Seventy four recessions. Seventy four confirmed episodes of recession, across different countries, catalogued by the IMF in a 2002 study.

Four of them predicted. Only four, correctly forecast in an econometric forecast published just three months before the recession year arrived.

Seventy missed. Seventy recessions the forecasters did not see coming, three months out, with the models running and the data in hand.

Two thirds still not called, four months after the recession had already begun. Two thirds of the time, the contraction was already underway, already showing in the numbers, and consensus economists still had not named it a recession.

Four months in, and the forecast still said no recession.

Four months in, and the economy had already turned.

Four months in, and the analysis had not caught up to the event it existed to predict.

That is not a story about bad economists. It is a story about what analysis can and cannot do, applied to a system that is already moving by the time anyone has finished measuring it.

The title borrows from a man who had every right to trust a plan.

General Dwight D. Eisenhower planned the invasion of Normandy. Five beaches, over a hundred and fifty thousand men, thousands of ships and aircraft, coordinated across nations and timezones, down to the hour. It remains one of the most complex operations ever assembled, planned by one of the greatest planners in history.

And his conclusion, after all of it, was: “Plans are worthless, but planning is everything.”

Not the plan. The planning. Not the document that comes out at the end, but the discipline of building it, stress testing it, war gaming what could go wrong, and then being ready to throw the whole thing away the moment the enemy, or the weather, or the tide, disagreed with it. Eisenhower knew the plan would not survive contact. He built one anyway, because the process of building it was what made the army ready for whatever actually happened.

Analysis asks the same of a trader, or an economist, or anyone trying to read a market. The analysis, the report, the forecast, the model output, is not the point. It is worthless the moment the market moves and disagrees with it, which it eventually always does. The analyzing, the discipline of doing the work, building the view, stress testing it, staying ready to discard it, is what actually matters.

Analysis is worthless. Analyzing is everything.

Why Markets Resist Analysis

Markets do not sit still long enough to be measured.

Markets do not sit still long enough to be modeled.

Markets do not sit still long enough to let yesterday’s pattern hold tomorrow.

The Moment Analysis Becomes Known

The moment a signal is found, it starts to disappear.

The moment a forecast goes public, the market begins pricing it in.

The moment everyone agrees on the analysis, the analysis stops being true.

What Analysis Assumes

Analysis assumes a stable world. Markets are not a stable world.

Analysis assumes the rules of yesterday. Markets rewrite the rules overnight.

Analysis assumes enough data to be sure. Markets move before enough data ever arrives.

What No Model Accounts For

No model accounts for fear, spreading through a room in seconds.

No model accounts for greed, arriving late and leaving even later.

No model accounts for a crowd deciding, all at once, to stop believing the story it told itself yesterday.

What a Market Actually Is

A market is not one thing reacting. It is millions of things reacting, to each other, all at once.

A market is not a machine with fixed parts. It is a living system, adjusting in real time to everyone trying to read it.

A market is not solved. It is survived, one changing moment at a time.

Which Is Why the Title Holds

Analysis is worthless, the moment the market moves past it.

Analyzing is everything, because it is the only part you actually control.

So What Do Great Traders Do Differently, and Why Do So Many Good Analysts Struggle to Become Great Risk Takers?

Portfolio managers, traders, are risk specialists. Not analysts.

I have lost count of the brilliant analysts I have watched struggle to become brilliant risk takers.

Intellectual capability makes a great analyst.

Domain knowledge makes a great analyst.

Subject matter expertise makes a great analyst.

None of it makes a great risk taker. Just ask Leopold Aschenbrenner.

I Know This One From the Inside

I lived this as a trader myself.

It took a major mindset shift to move past it.

It took real work on my own philosophical approach to risk.

It took a coach, to catalyse what finally moved me forward.

Now, as a coach, I have seen the same dilemma in client after client. Brilliant analysts. Subpar traders.

Commentary Is Not Risk Taking

Mike Tyson said it best: everyone has a plan until they get punched in the mouth.

Watching from a distance and making an observation, that is commentary.

Being in the ring and taking the punch, that is risk taking.

Analysis helps. Forecasting helps. But their limits have to be understood, not ignored.

What a Risk Taker Actually Does

A risk taker makes a judgement. A risk taker makes a decision.

A risk taker observes, senses, feels, and makes the call anyway.

A risk taker structures a position around that call, then restructures it the moment the sensing shifts.

A risk taker adjusts posture in real time, not stuck to the plan. Recalibrating. Revising. Reversing, if that is what the moment calls for.

That is a different mindset entirely.

Three Separate Stages

Realising the difference is one thing.

Working to become a risk taker is another thing entirely.

Becoming a master risk taker, that is where the real success sits.

Now, as a coach, I see too many traders become fixated on their analysis outcomes rather than their execution. Some of my most rewarding client transformations have come from helping people uncover the unconscious patterns driving this bias, and guiding those brilliant analysts to become truly great risk takers.

That is the whole difference between a great analyst and a great risk taker. The analysis was never going to be perfect. It was never meant to be. What matters is what you do with it once you are in the ring, taking the punch, and still able to make the call.

If this resonates, and you want to talk through what that shift looks like for you or your team, reply to this post or reach out at info@alpharcubed.com.

Steve

Performance coach to traders, portfolio managers, leaders, and teams. Author of Mastering the Mental Game of Trading.

Curious about coaching or any other aspect of our work. Visit alpharcubed.com or email info@alpharcubed.com

A special edition of Mastering the Trading Game, outside our regular weekly schedule.

AlphaMind Is Back: The Body Keeps the Score, and So Does the Market

Why we started our return with trauma, not technicals

If you have ever taken a loss that did not just cost you money, it cost you a piece of how you saw yourself, you already know what this episode is about.

After a long break, AlphaMind is back. It is the podcast I co-host with Mark Randall, continuing on from the more than 150 episodes we recorded together over the last seven years. We either interview guests or talk between ourselves about the behavioral, psychological and human performance side of trading, risk and engaging with markets.

For the episode marking our return, we did not start with markets at all. We started with one of the most influential books ever written on psychology, one that most practitioners in psychotherapy and coaching already know well: The Body Keeps the Score, by Bessel van der Kolk.

Its core argument is that trauma does not just live in memory. It physically alters the brain and nervous system, trapping emotional pain in the body itself. Healing, van der Kolk argues, often cannot be reached through talk therapy alone, it usually needs mind body practice as well. The aim is to help survivors reregulate their physical systems and reclaim a sense of safety.

Why a trading podcast is talking about trauma

That might sound like a dramatic place to start. Here is why we went there anyway.

We see trading as a series of traumas that most traders move through, in one form or another. Not the same traumas the book is describing: war, abuse, the kind of events that produce classic PTSD. But everyone carries smaller versions of trauma through life, and trading has an unusual talent for reopening them, or creating new ones of its own. The deep hurt of failure. Setbacks that do not fade the way they should. The hit to identity that so many traders carry quietly and rarely talk about.

Five things the conversation covers

The rational brain goes offline under threat. Under real threat, the analytical part of the brain that is meant to be running your process is often the first thing to go quiet, exactly when a trader needs it most.

The body knows before you do. Tension, a racing pulse, a tight chest: the nervous system often flags danger, or opportunity, before conscious thought catches up.

One bad hit can fragment your whole story. A single loss, if it lands hard enough, can rewrite how someone sees themselves as a trader, long after the trade itself is closed.

Talking about it is not enough on its own. Understanding a pattern intellectually rarely resolves it. The nervous system needs its own kind of work too, not just insight.

Safety in a relationship with a coach is what lets the system recalibrate. Real change tends to happen inside a relationship that feels safe enough to let the guard down, not in isolation.

Listen to the episode

Podcast link: https://www.thealphamindpodcast.com/the-market-doesnt-care-about-your-story-what-the-body-keeps-the-score-teaches-traders-about-risk/

Podcast link: https://bit.ly/4wseOJP

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email or drop us a line at info@alpharcubed.com.

Steven Goldstein

Performance coach to traders, portfolio managers, leaders, and teams. Author of Mastering the Mental Game of Trading.

email info@alpharcubed.com.

“Open her an online poker account. Put a small amount of money in it. Let her lose it. Then put a little more in, and make her work out why she lost it the first time.”

That was my advice to an old friend, whose daughter wanted a career in trading, and he wanted to know which course would give her the best start.

He laughed, but I wasn't joking.

I wasn't telling him to make his daughter a gambler. I was telling him where the real education starts.

Long before technical analysis, market structure or macro models, you need to understand the nature of uncertainty and how to cultivate the mindset to navigate it effectively.

You need to know how to take and sit with risk, take a loss without it taking a piece of you, and function inside pure uncertainty.

You need to be able to separate the impact of randomness on how you make judgments and decisions in complex emergent situations with incomplete information.

Poker forces that on you from hand one. Markets don't. Markets let you believe, right up until real money is on the line, that this is a technical game, where analysis will provide the answers and you just follow-up.

It isn't. And the players who already know that have an enormous head start.

The pipeline nobody talks about

There's no dataset tracking every poker player who ends up on a trading desk. But spend enough years around trading floors and the pattern is impossible to miss: a disproportionate number of the best traders played serious poker first.

In my book, Mastering the Mental Game of Trading, there's a story I tell of a trader at a top-tier investment bank who started out as a poker champion. That character is based on a group of traders I've coached over the years, across banks, hedge funds and prop firms, who were all serious poker players, including one ranked in the world's top 200.

The stories all echoed each other. They built a probabilistic mindset at the felt before they ever built one at a screen. When they got to trading, they already had a working blueprint for processing risk under pressure.

A loss was never a verdict on them. It was the cost of doing business with an edge.

This isn't just something I've noticed from the outside. Some institutions train for it deliberately. Todd Simkin, a former senior trader at Susquehanna International Group (SIG) and head of their trader development programme, was our guest on the AlphaMind podcast. At SIG, poker isn't a fun Friday extra. It's built into the curriculum: new traders go through a structured poker learning course before they're let anywhere near a live book. It's an accelerated simulator for risk-taking, and an early filter for who can actually make decisions under uncertainty.

