Fear(less) log Nr 13 - Clive Ponsonby
Clive Ponsonby. Sink or Swim.
Greetings Fellow Traders,
The Fear(less) log is back and today, we're diving into the experiences of Clive Ponsonby. A peek at his LinkedIn Profile states that he is currently in the “time for a break” phase, after a remarkable “20 years at the top”. Clive has walked the vast trading floors of industry giants such as JP Morgan and UBS - a prime position to offer priceless insights on the role of fear in trading.
But, as always... first things first. If what you read resonates, or you believe someone could benefit from this, I'd appreciate it if you could hit the share button down below. Your support goes a long way. Thank you!
Let’s go!
Clive Ponsonby (FX trader and expert)
Clive Ponsonby is a name you might want to remember if you're into the Forex world. Currently, he's associated with Hedder, delivering insights through his monthly series "Currency View".
He has a solid foundation of over twenty years in FX trading. JPMorgan was one of the notable places where he honed his skills, handling a variety of trade types. Before that, he was instrumental in UBS, especially in their emerging markets FX trading sector in Europe. He also steered the Asian FX team for a whole decade.
Today, Clive isn't just looking back at his achievements; he's actively advising individuals and businesses on FX exposure. On top of that, he personally trades, always with a keen sense of understanding the broader economic factors influencing the currency market.
Let’s see what Clive had to say about fear in trading.
When did you first become aware of fear while trading? Was there a particular trade or situation that triggered it?
“When I first started trading (as a junior on a big FX market making desk) it was the monetary size of a) the trades - they were done in a minimum of 1 million Usd and b) the profit/loss was hundreds or thousands of dollars - these seemed like huge numbers to be trading or making/losing and very quickly you had to ignore the monetary value of them and almost treat them like a different thing otherwise it would take too much emotional toll.”
What specific fears did you experience while trading? How did they manifest? The most common fears include fear of losing money, fear of being wrong, fear of losing out on the dream, fear of not being respected, fear of keeping up with expectations, or just fear of losing.
“It was the fear of failure more than anything else. Almost every trader I know is fiercely competitive, it's part of what drives them, and your PnL is on show to everyone else, in real time to your peers as well as daily/monthly to a wider group of people.
There was no hiding and of course no one makes money every day so there are bad days and good days or months, you get the feeling of being judged all the time which adds another level of pressure. There was a huge drop-out ratio of people that started on the trading desk - less than 20% of those managed to last even 3-4 years; of those that made it that far only about half would be well respected or successful compared to their peer group.”
How did you initially deal with those fears? Did you try any specific techniques or methods?
“In a way it's sink or swim, you just knuckle down and do your best, try your hardest, learn the most you can to be as good as you can. If you are good enough to make it, you find out afterwards by doing it.
I very quickly thought of the numbers in trading like a high score in a video game, rather than money or the impact of that money on your life. The main point is that you will have losing trades, probably around half, and it's not bad decision making (necessarily) that led to that outcome so you can't take it personally; you stop out, and move on, the faster you can mentally reset, the faster you can try again and it is over the course of hundreds or thousands of trades that you are measured.”
Did you seek out mentoring or support to help you deal with your fears? If so, what kind of support did you receive?
“I constantly looked at how other traders (that I considered good) traded, I tried to put it into simple rules and emulate what I could.
I had several distinct trading styles I built up in my armoury, taking strategies from dozens of people I had worked under or with closely. I would also ask them about how they dealt with the pressure or fear and the most universal way of dealing with things was quickly moving on and forgetting the past and always looking forwards.
That doesn't mean not learning, but it means not grieving a loss and looking at each trade or opportunity with fresh eyes.”
Were there any resources (books, courses, etc.) that helped you better understand and cope with your fears while trading? If so, which ones?
“Not really, I learned from people.”
Have you ever paid attention to your body signals, such as heart rate, while trading? If so, how did you use this information to manage your fear?
“I would notice behavioural patterns in myself - often when you are in the thick of a difficult situation you can get stuck - just watching the market often with fear rather than a clear head, not leaving the desk for several hours was one sign and I would try and clear my head with some fresh air or just chat to someone to force myself to think about something else - a fresh perspective and a bit of a break would always be helpful.
I did look at my heart rate, but it was more around anticipation and busy market times (maybe around data) that things would spike, rather than trading PnL, but I'm sure extended periods of elevated HR would be a bad sign for me. Peak HRs in trading were not that dissimilar to a workout in the gym!”
Are you now fear-free while trading, or do you still experience fear from time to time? If you still experience fear, how do you manage it? Does it motivate you, or do you try to eliminate it altogether?
“I built up such a tolerance of PnL swings whilst working as a market maker that I am numb to most trading situations now so I can think very calmly and dispassionately about levels, positions, stop-losses. In a way it's almost zen like now for me, but trading my own money is several orders of magnitude less size than what I was doing in the day job, so maybe I haven't adjusted.”
What advice would you give to someone who is experiencing fear while trading? Is there anything you wish you had known when you first started dealing with fear in trading?
“Knowing that you can't put too much emphasis on one, two or even ten trades - it's a process of averages over hundreds of trades. Equally the most important skill is how to deal with a loss, rather than a profit, and dealing with a loss is very much about managing your fear and emotions, and it is much harder to think clearly in that situation.
Final Word
Clive has seen it all, from handling mammoth trades at large institutions to personally trading his own funds. What resonates profoundly with me is his perspective on trading: viewing it not as an emotional endeavor, but rather as a numbers game – or as he describes it, "a high score in video games." Emotional entanglement with every trade, be it a loss or a win, only complicates the process. True mastery lies in maintaining a broader perspective, aiming for consistent positivity over a span of 100 trades, or even 1,000 trades.
This holistic mindset is a hallmark of seasoned traders like Clive.
He can be found on Twitter @ClivePonsonby.
Have no fear!
Chris
crk@traderistic.com
References
Most read Fear(less) logs:
Improve your trading and download the Traderistic App for free. Available for iOS and Android.
Click on the links below to go directly to our download section.
Want us to add more trading platforms or devices?
Have your say here.
