really back your own beliefs which as we all know from lots of different examples this is not easy so let's look at what not to do imagine you're a trader in the market or anything else you're doing and you're investing something in the markets it's money but it might be time emotion and relationship whatever now imagine that what you've bought begins to fall in value this produces a very obvious reaction fear or pain depending on what your trigger points are you might start second-guessing yourself maybe you should have stayed up later and studied maybe you should have researched it maybe you should listen to your friend that told you you know the opposite was probably going to happen either way this fear is heightened by what's at risk and trading it's the fear of losing money but the wider analogy is clear when we feel fear human nature always tells us to do the same thing which is make the fear stop the problem in trading is that it's very easy to make the fear stop all you have to do is sell your position all you have to do is cut so what you find happening is that you've bought something you've invested your time or your money or your energy and something you thought was going to increase in value the minute it begins to wobble you begin to fill that fear that's self and you so violating the very principle that you're trying to incorporate which is to buy low sell high you've now bought high so low you've locked in loss no trade really in life for the markets goes up in a straight line the truly great traders are the ones that have the strength the character to stick to their guns and see out those inevitable moments of adversity in pursuit of the higher goals and the dreams which is a lesson I think worth reminding the third final rule of trading is the most important in my opinion which is finding your own voice and that's what I found myself looking for Goldman finding my own voice you see because it's always a choice but freedom is a heavy burden I mean freedom is a heavy word brah so I wrote it all down trying to give voice to the me within I highly recommend it I got intimate with dead Indians and other mirages like Forks in the road when there's no one to tell you which way to go home and nobody ever told you you could choose both so while I was warming up for the show's I was also trading doll again backstage on the phone with Tokyo you know going for both was kind of afraid to be in a cliche though there was only a couple of us on the trading floor and truth told that the only black trader really have to be a rapper I mean it did seem kind of predictable but it was my voice that came out it said be yourself I said all right no doubt so at the same time that consumers are blaming banks for the negative equity in their home mortgages and the precipice Cape golden traders for their new Porsches while Wall Street was arguing back that those borrowers could've chosen to live within their means telling them nobody forced you I was navigating the daily fluctuations in the nation's forces with the lyric pad beneath my resource report war going on and I was deep in the fort I didn't lie to him just kept the truth to myself I saw all around me proof that the wealth wasn't enough so I went looking for the missing ingredient I should have known it wasn't out there it only seems it is so I was looking out my office window thinking to myself I have to see this so there I was working right in the thick woke up one morning after a show walked into the office and told them I quit and then I was like did I really just do that I thought yeah I must because they started offering me incentives to stay you see that was the custom but I was like man I should have just thought of this earlier but the cat was already out of the bag I mean this cat was out I'd already packed my bags he flip-flops and sunglasses throw in my rucksack put it over my shoulder the same place of the boat of the Atlas laughs that took my bonus check cashed at and flew to the City of Angels where I composed and arranged flows learn the composition of the buttons in new nodes that were needed to navigate so I began to cohabitate in the habitats magic axe and savage cast it could take your lunch money but might just have a little trouble counting the change and I'm saying which to be brutally honest there wasn't a lot of just a creation of the product so I scripted my two cents worth and donated them to the piggy bank of the genre see I wanted to develop a new theorem I wanted to speak that truth serum that removed the beeswax so i can submit honey to the ear drum when you see the fear run to it flow you know guess I'm just a lifer holic a lifelong attendee of ataraxia Anonymous in love with the belief that belief is the first step pours dream chasin and if I went all-in I figured I might just make it and even if I didn't it wouldn't really make no difference long as I was being me when I did it and you know that's the funny thing about the market it's um it's what people don't understand and why I think it doesn't make sense to ask for stock tips or you know read the papers for for hot hot ideas the real value isn't really in any individual trade it's really only in the consistent and honest implementation of your own personal methodology you know one of the most interesting I mean I had done this one of the most interesting and encouraging lessons I learned working on the floor still there actually is that there's no one way to do the job everyone's different and the only clear pattern in trading behavior is this if you're trying to trade in a way which isn't consistent with your own self you're going to lose you know my trick my time on the trading floor helped to prove something to me that frankly I'd kind of hoped was true going in that we all have a natural walk and an authentic voice that we have to find it by ourselves and for ourselves and then when we speak from it anything's possible Thanks you

29 thoughts on “Trading as a way of life: Jihan Bowes Little at TEDxASL

  1. he got into Goldman Sachs for a trading job without knowing about Markets…. I want to apply for GS… only for its relaxed recruiting process….:)

  2. This man speaks of the forgotten indicator which is the most powerful tool any trader will find: THE MIND. Trading is entirely based on the never ending goal for attaining self mastery. The individuals thought and lifestyle process is a simple reflection on its 2nd party which happens to be ur p/l (a statistical way to judge past/present outcome). The overall message to take home is to quiet the mind in order to ensure a higher probability in maximizing edge and finding readiness within yourself…best of luck to all traders going into 2018.

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  5. If you know what he said and act upon it, you would be successful. But it is not necessary to understand talk less of following. It takes experience but the rapping is useless.

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  7. To all the haters, you're probably not in the stage of trading this guy is speaking to. He's not necessarily targeting the noob trader, but as a second year trader his presentation really reinforced a lot of the key concepts I'm trying to develop, specifically as a trader who trades the trader (just like the book).

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