It also took a former poker player to write what I think is the most important go-to book for developing traders. That book is Thinking in Bets by Annie Duke.

Duke was a professional poker player before she became a decision scientist, and the whole book is built around the point I keep coming back to with clients: judge the decision by the quality of the process, not by the outcome.

She has a name for the tendency: resulting, whereby we treat a good outcome as proof of a good decision and a bad outcome as proof of a bad one.

Resulting is the single most common thinking error I see in traders who've never sat at a poker table, and there's no better primer for the mindset a trading desk actually needs. It will do more for a new trader than most of what sits on the standard reading list.

What poker actually teaches

Strip away the cards and the chips, and poker is a compressed course in everything that separates traders who last from traders who don't.

Probabilistic thinking. Poker never lets you believe in certainty. Every hand is a distribution of outcomes, not a single answer. Play enough hands and thinking in probabilities stops being an exercise and becomes how you see the world. That's the exact shift traders need and rarely get from a textbook.

Dealing with setbacks. You will lose hands you played correctly. Repeatedly. Poker forces you to separate the quality of your decision from the quality of the outcome, over and over, until the separation is instinctive. Most traders never build that muscle until the market builds it for them, expensively.

Patience and discipline. Good players fold far more hands than they play. They wait. The discipline to do nothing, hand after hand, until the setup actually justifies action, is the same discipline that keeps a trader out of the trades that only look interesting because they're bored.

Risk management. Bet sizing in poker is not optional decoration, it's survival. Size wrong relative to your edge and you're out of the game before your edge ever gets to express itself. Same table, different chips, in a trading account.

Going for it when the odds are yours. The flip side of patience is conviction. Good players fold constantly, but when the maths and the position line up, they push, hard. Traders who've only ever learned caution freeze in exactly the moments they should be sizing up.

Decision-making under incomplete information. You never see your opponent's cards. You act anyway, on the best read available, and you update fast when new information arrives. That's not a poker skill. That's the whole job of trading.

Offence and defence. The best players shift posture constantly, aggressive when they hold position and edge, defensive when they don't, and they make that switch without ego getting in the way. Traders who only know one gear, permanently on the front foot or permanently hedged, are playing half a game.

Randomness, even with a strong process. This is the one that breaks people. A correct decision can still lose. A poor decision can still win, especially in the short run. Poker gives you thousands of reps to absorb that truth cheaply, in a sandbox. Markets give most people that same lesson once, at scale, with real money attached, as Leopold Aschenbrenner found out so publicly last month.

That's the one lesson no course, no book and no amount of paper trading can hand you fully formed. You only get it by playing hands you can afford to lose, watching a correct decision go wrong anyway, and learning to leave the outcome where it belongs, separate from your own worth.

That's exactly the gap our Performance Coaching programmes are built to close, the part no book, even Duke's, can do for you. If you want to talk through what that looks like for yourself or the business you're in, reply to this email or drop us a line at info@alpharcubed.com.

Steve

Performance coach to traders, portfolio managers, leaders, and teams. Author of Mastering the Mental Game of Trading.

In the autumn of 1720, Sir Isaac Newton took profit on his shares in the South Sea Company.

He had doubled his money and should have walked away satisfied.

Then FOMO struck. Newton watched the price soar higher without him, everyone around him celebrating further gains.

Unable to bear it, he bought back in.

Then the South Sea Bubble burst. He had bought the top.

Newton rode it all the way down.

He never disclosed the figure he lost, but it’s thought to have been close to what he earned in a lifetime as Master of the Royal Mint.

Afterwards he famously said, “I can calculate the motion of the heavenly bodies, but not the madness of people.”

Even geniuses, it turns out, are not immune to FOMO, and the many other behavioural fragilities that are part of the human condition.

This brings us back to the present day, and the very hot and current story of 25-year-old Leopold Aschenbrenner.

Aschenbrenner made his name in 2024 with a 165-page paper arguing the AI revolution would arrive faster than almost anyone believed. He turned out to be right, which is a dangerous thing to be at age 25.

On the back of this, he launched a hedge fund, Situational Awareness, built almost entirely around that one thesis: long anything with a GPU or a shovel near the AI gold rush, short the software incumbents he’d decided were about to be eaten.

The Wall Street Journal duly reported the fund up 1,000 percent in two years, including 270 percent in the first five months of this one. Aschenbrenner was being called the Nostradamus of AI, presumably without irony. At its peak it held $45 billion in assets under management.

Then, over roughly two weeks in late July, it lost about $35 billion. CNBC reported the fire sale as it was still unfolding, which is the financial-media equivalent of narrating a car crash from the back seat.

Most of the takes I’ve seen this past week fall into two camps.

Gloating on one side. Anger at an industry that allows this to happen, on the other, with Citadel cast as villains, as so often they are.

I’m not much interested in either. Citadel didn’t do anything to him. It just did what it always does, which was simply play the game and be prepared.

For me, this is a story about excessive leverage in inexperienced hands, compounded by a classic misunderstanding of market nature. Like Newton, he mistook the complex for the complicated, believing it could be understood as something akin to physics.

LEVERAGE IS DYNAMITE

I often use dynamite as a metaphor for leverage in trading. Genuinely destructive in careless hands. Used deliberately, with respect for its power, and by people deeply experienced with it, it can have great creative power.

In its simplest form, leverage multiplies the return of a strategy. A system producing 5 percent a year becomes 50 percent at 10 to 1. The catch, which the marketing deck tends to leave out, is that drawdowns scale identically and hurt considerably more. A 5 percent drawdown becomes a 50 percent drawdown, and the return needed to get back to flat isn’t 50 percent. It’s 100.

On the other hand, if you give back a 50 percent gain, you’ve only lost 33 percent, give or take a percentage point.

From what’s been reported, Situational Awareness was leveraged at around 4 to 1, which by industry standards isn’t especially high.

My own understanding is that hedge funds typically run closer to 7 to 1. But not all leverage is equal.

Raw leverage ratios mean nothing without context. A multi-strategy fund running 7:1 leverage often carries far less risk than a concentrated directional bet at 4:1. Uncorrelated, market-neutral trades absorb volatility. Concentrated thematic bets convert routine market noise into fatal margin calls. Diversification, not just leverage, dictates survival.

A 25-year-old, however intelligent, however deep his knowledge of the industry he was speculating in, simply hasn’t lived through leverage, or the way markets behave as a crowd. He was playing with fire and didn’t know it.

Cliff Asness, who has run AQR for over three decades, put it best when asked about the collapse. “For the future,” he said, “let’s file the phrase ‘you never go full Kelly’ under the heading ‘things of which you should be situationally aware.’”

Going full Kelly means sizing a position for the theoretical maximum return with no allowance for the cost of being wrong. It’s a betting concept before it’s an investing one, and a fund calling itself Situational Awareness ought to have read its own name more carefully.

Aschenbrenner shouldn’t be ashamed of any of this.

Newton was the sharpest mind of his age. But Aschenbrenner should be humble if he plans to recover from this. Fool me once, shame on you; fool me twice, shame on me.

Newton’s genius didn’t save him, because markets aren’t a physics problem. They’re a nature problem.

You’d be better off understanding crowd behaviour than physics, if you want to understand markets.

Crowds don’t obey formulas, however elegant. That’s the part that trips up the brightest people every time: mistaking something genuinely complex for something merely complicated. Complicated things can be solved. Complex things can only be respected, preferably before they take $35 billion off you.

Steven Goldstein. Performance coach to traders, portfolio managers, leaders, and teams. Author of Mastering the Mental Game of Trading.

Most of what we at AlphaRCubed do is with people and businesses in financial markets. To find out about our Portfolio Manager Development Programmes, our Trader Performance Coaching Series, or a whole range of business performance development services, go to alpharcubed.com or reach out: info@alpharcubed.com.

New Podcast Episode

As co-host of The AlphaMind Podcast, which explores the human and behavioural side of trading, check out our latest episode: #157: The Market Doesn’t Care About Your Story — What The Body Keeps the Score Teaches Traders About Risk.

Listen here

The final whistle sounded at the World Cup. Spain had beaten Argentina to become world champions. But the TV cameras of the world didn’t rush to follow the celebrations of the winning team. Instead they zoomed in on one individual: the distraught figure of Lionel Messi, the greatest player in the world, inconsolable, barely able to hold back the tears of defeat.

His image remained on the screens as the cameras hovered. You could see the pain and hurt etched on his face. He wasn’t disguising it, hiding it, putting on a brave face. He was exposing his pain and his vulnerability to the world.

There was a voyeuristic cruelty to it. But for me, I saw something else. I saw someone willing to be open, honest and fully vulnerable on the biggest stage in the world.

And in that moment, I understood something about why he had become the greatest player in the world.

This idea, that showing your deepest vulnerability might be a hallmark of greatness, stands in stark contrast to the modern instinct to be stoic, unmoved, holding it together, unemotional. I don’t think these greats could have been the winners they were if they hadn’t been willing to let the pain of defeat show, in the most public way possible.

I’ve studied, followed and written about high performers across a variety of fields. I’ve seen the same pattern amongst the best: Ali, Djokovic, Bryant. They were never afraid to hide it, to let it all out. Calm, stoic, implacable in the game, then raw emotion pouring forward, sometimes after victory, but more pointedly after defeat.

These people are so invested in winning, in doing what it takes to come out on top, that they pour everything in, physical, mental, emotional, time, energy, because it matters to them. They make sacrifices others aren’t willing to make. So when the key moments don’t go their way, it hurts more, because they care more.

Now imagine it the other way. What if they didn’t care so much? What if, as a coping mechanism, they pretended not to and just shrugged their shoulders?

