| Doug Hirschhorn |
Doug Hirschhorn certainly thought so. The former Colgate University catcher even tried his hand at it, spending several years after graduation as a commodities trader on the floors of the Chicago Mercantile Exchange and Chicago Board of Trade. And his former bosses at Singer/Wagner, now called SMW Trading, seem to think so, too: The firm recruits athletes almost exclusively.
But there is one thing that can cause an athlete to strike out on the floor: old injuries. Hirschhorn’s days as a trader came to a halt when his herniated disk started barking again. “I couldn’t physically stand anymore,” he says. After a few months unhappily trading electronically, Hirschhorn left, “feeling like a total failure.”
Today, Miami-bred Hirschhorn, who in high school summer leagues played alongside Major Leaguers Doug Mientkiewicz and Alex Gonzalez, and against Alex Rodriguez, is chief operating officer and chief performance officer – an executive trading coach, if you will – at New York-based trading firm Sperling Enterprises. He also writes a column for Trader Monthly magazine, “The Head Coach,” as well as a blog by the same name.
But the parallels between baseball and trading weren’t always obvious to Hirschhorn. The epiphany struck – as they often do – in the middle of the night. At the time he was well on his way to a career change in sports psychology via a M.S. program at the University of Connecticut. Musing on “Casey at the Bat,” the famous poem about a mighty slugger striking out – “no joy in Mudville” – Hirschhorn banged out a piece about striking out, trading and confidence. Soon he was penning pieces like “Nine Innings to Successful Trading,” linking the two, and eventually churning out The Trading Athlete, which was published in 2001. (The book’s dust jacket proclaims that the “the psychology of elite athletes has translated effectively to that of the online trader.”)
Soon enough, Hirschhorn was becoming a commodity in his own right and the traders were calling him back to New York. Schonfeld Securities, which Hirschhorn had earlier approached about joining in a performance capacity, hired him as director of motivation and performance.
“He helps organize [traders], and helps motivate them to do more of what they do right,” says Mark Peters, a v.p. at Schonfeld who was instrumental in bringing Hirschhorn on board. Schonfeld had a long-term interest in hiring a trading coach, he says, and it was Hirschhorn’s sports psychology background that made him “a little unique,” and, possibly, a little bit more relevant. Peters wanted someone “to get these guys more focused and organized to go into battle everyday.”
During his two and a half years at Schonfeld, he ran workshops and worked individually with traders. He also got back to work on his Ph.D – which he had begun a few years earlier at West Virginia University – pursuing it part-time at Capella University. And Hirschhorn made another discovery: Athletic background has nothing to do with being a successful trader.
He discovered the real trait that mattered was openness. “Less open traders... were more focused and had the ability to trust their own game plan,” he says. In other words, you could argue that competitive drive – something common to successful athletes and successful traders – is a factor, but not the athletic background itself. Today, Hirschhorn uses his theory to help private clients screen for competitive traits, confidence and resilience. He also looks for an understanding of risk and reward – those in it just for the action are out. “As a trader, your job is to place bets only when the odds are in your favor,” he says.
It’s here where Hirshhorn sees a more compelling argument for the connection between trading and sports: the case of John Henry, hedge fund manager extraordinaire, who used the same quantitative analysis that made him rich enough to make his Boston Red Sox World Series champions.
“Old-style [baseball] scouts I would equate to the old-style trader: guts and glory, ‘he looks like a ballplayer.’” Hirschhorn says a similar mentality afflicts trading firms. But what about the traders you’ve already got? Can they be saved from themselves?
“You need to know what your weaknesses are,” Hirschhorn says. “If you’re good at taking layups from the right-hand side, your job is to take layups from the right-hand side...You need the patience to trade only those high probability situations.”
Of course, in the macho world of trading, just as in baseball, getting people to ask for help isn’t easy; it’s helpful here to remember the mockery and derision that poured down upon Alex Rodriguez, arguably the best to ever play in the game, when he acknowledged seeing a therapist.
“The ones that could use my help the most” – those with negativity or confidence issues, those most prone to “destructive trading” – were not signing up,” Hirschhorn, while the more confident and self-assured, the ones doing better, were eager to utilize his services. He also notes that there’s a gender gap: “It’s still harder to get a male client than a female client.”
But with the most successful traders getting even better under his tutelage, Hirschhorn says that the “stigma” is starting to dissipate. “They’re not ashamed” of seeking help,” he says, and “things like that open the door.”
“I help you go from good to great and from great to excellent,” Hirschhorn boasts.
The traders have started to respond. They are, after all, in it to make money.