Interview with Kenneth Reid, Ph.D.

I am a practicing psychotherapist (Ph.D. in clinical psychology), trading coach and trader. I started trading in 1996 and began coaching in 2002. I swing trade stocks and daytrade index futures. Although I am familiar with many styles of trading, I take a very individualized approach to coaching that is designed to enhance the natural style of the client.

My goal is to determine a few key areas or issues that need to be addressed and work on them methodically over a 6-week period. Often, there is a ‘Keystone Issue’ that, when solved, produces a quantum jump in trader performance. I look to identify this issue in the very first hour of consultation. It may be psychological, technical or procedural. I never assume anything.

Martin asked me to address the question of trading journals. Of course, they are helpful. However, I specialize in coaching traders who know that… and yet seem incapable of keeping a journal.

Martin also asked for my comment on what might be the “biggest, but most easily fixed mistake” that aspiring traders make. I will give you two.

First, I think isolation is one of the most important yet commonly unaddressed problems facing new traders. If you were going to learn to rock climb, would you just read a book or two and then start up the rock face with some talc, a rope, a hammer and a few pitons? Or would you get a mentor to climb with? Trading is just as dangerous to your capital as rock climbing is to your body. I advise new traders to get coaching/mentoring, find a trading room or a trading buddy, and rarely trade alone until you have a winning record.

Second, trade SIM until you can significantly increase your account over 3 months. Then you are ready to go live. You risk doing psychological damage to yourself if you trade live while you are learning. If you can’t trade SIM in a disciplined manner, you may lack the mental discipline to trade well live. All the more reason to SIM until you are sharp.

Mark Douglas has strongly influenced my approach to coaching and trading, however I am a highly technical trader; more so than Mark and more so than most Chicago-trained traders. Probably the biggest influence on my trading has come from the creative collaboration I have enjoyed with successful traders and programmers around the world. Mark Douglas’ ideas must be assimilated, but he somewhat minimizes the importance of the most critical element in trading: developing a robust trading system.

Visit www.daytradingpsychology.com for more information.