That apathy wouldn’t stay contained to a single moment, it would leak into how they approach everything. The near-100% effort that gets them where they are, at real sacrifice to the rest of their life, would vanish. They’d give 90% instead. And 90% doesn’t get you there.

Vulnerability lies behind relentlessness.

This matters for traders because taking risk and managing risk isn’t something you learn from a book, a paper trading account, or a backtest. Taking risk, learning, growing, and sustaining your progress: all of it requires vulnerability.

Vulnerability means putting yourself on the line. It is being willing to try, fail, get up, and go again, sometimes publicly. It is being willing to take chances that don’t work out, hear the disapproval of others, and carry on anyway.

I’ve experienced the cost of not being willing to make myself vulnerable as a trader. It doesn’t hit you at the time. In the moment, avoiding it actually feels comforting. It hits you later, when you reflect on the could-have-beens.

And I’ve seen it as a coach. I told a version of this story a few weeks ago, in The Paradox of Vulnerability.

Our wiring meets the Western meme

We’re not wired to want to look weak.

We’re wired to want the tribe’s approval.

For most of human history losing that approval meant losing everything.

That wiring hasn’t gone anywhere, its still in us, unchanged. It’s just swapped the savannah for the trading floor.

I see the same pattern on almost every coaching engagement. Someone protecting an identity built around already being successful, which comes at the direct expense of getting more successful. This isn’t a fault, or a flaw, it’s just how we are.

In practice, that looks like sizing a position at half of what the plan called for, because a loss would sting more than the win would please.

It looks like ignoring a signal you’ve tested and trust, because some part of you needs to be right more than it needs to make money.

It looks like taking profit well short of target, because banking a small win now feels safer than holding for the number you were supposed to get.

That’s the real mechanism. The number is just the trigger. The loss itself is data, but identity damage feels real, and the nervous system treats it as the bigger threat, reacting way out of proportion to the pounds and pence involved.

That’s why sizing down doesn’t fix the actual problem. You can protect the P&L and still be fully exposed on the identity side, because the position was never really about the money. It was a proxy for “am I right?” and that question doesn’t shrink just because the bet does.

Trading and taking risk means making yourself vulnerable to that. But the reality is, people aren’t judging you nearly as much as you think they are. They are too busy worrying about how others view them to be concerned about you.

So sit with this one: what is protecting your identity actually costing you?

The trade you won’t take. The client you won’t push. The return you’re leaving on the table because the downside feels louder than the upside deserves. The business decision, reasonable and rational, that you’re worried how it will be judged. The career change you’re afraid to make.

Success was never about hiding what’s vulnerable in you. It’s about being willing to show it.

Most of what we at AlphaRCubed do is with people and businesses in financial markets. But if this content is landing with you, there’s a good chance it applies to you too.

Reach out: info@alpharcubed.com, or find out more at alpharcubed.com.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

What if I’m wrong.

What if this works out and I’m not on it.

What if everyone else makes money but not me.

What if I end up feeling stupid, having had a feeling it might happen but didn’t act because it just didn’t quite tick all the boxes.

What if, what if, what if.

Damn it. Let’s hit enter.

That what if moment is fear masquerading as diligence. It substitutes panic for judgement, then has the nerve to call itself conviction.

We have a term for it. FOMO. Fear Of Missing Out.

The traders who told me FOMO made them better

Everyone tells you FOMO is the enemy. A handful of the traders I've coached, amongst them some of the most successful out there, have looked me dead in the eye and told me it was a key reason behind their success. Not despite it. Because of it.

That took some unpacking. One of them, a prop trader I’ll call Mo, running proprietary risk at a commodities house, has a psychometric profile that flags him as a highly emotional decision-maker. Away from the desk, that’s accurate. But when taking and managing huge risk, none of it shows. Calm through enormous positions, unbothered by noise that sends most people reaching for the exit.

His FOMO didn’t disappear. It moved.

And once you see where it moved to, you’ll want to check where yours actually lives.

Where FOMO shows up, and where it should

For nearly everyone, FOMO shows up at the worst possible moment: right at the point of action, the split second before you pull the trigger. That’s the moment we opened with. By the time it arrives there, it’s too late to be useful. It can only be disruptive.

But every trader who told me FOMO made them better pointed somewhere else entirely when I asked where on their cycle it actually lived. Not the trigger point. Earlier. Back where the actual work gets done.

To explain what I mean, I need to introduce a framework. If you’ve read my book, Mastering the Mental Game of Trading, you’ll know it as the Performance Process Cycle. A continuous loop, adapted from Gestalt psychotherapy’s cycle of experience, that maps how performance actually unfolds. If you haven’t, here’s the short version.

There are four phases, and they run in a loop. Because unlike your P&L, your process doesn’t reset to zero. It resets to the next lap.

Phase 1: Being and Sensing. You show up, hopefully without yesterday’s baggage. You observe, stay curious, resist the urge to already know the answer before the market has told you anything. You immerse yourself, notice what’s there, sense what’s moving beneath the surface.

Phase 2: Production. Something catches your eye. A signal, a headline, a disconfirmation, a number that doesn’t add up. You form and shape a view. Do you act or not? If so, how do you enter, size the position, decide what you’re prepared to be wrong about? You build expectations and contingencies. This is where the edge you hope to monetise actually gets built. This is where you decide, though you haven’t yet acted.

The Act Point is where decision becomes action. Or doesn’t. Not acting is an act in itself. From here, the cycle moves into performance.

Phase 3: Performance. No longer about preparation. This is execution and management. You don’t get to negotiate with the market. You navigate it, and you manage yourself through it, or you don’t.

The Outcome is the consequence of everything that came before. Some of it in your hands, much of it not.

Phase 4: Letting Go. More on this shortly. It matters more than most people realise.

Back to Mo

Mo’s FOMO lives entirely in the Production phase, but not at the end of it, hovering just before the Act. It kicks in right at the start, just after the trigger.

If Mo hasn’t prepared properly, he knows, with some genuine dread, that he’s going to fail. That dread does the disciplining for him, early, while it’s still cheap. By the time the trade is live, he’s already relitigated every doubt he has. There’s nothing left to be afraid of except the market itself, and he’s decided that’s not his job to fear. It’s just weather.

For him, the fear isn’t what if I miss this. It’s what if I don’t do the production properly. His FOMO is a fear of sloppy preparation. By the time he reaches the point of action, there’s nothing left to panic about. He’s already had the argument with himself.

This is not simply a technique. It’s an entire philosophical reframe of how you work.

FOMO further upstream, attached to the fear of under-preparing rather than the fear of missing out, stops being a derailer. It becomes a weapon.

The takeaway isn’t to eliminate your FOMO. Good luck with that. You’re human, not a spreadsheet. The takeaway is to notice where on your own cycle it actually lives. If it’s loitering around the trigger point making decisions for you, that’s a process problem. Move the fear upstream. Get proactive, not reactive. Let it make you thorough instead of jumpy. Then, when it’s time to act, act like someone who already did the worrying somewhere else. Because you did.

On Letting Go

I said I’d come back to it, and I meant it. Letting Go gets the least attention of the four phases, and that’s exactly why it matters most.

Too many people treat the cycle as three phases with a loose ending. It isn’t. Letting Go isn’t a nice-to-have tacked on at the end. It’s the phase that decides whether you walk into the next cycle clean, or whether you drag the last one in behind you. And if you’re dragging the last one in with you, you were never really starting a new cycle. You were just running the old one with extra baggage strapped on.

The ability to properly reset, to release whatever was troubling you on the last trade, the pattern you got stuck in, the belief you’d fused with your identity, is a genuinely rare ability. Most people carry the last cycle’s residue straight into the next one and call it experience.

It’s not unlike moving your FOMO upstream. Both ask you to do the work before the moment demands it, on discipline alone rather than urgency. You can’t force either one. You can only build the habits that make them more likely.

Letting Go deserves its own newsletter, and it will get one. For now, just know that skipping it isn’t neutral. It costs you the next lap.

The important versus the urgent

The topics I raise here don’t register as urgent in the world of trading. Urgent is what happens to your positions if Trump changes his mind, what the earnings picture looks like for company A, how you react to a sudden dip or rally. Urgent is your every day. Your reality.

What I write about, and work on with the people I coach, is the important stuff. How do you get better. How do you build a process that holds up under pressure. How do you become, over time, a more consistent, more resilient, more self-aware version of the trader you already are.

When you look back at some future point, that Truth Social post will just be a data point in the noise. The work you did on yourself will have mattered. Hopefully this nudged it along a little.

Seven things to take away

1. Performance runs in a cycle: sense, produce, perform, let go and reset. Know which phase you’re actually in.

2. Emotion isn’t noise. It’s data. Treat it as a signal, not something to suppress.

3. Where fear shows up in your cycle matters more than whether it shows up at all.

4. FOMO at the point of action is a derailer. FOMO in preparation is a weapon.

5. Don’t try to kill your fear. Relocate it upstream, into the work.

6. Track where your fear actually turns up. If it’s arriving late, your preparation isn’t finished and your process is probably sub-optimal.

7. Reset properly, every time. Skip Letting Go and you carry the last cycle straight into the next one.

Get in Touch

If any of this is landing and you’re curious about the work we do at AlphaRCubed, coaching and performance development for traders, teams and firms, we’re always open for a conversation. Reach out and we’ll set up a call: email info@alpharcubed.com or click here.

You can find out more at alpharcubed.com. And if you want the fuller version of the Performance Process Cycle, it was first introduced in my book, Mastering the Mental Game of Trading: https://amzn.to/44qTY26

There is a specific moment, repeated millions of times a day across every trading desk and every retail account on earth, that has nothing to do with strategy and everything to do with how humans process information. It is the moment someone looks at their P&L.

Nothing about the number itself is new. The trader already had a rough sense of where they stood. But knowing something and seeing it are processed differently by the brain, and that gap explains more about trading behaviour than almost any strategy variable you could name.

The number arrives with no context attached

Picture three very different traders, all looking at their own version of the same number.

