Performance Coaching: When it Works and Doesn't Work

from Dr. Brett:
A large body of research literature on the topic of short-term behavior change suggests that a variety of methods are quite effective. Indeed, compared to control groups, people who utilize cognitive, behavioral, and solution-focused techniques improve on average by a full standard deviation in their target goals (more well-being, less distress, better functioning). As a psychologist, my general leaning is to teach these methods directly, so that each trader can be his or her own trading coach. Sometimes, however, it is difficult for people to maintain the objectivity to direct their own change efforts. In such cases, it can be useful to work with someone familiar with the psychological methods that are most effective.

It's currently fashionable to distinguish "coaching" from "counseling" or even "therapy". In part the distinction reflects differences in training: many "coaches" are not trained in such fields as clinical or counseling psychology, psychiatry, or clinical social work. Too, coaches see themselves as working with people who are dealing with normal life issues, not psychological disorders.

The reality is that two-thirds of all people who seek outpatient therapy benefit from short-term assistance and deal with such normal concerns as adjustment problems, work stress, and relationship conflicts. The principles of behavior change are the same regardless of who seeks help and what we call the helping process.

So what are these principles, and how can they help traders seeking a performance coach? Below I outline a few key ideas that might be helpful if you're looking to make changes in your patterns of thinking, feeling, or behavior:

1) It's all about the relationship - The outcome literature is emphatic on this point. The specific change techniques that are used are less important than the quality of the relationship that develops between the parties in a helping relationship. In fact, studies suggest that, if a positive relationship hasn't formed within the first couple of meetings, the odds of success are dramatically reduced. Why? People are less likely to confide in someone they don't feel close to, and they're less likely to take advice and direction from a person they either don't like or respect. Many times people make changes because they really like their counselor/coach and don't want to let that person down. As with any relationship, it's worth being choosy until you find the absolute right match.

2) Change begins when people learn to see their situations positively - This is very important. Few people seek a coach or therapist as their first option. Usually we try to solve problems on our own and by consulting friends or family. By the time a person gets around to seeking professional assistance, a great deal of time and effort have been spent without adequate results. This means that it's common for people to be discouraged and demoralized when they first seek help. The experienced, effective coach or counselor has "been there, done that". A situation, such as debilitating performance anxiety, that might seem overwhelming to a trader is a plain vanilla helping problem to someone schooled in behavioral techniques. By communicating to the trader that this is, indeed, a solvable problem and that there are very specific methods that have a superior track record in dealing with the problem, the coach introduces a new element into the equation: hope. Research tells us that the first thing to change when people seek assistance is a rise in well-being. When people find the right helper and realize that change really is possible, they feel better simply because of that.

3) Change accelerates when people see their problems differently - One key idea--and perhaps the most important one in this article--is that we are constrained by how we define ourselves and our problems. Many times we repeat patterns of behavior because of our limited definitions of what's wrong and what we can do about it. A trader might say to me, "I'm defeating myself at every turn. I break my rules and dig myself into a hole each day." A good coach, however, won't accept this definition of the problem and, instead, will observe carefully what is going on to propose an alternative view. For example, I might say to that trader, "You know, I don't think you're self-defeating. I just think you're telling yourself how *awful* it would be if you had a losing trade. Your self-talk is leading you to become anxious, and that's leading you to bail out of good trades and not take promising signals. If we can alter your self-talk, maybe your feelings and actions will follow along." By translating the problem into new terms, the effective helper opens the door to potential new solutions.

4) Talk is cheap - It's surprising: the most effective brief therapy methods are ones that actively engage people in *doing*, not just talking about problems. Change occurs when people shift out of the state they're in and process new information about themselves more deeply as a result. For that reason, I always prefer to work with traders *as they are trading* or couples as they are interacting. It's when problems are "hot" that people can make active attempts at altering how they think and what they do. Change can occur quite rapidly under such conditions. For that reason, I am extremely skeptical of counseling/coaching that occurs over the phone. It doesn't maximize the power of the helping relationship and it rarely hits problems with immediacy. The more actively involved a person is in the change process--both in behavior and in emotions--the more likely it is that the helping will be effective. Talking about problems in the abstract doesn't create the new experiences that are essential to rapid change.

5) Change requires repetition - It's common to think that people change suddenly, as if a light bulb goes off in their heads. The reality is far more mundane. People change by building new habits. They stop doing the old things and keep doing new things again and again until the new behaviors become automatic. As a result, much of the change process can become a bit boring. Often, people make initial changes but don't sustain those gains because they don't put in the time and effort to make their new behaviors automatic. In athletics as in psychology, a superior coach doesn't just show you what to do, but helps you sustain the motivation to do it. The greatest enemy to change is relapse; we're all most comfortable doing what's familiar. But what's familiar is often what brought us for help in the first place.

Coaching, counseling, therapy: call it what you will. Successful change, like being a religious person, takes more than a once-a-week commitment. The truly effective helping approaches map out specific things to do every day. In that way, they instill those new modes of viewing and doing until they become habits. On the field and in the consulting room, where you see good coaches, you'll see solid game plans, researched and tailored to the specific situation. You'll also find someone fanatically dedicated to your success, born of a bond between the two of you.

When those conditions are present, performance coaching works and it truly becomes possible to make important changes: in trading and in life.