A day trader, six trades into the session, down on the day, watching the figure flicker red with every new print. A market maker, quoting hundreds of times an hour, glancing at a running P&L that’s bounced either side of flat all morning on a book that’s structurally sound. A hedge fund portfolio manager, checking the monthly figure on a strategy with a real, proven edge, watching it sit red for a third month running, in a business built entirely on the promise that patient capital eventually gets rewarded.

Three completely different timeframes, three completely different jobs, and the same failure mode available to all three of them. The number carries none of the context that would make it meaningless. It doesn’t know it’s trade six of a two hundred trade sample. It doesn’t know it’s month three of a strategy that needs a full year to prove itself. It simply presents itself, stripped bare, and each of those three professionals is one glance away from doing something to their process that the process itself never asked for.

This isn’t irrational, exactly. It’s just old. For most of human history, information arrived attached to consequence. If something looked dangerous, it usually was. Our brains never developed a separate channel for a dangerous-looking number that is actually within normal statistical variation. So the P&L, stripped of the context that would render it meaningless noise, gets processed with the same urgency as an actual threat.

Daniel Kahneman’s work on loss aversion found that losses feel roughly twice as painful as equivalent gains feel good. Apply that to a trading process with genuine positive expectancy, and you get a strange result: a strategy that is working exactly as intended can still produce a felt experience that is net negative, simply because of how the wins and losses are weighted emotionally rather than mathematically. The spreadsheet says one thing. The person staring at it experiences another.

The chart above illustrates the point directly. The black line is a simulated P&L path for a system with genuine positive expectancy, built from a random number generator, the kind of return profile that any sound process eventually produces given enough time. The blue line beneath it is the same underlying data, run through a simple transformation: every positive week is left untouched, every negative week is doubled, to roughly replicate the loss aversion effect Kahneman documented. Call it the emotional P&L.

Nobody actually trades against the black line. The account statement might say the black line, but the felt experience, the one governing confidence, patience, and impulse, runs far closer to the blue one. A system that is unambiguously working can still feel, week to week, like a slow bleed, simply because losses are processed with roughly twice the emotional weight of equivalent gains. That gap between the two lines is not a flaw in the trader. It is the standard operating cost of running any genuinely good process through a human nervous system.

Think about what that’s actually doing to you.

Think about how differently you receive good news versus bad news, when the two are supposed to carry equal weight.

Think about how much more real bad news feels the moment it lands, how much faster it convinces you, versus how quickly good news gets discounted or waved away.

Think about how it comes to feel more likely that something will go wrong than that something will go right, even when the probabilities are identical.

Think about how that quietly reshapes the way you size a position, weigh a probability, or judge a possibility, always leaning towards the version where it fails.

Now think about where that’s operating on you specifically. When you’re quoting a client. When you’re sizing into a market vacuum. When you’re putting a trade on, or adjusting a portfolio that’s already live. Think about how easily you drift from theory into hope, and sometimes from hope into something closer to revenge.

It’s all sitting there in that chart.

What’s notable is that this problem doesn’t shrink with experience the way most trading skills do. A trader with twenty years of history can still feel their stomach drop at a red number exactly the way a novice does. The difference isn’t that the feeling goes away. It’s that the experienced successful trader has built something between the feeling and the action, an approach, a rule, a delay, a habit of checking only at fixed times, that others haven’t yet built.

This is the part I don’t have a tidy answer for

Your problem probably isn’t that your system or method isn’t working, it’s that you can’t adhere to it. And issues such as that raised in this newsletter are the reasons why.

This is usually the point in a piece like this where the writer hands over the fix. Three steps. A framework. Something you can screenshot and pin above the monitor.

I’m not going to do that, because I don’t believe this is a simple ‘How do I fix this’ question.

What’s actually being fought here isn’t merely a bad habit. Millions of years of evolution has created our human operating system with a built in threat-detection mechanism that fires long before reasoning gets a vote.

So the question becomes what to actually do about it. Not in the abstract, and not in the calm of a Sunday evening when it’s easy to reason clearly. Not really in the moment the number turns red and every instinct is pointed at the mouse, nor in the moment it turns green, when rather than sit with it, you'd rather take it, for fear it goes back to red. This is not a minor irritation. It’s one that sits directly on top of long-term performance, on the P&L itself, and quite possibly on one’s sanity.

Readers who have followed this newsletter for a while will probably already sense where this is heading. The piece on the 3 Ps of High Performance is worth revisiting for a clue.

The resolution to this challenge is not a solution. It’s a philosophy, but it’s more than a philosophy, it’s a way of being, better able to manage in these difficult moments.

Getting to that is not a quick, or an easy, journey. But you do have a choice. You can start now, or you can start later, once more damage has been done.

This is the kind of gap AlphaRCubed's coaching work exists to close, between what people know and what they can actually do under pressure. If this resonated and you're curious what that looks like in practice, feel free to reach out.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

My coaching journey began in 2000 when my employer decided to experiment with trader coaching and volunteered me as the guinea pig. I was paired with a seasoned executive coach who knew the markets inside out. That pilot didn’t just transform my trading performance for the next decade; it sowed the seeds for the career transition I made fifteen years ago, and the work I still passionately do today.

But I so nearly turned down this career defining moment, because I wasn’t willing to be vulnerable.

When it was first put to me, I saw only the downside: how I, a senior trader, would be perceived. Having a coach meant admitting I needed help, projecting weakness to my colleagues. My first reaction was no. A week later, my manager sat me down and told me how much he'd benefited from coaching himself. Reluctantly, I agreed.

That reluctance, the fear of being seen needing help, was me refusing to be vulnerable. It sits right at the core of the work I do as a coach today. Being vulnerable is one of the most powerful forces I’ve ever seen for real change in trading, in risk-taking, in life.

The Royal Society Moment

I’m not sure I fully understood just how powerful the idea of making yourself vulnerable was until a couple of years ago, when I was asked to give the keynote speech at the 25th anniversary graduation event for the Academy of Executive Coaching (The AoEC, where I studied coaching many years earlier), held at the Royal Society in London.

Now, that’s not the kind of room where you want to wing it.

Which is exactly what I did.

I forgot to prepare. Properly forgot. Not “I’ll sort it on the train” forgot. I got to the day of the event and realised I had a speech to give that night, and a day packed with coaching clients to get through. So I pieced it together in about 30 minutes, a genuine brain dump with no plan for how it would land. The subject I came up with just popped into my head. And because I hadn’t had time to worry about how it would be received, I skipped that entire step of worrying whether it was even any good, or whether I would look and sound daft. I just wrote what I thought needed to be said.

The speech that night could not have gone any better. I walked up on stage, speech in front of me on the podium, read and delivered. The reaction from the audience was incredible. I felt a deep connection as I was talking. People weren’t just looking at me; I felt they and me were as one. I had gone into a subject that they all recognised and felt applied to them, and in doing so, I had shared some of my own vulnerabilities.

Afterwards, I could barely move, as people came up to me and wanted to share their own stories and struggles. For weeks after, people were calling me or sending thank-you messages because my words had triggered something in them.

Worrying what others think of us: way too much!

We’re all wired to worry what other people think of us. If there is one thing that hit me hard about coaching in the early days, it was that everyone does, from twenty-somethings a year into the job to people near the completion of forty-year careers at the top of the industry. I suddenly realised that it wasn’t just me; it was everyone. Everyone is worried what other people think of them.

And why this matters is that this mindset, this attitude, is subtly pulling the strings on everything we do. This is particularly pervasive in the trading industry, where any perceived sign of weakness in front of your colleagues is something to dread, such that it’ll make you make choices which are really not in your best interest.

In my book “Mastering the Mental Game of Trading” I shared a story from early in my coaching career. A large hedge fund had been on an expansion drive and had recently hired a group of new traders and analysts in its main Asia office. Young individuals, mostly hired from banks and investment firms, who they believed had the potential to become successful Portfolio Managers, and who they were keen to develop in a coaching programme. The firm was eager for me to work with the group but didn’t want to force the coaching on them. So they asked me to travel to the Asia office and give a one-hour talk to this group. There were about 15 of them, and the talk would inform them about the coaching, how it works, and how it would benefit them. It was then their choice if they wanted to engage me as their coach.

But giving that talk to the group, in a group setting, I sensed immediately that each attendee, mindful they were in front of their peers and fearing they’d show weakness, clammed up. Their body language betrayed a sense of: I don’t need help, I am already the finished article, I won’t show any vulnerability in front of others. No one even asked any questions during the session.

But two weeks later, I had a call from one trader who wasn’t able to make it to the meeting due to being on holiday. He wanted to follow up on what he had missed. As I told him about the coaching, sharing virtually the same message I told the group, he started asking me lots of questions. At the end of the call, assuming everyone else was keen to do the coaching, he asked how he could get to the front of the queue, not realising there was no queue.

We worked together for several years. After about four years, none of the rest of the group were still at the firm, but the individual I worked with went on to become the senior PM in the Asia office, and eventually a partner at the firm. I always wonder if he would have taken the coaching, if he had been part of that group, and whether this would have had an impact on how his career progressed!

It’s not a flaw

Worrying what others think about us is not a flaw; it’s in our DNA. We’re social animals, wired for the approval of the group, because for most of human history, losing that approval meant losing everything. Getting cast out of the tribe was effectively a death sentence. That same wiring hasn’t gone anywhere. It’s just swapped the savannah for the trading room, the office, the modern world.

But allowing what people think of us to worry us ‘too much’, that is highly problematic.

In the original edition of Jack Schwager’s superb Market Wizards, he landed a profound interview with trading legend Ed Seykota, who said something that’s stayed with me ever since: “Win or lose, everybody gets what they want out of the market.” For many, what they really want is the approval of their peers, even if it costs them money or comes at their own expense.

Likewise, in his brilliant book The Psychology of Money, Morgan Housel wrote a chapter called “The Man in the Car Paradox,” which refers to our tendency to want others to admire us, when in fact people rarely notice us, they’re too busy imagining themselves in that position.

The Paradox

These two examples from the finance literature betray a truth I see on many client engagements: people busy protecting themselves and their identity at the expense of their chances of success. As the famous line from The Wolf of Wall Street goes, “The only thing standing between you and your goal is the bullshit story you keep telling yourself.”

I often come across clients trying to hold on to an identity built around them being successful, and being seen as successful. The paradox is this: the more willing they are to be vulnerable, to put themselves and their process out there and accept that it might not work, but also that it might, the better their outcomes get.

In practice, that looks like not backing yourself with proper size, putting on half the risk your plan called for because a loss would sting more than the win would please you. It looks like ignoring a system signal you’ve tested and trust, because some part of you needs to be right more than it needs to make money. It looks like taking profit well short of your target, not because the market told you to, but because banking a smaller win now feels safer than holding for the number you were actually supposed to get.

They succeed, not because they are hiding their vulnerability, but because they are willing to expose it.

As for the judgment you’re so busy trying to avoid. Well if everyone else is preoccupied with what other people think of them, they are probably far too busy to be thinking about you.

So the question worth sitting with is simple: What is it costing you to protect your identity? Is it the trade you won’t take, the business you won’t grow, the client relationship you won’t push, or the return you’re leaving on the table because the downside feels louder than the upside deserves?

Your success doesn’t require you to hide vulnerability; it requires you to be willing to expose it.

I look forward to continuing to exploring the game of trading with you in upcoming newsletters.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

At the crux of trading is risk taking. At the crux of succeeding at trading is becoming better at risk taking.

Obvious, isn’t it. Almost too obvious to write down.

And yet almost nobody does the work to actually become a better risk taker. Instead they do more analysis. They refine their systems. They dig deeper into the data, convinced that the next model, the next edge, the next dataset is where the improvement lives.

All of it is deflection. A very sophisticated, very time-consuming way of avoiding the actual and rather painful truth.

The problem is most people don’t know where else to go. Analysis has a process. Data has a process. “Becoming a better risk taker” doesn’t come with a manual, so people retreat to the thing that does.

A story I’ve told before

Thirteen years into my career, working at investment banks in London, I thought I was good at trading. I’d been promoted. I’d had some very strong periods and a few poor ones, self-doubt and confidence, the normal rhythm of the job. My conclusion, most of the time, was that I just needed to pull my socks up.

Then I went through a coaching programme, and it caused me to reflect deeply on a few things that came up in it. And it struck me: I wasn’t actually that good at taking risk. - And yet my job was ‘taking risk’!

I was okay at it. But okay doesn’t cut it. Okay got me to where I was, but it wasn’t going to take me any further. In trading, elite sports, generally, you don’t stand still. You either move forward, or you start slipping backwards.

Go and look at elite athletes. Plenty of people are okay. But those who are okay don’t make it very far, and they rarely sustain a successful career in it. Even at the pro level, you might make a few glorious appearances, but okay won’t get you anywhere near the podium. Getting there takes something well beyond technical acumen. Mindset. Assuredness. Self-alignment. Self-belief. Self-awareness. Self-trust. Self-confidence. Self, self, self. Ultimately, it’s all about the self.

Risk taking in trading is no different.

What I actually found

Being brutally honest with myself, I was caught in a cycle of avoidance, excuses, blame, deflection, and identity preservation, all in service of protecting my previous sense of self, and the ego attached to it.

That’s the bit nobody tells you. Risk taking isn’t a technical skill sitting next to your market knowledge.

Instead it’s largely about the quality of the relationship you have with yourself, in the moment, under uncertainty, under scrutiny, both from others and from yourself. Sure, you need the technical grounding; you need to know the market and the trade. But at the core it comes down to who you are, how you’re being, and how willing you are to trust yourself with the risk in front of you.

Where do you actually sit?

How would you honestly rate yourself as a risk taker, in the way that’s actually required for the type and style of trading you do? Ten out of ten is off the table. Perfection isn’t on offer. But what could you realistically be? An eight, a nine? What would you be happy with? And what score would you need to hit, consistently, to actually see the success you want showing up in your results?

Then the harder question. Where do you actually sit right now? Not on the good days. On aggregate, across the good and the bad. A three? A four? A five? If you’re not at an eight or a nine, what are you doing about the gap?

Here’s my own honest reflection from that time. With regard to my analysis as a trader, I’d argue I was and eight, maybe close even to a nine. I was a good analyst. But as a risk-taker? Somewhere close to a two or a three. I had good periods, and I was a senior trader at a major investment bank, so from the outside I probably looked far better than I actually was. But what I think was really happening was I was preserving my identity, holding out in the hope I wouldn’t be found out, and actually avoiding real risk taking altogether.

The good thing about falling that short, however, was there was massive room for improvement. And having recognized it, and been honest with myself about tit, that’s what I started to work on, and towards.

This piece isn’t the answer

This week’s newsletter isn’t meant to resolve anything, it’s just here to poke, provoke, and evoke. To make you think. It’s meant to needle you a bit. Whatever level you’re at, whether you’re struggling or already doing well, the real battle never changes: getting better and better at taking risk.

There are different styles of risk taking, and we’ll get into those another time. But start here, be honest with yourself: are you actually present when you take risk, or are you managing your own comfort instead?

So sit with that for now, and reflect on yourself.

I look forward to continuing to exploring the game of trading with you in upcoming newsletters.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

Every trading system, method, approach has a theoretical return ceiling.

It doesn’t matter what method you use, what markets you trade, or how sophisticated your process is. Given a particular set of conditions, your approach has a level of performance it could theoretically deliver - what’s possible. Not perfection, just what’s genuinely possible if you executed well, consistently, and without getting in your own way.

The gap between that and what you actually return? That’s Behavioural Slippage (Or Behavioral (‘u’ removed) for those on the other side of the Atlantic).

Behavioural Slippage is not transaction costs, it's not the cost of crossing the spread, nor the cost of the loss of liquidity, or of funding positions, nor is it market impact.

Behavioural Slippage is the stuff that happens between the idea, or the signal, and how you execute or transact. It’s hesitation, doubt, worrying about what-ifs, or what-if you don’ts, and a thousand other behavioural factors.

Every trader has it. No exceptions. Druckenmiller, Tudor-Jones, Qualamaggie, they all have it, and if football was trading, even Messi would have it.

The game, once you know what to do, to achieve what’s possible, is to not let your behavioural slippage drag you down.

A real-life example

I worked with a client early in my coaching career, a hedge fund trader who’d come through the investment banking world. He was smart, experienced, extremely capable, and very well-resourced, yet deeply frustrated.

Three years into his role at the fund, his returns had been continually disappointing. He felt he could have, and should have, done so much better. It wasn’t that the opportunities weren’t out there, or that the calls he made were bad, quite the opposite in fact, but he was performing at a level he described as ‘dismal’. And his firm knew it, too. He was quietly informed that without meaningful improvement, another year was unlikely.

What made this situation unusual however, was something he’d been doing almost obsessively since day one at the firm: he’d kept a detailed record of every trade idea he’d had. Not just the trades he’d taken, but the ones he’d wanted to take. The entries and exits he’d planned. The sizing he’d intended. The contingencies he’d mapped out for how each trade might develop.

It was an extraordinary document, featuring a level of record-keeping I had rarely seen. I suggested he do something with it that he’d never thought to do before. I asked him to go back over those three years and build a theoretical performance record. Not what he’d actually done, but what he would have done if he’d executed on every idea exactly as planned, following each trade idea through to its intended conclusion.

He spent several weeks diligently transferring the data into a spreadsheet and analysing the results.

When he looked at the final numbers, he was stunned. His theoretical returns averaged around 45% per year. One year was close to 60%. Against his actual returns of 3% to 4%, the scale of what he was leaving on the table was almost impossible to take in.

Now, we both understood that those theoretical returns weren’t fully achievable. Back-of-the-envelope records don’t account for market impact, position sizing constraints, or the compounding complexity of running multiple live trades simultaneously. You can’t just multiply every good idea by perfect execution and assume it all works out. But even discounting heavily for all of that, the realistic upside was somewhere in the region of 20% per year. A number that would have put him among the best performers in the firm, ever.

That gap, between what he was returning and what was genuinely possible—that was his behavioural slippage. And once he could see it in numbers, he couldn’t unsee it. He had to do something about it.

That was the easy part out of the way.

The coaching then became deep. Where specifically was the slippage coming from? Was he not backing his own ideas? Taking profit too early? Letting losses drift further than his process called for? Not sizing up on his highest-conviction trades? Over-sizing when he was pressing? The answers, as they usually are, were layered and personal.

What seems obvious on the surface is usually just a symptom of something much deeper. Dealing with symptoms just pushes the issue somewhere else. Going deeper into his process, his way, his approach, and his philosophy, looking for misalignments and clues as to what was causing the behavioural slippage to such an extent, and then addressing them: that was the coaching work. The heavy lifting, the hard yards. But he was willing to go there.

By the end of that next year, in a difficult market environment, he returned 12%. He was in the top decile of the firm, north of the bottom quartile for the first time. He stayed. And he kept performing at that level for years afterward.

The Reality of Behavioural Slippage

Human behaviour, your behaviour, and the concept of ‘Behavioural Slippage’ frame something that gets lost in most conversations about trader performance.

People, businesses, and managers spend enormous amounts of time trying to find better systems, better signals, and better data. That work matters. But for most experienced traders, the bigger opportunity isn’t in the technical; it’s in the execution of the technical they already have.

The framework I find useful is thinking in terms of three levels: what’s possible, what’s probable, and what’s actual.

• Possible represents that theoretical ceiling, what the method could deliver.

• Probable is the realistic version once you account for human variability and market reality.

• Actual is what ends up on the P&L.

Most traders sit significantly below probable. The gap between probable and actual is behavioural slippage. It represents real money, money left on the table, money not taken home every single year. In many cases, it is the exact difference between success and failure.

That’s the work. And for many traders, it’s the most important work they’ll ever do.

I look forward to continuing to explore this game with you in upcoming newsletters.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

What is your purpose right now?

Not your target. Not your P&L goal. Not what your risk manager expects from you this quarter. Your purpose. The real one. The reason you are doing this.

There is a triangle I draw at some point with almost everyone I work with. Purpose sits at the top. Process at the bottom left. Presence at the bottom right.

Simple. But the things that matter usually are.

Purpose

Purpose is your North Star.

Not a destination. A fixed point of orientation. The thing you navigate toward, even when visibility is poor, even when the route keeps changing, even when you have temporarily lost the thread of where you are.

Purpose is not your goal. Goals matter, but they are downstream of purpose, and they need to be able to flex to changing and emergent realities. A goal that becomes rigid starts pulling you in the wrong direction. Purpose is steadier than that. It is your intention. Your why. Your values. What you are actually here to do, and what kind of performer you are committed to being.

Most people in high-performance roles think they know their purpose. Many do, in calm conditions. But put them under real pressure, and a surprising number discover their stated purpose and their actual operating purpose have quietly diverged. Often without them noticing.

That is where the ego comes in. The ego is not your enemy. But it is an opportunist. The moment your focus wavers, it quietly replaces your real purpose with its own agenda: protect yourself, look good, avoid embarrassment, get even. None of those are purpose. All of them feel like it in the moment.

Process

Knowing your purpose is not enough. You need a way of pursuing it.

Process is the bridge between intention and outcome. It is everything from how you prepare and engage, to how you make decisions under pressure, manage risk, and recover when things go wrong. It is your methodology, your discipline, your structured way of working in service of something larger than the trade in front of you.

Process is not glamorous. It does not feel exciting. On good days it feels unnecessary. On bad days it feels like it is failing you. But it is the only thing that connects where you are to where your purpose is pointing.

Without process, purpose is just a feeling. And feelings alone do not produce consistent performance.

Presence

This is the one people underestimate.

Presence is the active, daily discipline of staying connected to your purpose and your process, especially when everything around you is pulling you away from both. It is not a state you achieve once. It is something you return to, again and again, often many times within a single session.

Presence is what separates people who know what they should be doing from people who actually do it.

And it is harder than it sounds. Because the enemy of presence is not distraction. It is drift.

Drift

Here is the thing about drift. You never feel it happening.

You skip process once. Nothing bad happens. You skip it again the next day. Still fine. A week passes. A month. You are still here, still functioning, still surviving. The drift has become normalised, possibly worse, habitualised, and you have stopped noticing it because there has been no obvious consequence.

But imagine some five years into the future. Compare where you are with a version of you that stayed with their process from day one. - I would happily wager that not only is that version far better off in terms of performance, but it has a fundamentally different relationship with the purpose you originally set. Purpose and process feed each other. Neglect one long enough and the other quietly starves.

Drift is not dramatic. It is quiet, cumulative, and almost invisible until it isn’t. That is precisely what makes it dangerous.

And when you have drifted far enough, something shifts. The trades blur. Decisions lose their shape. You are no longer operating from purpose. You are reacting. And the further you drift, the harder it becomes to even remember what you were navigating toward.

No one is immune to this: Every trader who spent enough time in the trenches will recognise the drift. Below, I share a story from a time in my career, almost 20 year ago, which highlights a period where I had drifted, and the damage it did..

2007

It was a strong year.

And then, somewhere within the third to the fourth quarter, almost without noticing, I started to drift.

The trades became aimless. Opportunistic. Nothing with real conviction behind them. Each one was small, but they were accumulating, quietly eroding what had been a very good year.

Then I found a genuinely good trade. US two-year yields, short, positioned for the Fed to start cutting rates. The analysis was solid. The conviction was real. I got in.

Then I made a stupid error. A stop triggered on a spike I should never have been exposed to. A completely fixable mistake. All I had to do was restate the position and move on.

But my ego had other ideas.

I tried to be clever. Minimise the damage, claw something back, show I could navigate my way out of a mess of my own making. I traded around the position, badly, for days. The market moved forty basis points in my favour. A huge move in a short space of time. I not only left every point of that on the table, I actually managed to lose money on a correct call.

Out of sync. Not connected to my purpose. Not on my process. Not present to anything except my own frustration and my ego’s need to fix what it had broken.

The Reset

The antidote to drift is ‘The Reset’. Not trying to fix what has failed, but returning to your purpose, the process that serves it, and becoming fully present to both.

At some point, I stopped trying.

I decided to pull out my journal and write. I scribbled down four pages in what felt like five minutes. Everything that had been building in my head for weeks poured out onto the page. And somewhere in the middle of it, something shifted.

Clarity returned. Not suddenly. More like the noise fading.

I went back to the question I should have been asking all along. Why am I here? What do I actually do? - What is my purpose?

I looked at the trade with fresh eyes. It had moved significantly, but my conviction hadn’t shifted. If anything, it had grown. I recalibrated the target, sized the position appropriately for where it now sat, and re-entered.

I held it. I managed it cleanly, ran it for several weeks and eventually exited near the end of the move.

I made back everything I had lost, and more. It became one of the best trades of my career. Not because the analysis was exceptional — I had done that weeks earlier. Not because of the size or the P&L. But because of how I acted through it.

What the 3 Ps are really asking

They are not asking you to be flawless. They are asking you to notice when you have drifted from your North Star, and to have the discipline to find your way back.

Purpose is your North Star.
Process is how you navigate toward it.
Presence is keeping your eyes on it, especially when the cloud cover rolls in.

When you can stay present to both purpose and process, something changes. You become more resilient. More adaptive. More capable of absorbing what the market throws at you without being knocked off your axis.

That is what elite performance looks like from the inside. Not the absence of difficulty. The capacity to stay grounded within it.

A practical tip

Write this on a yellow sticky note and put it somewhere you will actually see it. Or even better, print off the triangle image on this newsletter and pin it somewhere visible as a reminder.

Purpose. Process. Presence.

Not as decoration. As a tripwire.

Because there will be moments, and you know exactly the ones, when your head is deep in the micro-volatility and nothing exists beyond the next tick. When a drawdown has compressed your thinking to a pinpoint. Or when things are going well and the euphoria is quietly leading you somewhere your process never sanctioned.

In those moments, look at the note.

It forces a shift. It pulls you back far enough to see the bigger picture. It reminds you that a robust process delivers its results over time, not in the exact moment you need it to, and not on a schedule your ego would have chosen.

This is a marathon. The people who run it well are rarely the sharpest or the most analytical. They are the ones who stay connected to why they are here, and who keep finding their way back when they drift.

I look forward to continuing to explore this game with you in upcoming newsletters.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

Strong Opinions, Weakly Held is a vital maxim for trading. It reminds us that while we need conviction and clear narratives to engage with the market, we must always hold those views loosely. The market is a complex, emergent, and radically uncertain environment. At best, our perspective is a probability call. But hold an opinion too close, and it becomes your identity.

When I became my Strong Opinion

My trading career was progressing well, I had achieved some great success trading, and on the back of a strong year, I was asked to join a new Proprietary Trading desk being set up at Credit Suisse in London.

This was the mid-1990s, the height of the burgeoning Prop Desk scene in London banks, the forerunner of much of what became the hedge fund industry. We were given free licence to trade a vast array of products and markets, with real freedom and in sizeable risk amounts.

My confidence was high. I’d produced strong performance over the previous couple of years, and I believed in my ability to keep doing so. To a degree, I felt unstoppable. That, as I would later understand, was the first warning sign.

As I entered the new year, I was scanning for ideas, watching markets, reading research, looking for trades with strong risk-reward set-ups. I developed a view that the US stock market was running into resistance, top-heavy after a year of rising interest rates. I started building a put option structure to capture a downside move in the index.

The trade immediately went my way. Within days, the index dropped around 2%. It looked good, very good. In today’s context, that’s an immediate 150-point drop. And that’s when a more dangerous thought crept in: this is the trade that’s going to make my year.

That should have been a red flag. The moment you think like that, you begin to attach your value, your identity, your future, to a particular outcome. And when that happens, you and your opinion start to quietly merge.

On the daily chart of the S&P 500 in January 1995, you can see roughly where I shorted and the immediate move that followed.

But looking back, I was being set up. The sharp move fizzled-out and reversed quickly. The option strategy returned to breakeven.

I told myself it was just a pullback before the bigger move lower.

Then the market started to move against me. I went back to the research and reports I had read. Their authors were convinced this was temporary, that the real sell-off was coming. I found comfort in that. What I didn’t see at the time was that I was now deep in confirmation bias, actively seeking out voices I knew already agreed with me.

My ego was satisfied. My opinion was reinforced. And without realising it, the distance between me and my view had closed entirely.

In the weeks ahead, the market moved against me with increasing vigour. The doubts that should have surfaced manifested instead as stubbornness. I held on when clarity would have told me to get out. I thought I was keeping my pain hidden, but you can’t hide pain. My colleagues could see it.

Then one day, one of them said: “Steve, why don’t you just get out? It’s clearly not working. Close it down and accept you were wrong.”

My response still makes me wince: “I’m not wrong. The market’s wrong.”

When I finally exited, the loss was significant. Not catastrophic on paper, but psychologically I was in a very bad place. Every trade that followed over the coming weeks and months bore the scars: hope trades, revenge trades, poor calls, and even worse risk management. The losses mounted. And it all began with a Strong Opinion that I had refused to hold weakly.

Why Did It Feel Like an Attack?

I have reflected on that moment, my colleague’s advice, my reaction, more times than I can count. And the question that keeps returning isn’t how did I lose so much? but why did being told I was wrong feel like such a personal threat to my self?

He was obviously right. The evidence was plain. So why did his suggestion feel less like useful advice and more like an assault?

That question has a real answer, and it comes from an unexpected place.

What Was Actually Happening

In the psychological framework that underpins my coaching work, what I experienced maps cleanly onto a concept from Gestalt psychology called Confluence.

In healthy trading, and in healthy thinking of any kind, there is a clear boundary between you and your opinions. You hold a view. You can examine it, question it, update it, release it. You and it remain separate things.

In Confluence, that boundary dissolves. You no longer hold the opinion. You are it. When that happens, any challenge to the view stops feeling like new information and starts feeling like a personal attack. There is no longer any gap between you and what you think, which means there is no space for fresh data to land, no room for doubt to surface, no possibility of changing your mind without feeling like you are losing yourself.

This is why I said what I said. I wasn’t being stubborn for the sake of it. I was defending my identity, because at that point my identity and my trade position had become one and the same thing.

For traders, this is lethal territory. Confluence with a position or market view is precisely the state that stops loss-cutting, distorts incoming information, and turns a trade into an ego statement. When you are the opinion, you enter a closed loop that endlessly confirms itself. In trading, that loop has a name: the death spiral.

I explore all of this in much greater depth in Mastering the Mental Game of Trading, where I introduced the Performance Process Cycle as a practical framework for catching these psychological traps before they take hold. It grew directly out of experiences like the one I’ve just described, and the years of coaching work that followed.

How Great Traders Do It Differently

If you’ve spent time around serious traders, you’ll have heard the phrase Strong Opinions, Weakly Held. It was brought into sharp focus for many by Jack Schwager’s interview with Peter Brandt in Unknown Market Wizards, where Schwager used it as the chapter title. Brandt spoke candidly about how central it is to his approach: hold your views with conviction, but keep them loose enough to release when the evidence demands it.

Simple to say. Remarkably difficult to do, because it runs directly against some of our most basic human instincts.

The antidote is to get ahead of it, and it begins with how you come to your work at the very start of any trading process. You must turn up in the right frame of mind, being genuinely open: no predetermined bias, no attachment to outcome, a real curiosity about what the market is actually saying rather than what you want it to say. Humble. Objective. Present.

The difficulty is that we can lose that openness at any moment. The drift from conviction into confluence can happen so gradually that you don’t notice it until you are already trapped. Which is why Strong Opinions, Weakly Held isn’t just trading advice. It is a form of psychological hygiene, the ongoing discipline of keeping a clear boundary between what you think and who you are.

The Market Simply Is

There is one more idea I want to leave you with, and in some ways it is the foundation beneath everything else written here.

I said earlier that I told my colleague the market was wrong. I’ve thought about this phrase many times since. It reveals something important, not just about my state of mind in that moment, but about a misunderstanding that many traders carry without realising it.

The market is neither wrong, nor right, ever. It doesn’t have an opinion. It doesn’t know your name, your position, or your pain. It is not conspiring against you, rewarding you, not setting traps despite what I wrote earlier. Those traps are set by us, for us. That’s why we talk about ‘self sabotaging’ so often. No, the market simply is.

When I said the market was wrong, I was doing something very human but very costly. I was projecting onto it. I was treating it as an adversary that had made an error, rather than an environment I had failed to read clearly. That framing let me stay in the trade, because if the market was wrong, all I had to do was wait for it to correct its mistake. It never did. It never does. Because it doesn’t make mistakes. It just is.

Strong Opinions, Weakly Held. Not as a technique, but as a way of being.

That, is the whole game.

I look forward to continuing to explore this game with you in upcoming newsletters.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

In the second issue of Mastering the Trading Game, we began introducing a helicopter view, actually more of a satellite-orbiting view, of the ecosystem of financial and commodity markets. We looked at the place where the game is played, its real-world purpose, and the roles and functions of the main players within it. The aim was to invert your understanding of markets by taking you, a participant in those markets, to a vantage point where you can see the broader system you inhabit from the outside.

Why start there? Because how the system is shaped affects how you behave inside it. Everything flows from that.

That issue, titled Flow: The Lifeblood of Markets, introduced the primary market system through three concentric circles. Producers at the centre, end users at the outer edge, and the commodity houses sitting in between as the market-makers, the stallholders who make the whole thing function.

In this issue we zoom out further. But first, a quick recap.

The Primary Market System

The diagram below shows the primary market system introduced in the last issue. To keep things clear and grounded, we use a regular physical commodity market, iron ore, as our working example.

At the heart of the primary market system is flow. The constant movement of buy orders, sell orders, hedge transactions, and the liquidity they create. For the traders operating inside this system, flow is everything. It is their business, their edge, and their source of privileged information that exists nowhere else. Those who know how to read it are sitting at the centre of a real-time intelligence stream that no research report or data terminal can replicate.

These traders are not running a “run your profits, cut your losses short” approach. They operate across two broad ends of a spectrum.

At one end, traders warehouse complex portfolios of risk across multiple delivery dates, contract structures, and product types. They manage their books carefully and continuously, capturing the spread, making a turn where they can, playing the relative value, basis, and long-short games, and leaning into the insights that flow from their deep exposure to the system. That exposure allows them to position themselves favourably when larger directional moves begin to develop.

At the other end, traders move in and out of the market rapidly, in significant size, reading short-term situational cues and extracting value from them with precision, what most would recognise as a scalping style.

Both approaches add liquidity to the market. Both focus on monetising flow, using it as a source of informative insight in addition to more traditional analytical techniques including fundamental analysis, supply and demand data, technical analysis, and quantitative modelling.

In professional circles these are often called short-vol approaches. Readers of my book will recognise them as the House Approach, analogous to being the house in a casino. They share several critical characteristics: large volumes or high turnover, or both, and a high degree of complexity. As a general rule they lean toward high risk, low reward set-ups, with high win rates. Capital usage is often very high, requiring constant observation and disciplined risk management, with strict risk limits often set and monitored externally.

These short-vol/house-edge approaches tend to produce regular wins, often modest in size relative to the capital at risk, yet capable of accumulating into very significant profits. But they also carry a sting in their tail: When they lose, losses can be large, very large, or in extreme cases catastrophic. Traders have their own language for this style of trading: Picking up pennies in front of a steamroller. Or the more colourful: eat like a bird, defecate like an elephant.

Though the market system we explored is physical, it also includes a derivative market that frequently dwarfs the purely physical market in size. Derivatives are used to hedge risk, manage risk, and add additional market exposure. They are an extension of the primary market, tethered to it, but operating at considerably greater scale. For most traders outside the primary market, derivatives are the primary means of gaining exposure to it, futures, options, forwards and swaps replacing the physical product as the instrument of choice.

The Broader Market System: Hedge Funds to Retail Traders

The diagram above shows the broader market system, with the primary market diagram reduced in size to reveal a more expansive picture of the wider ecosystem.

The broader marketplace, also referred to as the secondary market, is represented by the wide blue circle bordering the primary market. It represents the hedge funds, shaded in two tones, each reflecting a distinct style of approach.

The larger, lighter blue band represents the more active group of hedge funds whose traders, much like those inside the primary market, use short-vol and house-edge approaches, even though they sit outside it.

Most of these traders, known as portfolio managers in the hedge fund world, came from within the primary system itself, learning and honing their craft at large market-making and franchise firms such as investment banks and commodity houses. That background gave them a deep and well-developed understanding of how the primary market works, knowledge they carried with them when they moved to the buy side.

The challenge they now face is the loss of direct access to first-hand flow and its informational advantage. They also bear the cost of crossing spreads to enter and exit the market, which can weigh significantly on performance.

This group is well represented by the large pod-shop firms, Citadel, Millennium, Balyasny, and others of that kind.

The darker, thinner outer band represents the smaller group of hedge funds (or a smaller group of portfolio managers inside the large pod shops), whose behaviour more closely resembles that of investors, using longer-term, directional, or long-vol approaches. In my book I call these Player Style traders. They play against the house rather than trying to be the house.

It is worth noting that although hedge funds sit outside the primary market, their scale means they can exert a significant and at times distorting influence on it. The Avis short squeeze of early 2026 illustrated this with remarkable force (see chart below). A hedge fund built a 22% stake through call options, short interest reached close to 100% of the float, and the share price surged from roughly $148 to nearly $848 before collapsing back to around $182, all within a matter of weeks.

The underlying business had changed nothing. The distortion was entirely a function of positioning by participants sitting outside the primary system, bending the market temporarily but violently to their will.

Beyond the hedge funds, represented on the diagram by the thinner green band, sit the investment firms: asset managers, mutual funds, pension funds, sovereign wealth funds, and similar institutions. In aggregate value they dwarf the hedge funds, and their collective exposure can be enormous, yet they move far more slowly, holding risk for far longer, and generating a much lower level of day-to-day activity, hence the narrower width of their band on the diagram.

That said, this group is unlikely to be active in a market like iron ore, but may be deeply involved in markets where the underlying product is considered a recognised asset class.

And beyond them, at the outermost edge of the diagram, sits the layer most people reading this will know best: the tens of millions of individuals who trade privately, the retail traders, as well as proprietary trading firms (some of which also exist in the primary market as market-makers), and small family offices.

Though retail traders individually lack the firepower to move markets the way hedge funds can, collectively they are capable of significant impact. The GameStop saga of 2021 illustrated this vividly, a battle between major hedge funds holding large short positions and retail traders coordinating as a collective force, briefly turning the tables on the institutional players. Distortions driven by retail activity are also not uncommon in less liquid markets, particularly low-capitalised stocks, where the barrier to collective influence is considerably lower.

Distance: Disadvantage and Edge

One final and important point as we move outward through these circles.

The further a trader sits from the primary market, the weaker and more delayed the flow information becomes. Retail traders in particular are often too distant and too far removed from the system to benefit meaningfully from it. The signals they receive are faint echoes of what the traders inside the system are reading in real time.

I have the privilege of working with people across the full spectrum of markets, from those right at the centre of the primary system to retail traders operating at its outermost edge. I see people at both ends thrive, and struggle. What I consistently observe is that those who do well tend to understand their situational context and specialise accordingly. Which is why understanding your place in the market, and how that shapes your approach and behaviour, can be so valuable.

I also see the mistakes that come from misreading that context. One of the most common is the retail trader who tries to operate like an insider, applying the instincts and approaches of someone embedded in the primary market to a position that is fundamentally disconnected from it. The tools don’t translate. The signals aren’t there. The results are predictable.

There are exceptions. People who somehow manage to transcend that distance and defy the logic. They exist, but they are outliers, rare individuals for whom something in their make-up or method allows them to bridge a gap that defeats most. They also tend to have accumulated deep experience, which means they understand their position clearly and have managed to carve out a niche they truly know. They are worth acknowledging. But they are not the template.

But distance from the noisy centre can also be an advantage. Traders closer to the centre often see the pixels clearly but may lose sight of the whole picture. Those further out can take a more observational, patient approach, watching the system with greater clarity, seeing the larger moves developing rather than being caught inside the turbulence.

Seeing through a more systemic lens, these traders tend to develop a more natural orientation toward systematic approaches and Player Style strategies.

And it is here, at this end of the spectrum, that the old piece of advice finally finds its natural home: run your profits, cut your losses short. Not wrong. Just belonging to a very specific kind of game, played by a very specific group of participants, operating at a very specific distance from the centre of the system.

Which is exactly the point this issue set out to make.

If you missed the previous issue, Flow: The Lifeblood of Markets, you can find it here.

Next issue, we take a step away from the broad picture and zoom into something more personal — a specific behavioural pattern that catches traders at every level, often without them realising it until the damage is done. It is one of the most common things I see in my coaching work, and one of the least talked about honestly.

I look forward to exploring it with you.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

In the first newsletter of this series, I put forward the idea that much of the conventional wisdom that forms the backbone of trading education is either misstated or stripped of its context. To illustrate the point, I used the expression “run your profits and cut your losses short.” Every trader knows it. Few consistently live by it.

I’ve long been drawn to that idea myself, yet I’ve come to recognise something important: many successful traders do the exact opposite. They take profits quickly and give their losers more room, and it works for them. So how can the same piece of advice be both true and not true at the same time?

This sits at the heart of one of trading’s great paradoxes. Markets are rarely black and white. We see it constantly: the same news headline on one day triggers a sharp rally; a near-identical headline a week later barely moves the needle. Trading is not mathematics. It is not a world where A plus B reliably equals C. It is complex, uncertain, and frequently mysterious.

With that as our starting point, this second newsletter takes a step back. Rather than focusing on tactics or specific ideas, we’re going to take the helicopter view and look at markets as a system, because understanding what the market actually is, and how it functions, changes everything about how you approach your own place within it.

The physical marketplace

I want you to think of the markets you trade as a vast, interconnected ecosystem. Imagine a real physical marketplace, one with stalls, buyers wandering between them, and sellers competing for attention. A place where prices are negotiated, where footfall matters, where knowing the crowd is just as important as knowing the product.

To make this concrete, I’m going to draw on a market involving a physical, tangible commodity rather than something as abstract as an equity index or currency pair. That market is iron ore.

Iron ore is the raw material that becomes steel, which in turn becomes the girders in buildings, the frames in cars, and the components in countless everyday products. In a sense, we are all consumers of iron ore, just several steps removed.

The three circles

Picture three concentric circles.

At the centre are the producers: the mining giants who extract the ore from the ground and bring it to market. Think BHP, Vale, Rio Tinto. These companies dominate global iron ore supply and are motivated by one thing: selling what they dig up at the best available price.

At the outer edge are the end users: a wide range of corporations and industrial firms who buy raw ore and transform it through a chain of processing into finished or semi-finished steel products. Their need is reliable supply at a manageable cost.

In between sits the marketplace itself.

The market makers

This middle layer is where the commodity trading houses operate. Firms like Glencore, Vitol, Trafigura, Mercuria, and the Chinese state-owned CRMG. These are the stall holders. They don’t produce the ore and they don’t consume it. What they do is make the market function, connecting buyers and sellers, aggregating price, and providing the infrastructure that makes it possible to trade at all.

Around them sits a broader ecosystem of supporting participants: exchanges providing venues for futures, options, and swaps; investment banks involved in financing and derivative pricing; large proprietary trading firms who are major contributors to the derivatives market, which dwarfs the physical market in volume yet remains tethered to it; brokers occupying a smaller, more specialised role; and a wider layer of data, research, and advisory services that feed information into the system without ever transacting directly within it.

The diagram below shows this structure: producers at the centre, end users at the edge, and the marketplace with its various participants sitting between them.

Flow: the lifeblood of markets

But something is still missing from that picture: flow.

Flow is the orders moving through the system at any given moment, buy orders, sell orders, hedge transactions, the constant back-and-forth that keeps the market alive. Flow is what creates liquidity, and liquidity is, in many ways, the real thing being traded. Not future value. Not price discovery. Liquidity itself, second by second, minute by minute, expanding and contracting, and on rare occasions of genuine market stress, vanishing almost entirely.

But flow is more than just the lifeblood of the market. For those operating inside it, flow is also a source of privileged information that exists nowhere else. It cannot be found in a research report, a news feed, or a data terminal. It is only available to those who are in it.

Flow informs. It gives clues and cues about what is really happening beneath the surface of the market, often well before that information becomes visible to those on the outside. A sudden cluster of sell orders. A shift in the size of bids. A particular counterparty appearing repeatedly on one side. To the untrained eye these are just transactions. To someone who knows how to read the flow, they are signals.

This is one of the great hidden advantages of the market-maker’s position. They are not just facilitating transactions, they are sitting at the centre of a constant stream of market intelligence. And for those with the experience and the instinct to decipher it, that intelligence can be priceless.

It is also, of course, one of the reasons why trading from outside the system is a fundamentally different challenge. You are making decisions without access to that stream. Which makes understanding how the system works, and what the flow is telling those inside it, all the more important.

The diagram below brings this to life.

For the traders and trading firms operating inside this ecosystem, capturing value in the flow is their business. The commodity houses are not positioning for a macro view and riding it for months. They are building a book of risk, a warehouse of positions across varying delivery dates, contract structures, and product types, managing that book carefully and continuously. Their goal is to capture the spread, make a turn on each transaction, optimise where they can. And then do it all again tomorrow.

Notice what they are not doing. They are not running winners for weeks and cutting losers quickly. They are grabbing at margin wherever it appears and managing downside with discipline and precision. They are trying to generate footfall, encourage volume, and extract value from the movement itself.

That is the market-maker’s game. And it is a game that many traders outside of formal market-making firms are, consciously or not, trying to replicate.

They will of course occasionally hold positions and longer-term views, often informed by reading the flow, or by a strong sense of feel, or a compelling narrative with a carry advantage. But that is not really their game.

That's the market from the inside. Next week we zoom out further still. Until then, I’ll leave you with a question worth sitting with: if the market-makers are playing a completely different game to the one you were taught, what game have you actually been playing?

I look forward to hearing your thoughts.

Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com

If you’ve spent any time in markets, you’ve encountered the same recycled wisdom. Let your winners run. Cut your losses short. Manage your emotions. Trust your process.

Good advice, perhaps. But advice stripped of context is often no advice at all — and sometimes it’s quietly damaging. The reality is that “let your winners run” doesn’t apply to every style of trading. For many traders, the discipline is precisely the opposite: take profits quickly, and manage risk through a robust, specific framework. Yet the received wisdom keeps circulating, passed along as essential reading, rarely examined, rarely challenged.

That’s part of what this newsletter is for.

What 'Mastering the Trading Game’ Is — And What It Isn’t

Mastering the Trading Game is not a tips sheet. No trade ideas, no market calls, no views on next week. If my book, Mastering the Mental Game of Trading, was the foundation, this newsletter is the environment we build upon it.

The mental game is one part of a much broader whole. This newsletter explores the game in its entirety — multilayered, multidimensional, and far more complex than most published commentary acknowledges. My aim is to help you understand it more clearly, navigate it more effectively, and examine honestly the tired narratives that get recycled as wisdom — asking whether they actually hold up.

I’ll approach that through three lenses: the environment you operate in and how it shapes your specific challenges (Outside-In); you as a person playing the game — psychologically, physiologically, behaviorally (Inside-Out); and the boundary where the two meet, where external events penetrate your internal state, and where most of the real damage is done.

Who I Am and Why It Matters

Over the last 40 years, I have lived inside this game. Twenty-five years as a risk-taker in market-making and proprietary trading roles, followed by more than fifteen years working as a performance coach — what I sometimes call being an “outsider on the inside.”

In that coaching role, I have worked across the full spectrum of the industry: from senior partners and firm owners at global hedge funds to those transitioning from analytical or quant functions into active risk-taking, to traders managing their own capital. That breadth matters, because the game looks very different depending on where you’re sitting — and the advice that helps one type of trader can be actively unhelpful to another.

I bring no ideological agenda to these pages. What I bring is 40 years of watching what actually happens — in markets, in trading rooms, and in the psychology of the people navigating both.

Through the Coach’s Lens

My approach to these topics will be objective and, where useful, deliberately challenging. Sometimes that means opening up a space for exploration. Other times it means pushing back on ideas that have gone unexamined for too long.

My primary goal is simple: to give you something that genuinely helps you do your job better. Not inspiration. Not motivation. Depth, context, and honest examination of what this game actually demands.

A Collaborative Conversation

This newsletter is intended to be a two-way exchange. As we progress, I want to hear from you — what you’re wrestling with, what you’ve experienced that doesn’t match the textbook, and which areas you’d like to see explored in future issues. Your perspective will help shape where this goes.

Next issue, we begin in earnest.

I look forward to playing this game with you.

— Steven Goldstein

Author of Mastering the Mental Game of Trading · Buy the book

Coaching enquiries: info@alpharcubed.com