Why people with high IQs are often horrible traders

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Why people with high IQs are often horrible traders

 

Listen to this crazy paradox:

According to Drs. Travis Bradberry and Jean Greaves, authors of Emotional Intelligence 2.0, “people with the highest levels of IQ outperform those with average IQs just 20% of the time, while people with average IQs outperform those with high IQs 70% of the time.”

How can that be so?

Aren’t those with high IQs the most successful people?

In a word: No.

In 1995, Daniel Goleman wrote the international best seller, Emotional Intelligence.

Even a stubborn galoot like myself can see it's crystal clear that EQ – emotional quotient – is a better predictor of success than IQ.

My cousin has an IQ of 180, and can't keep a job, so I'm not surprised.

My IQ is up there (not as high as my cousin), but I squandered years of my life doing crap jobs…not to mention 20 years ago I traded about as well as William Hung can sing.

Talentsmart, a leader in employee testing, found that 90% of top performers have high EQs.

They found that 58% of your job performance is from EQ, and those with high EQs averaged $29,000 per year more than their counterparts with low EQ.

So what the heck is EQ, or emotional intelligence?

It’s the ability to recognize, understand, and manage your emotions and identify the emotions in those around you – especially under pressure.

Lack of emotional intelligence is what caused a 9-year-old to go on a rampage, pouring paint over desks, and vandalizing a car in the parking lot because he was called a “baby” and wanted to convince his classmates that he wasn’t.

Like a disease, lack of EQ is why schools are offering crybaby college students “safe spaces” insulating them from the real world of opinions other than their own.

Lack of EQ is what causes irrational trading mistakes like failing to sell a stock after it hits its stop loss.

Or selling too soon because the market is moving against you, and your feeling of pain and anxiety over-whelms your rational brain as if you had your hand over a lit candle.

Now we all know IQ doesn’t change over time.

So if your IQ is 105 in the 4th grade, it will be 105 at 50.

The act of trading doesn’t take much in the way of IQ if you have a proven trading strategy.

You need to know some basic math, how to navigate the web, and how to use your grubby fingers to punch in a few keystrokes.

So why do so many screw that up a perfectly good trading strategy?

Low EQ.

Here’s the good news: Your EQ can be changed if you make a conscious decision to do so.

Here’s a start:

18 behaviors of emotionally intelligent people >>

Also, feel free to go on Amazon and check out the books I mentioned in this article.

Don't let a perfectly treatable problem keep you from making millions in the market, and having an abundant, fulfilled, and happy life.

 

Trade smart,

Dan “Prince of Proof” Murphy

Read part 2 here: https://milliondollartarget.com/2016/12/08/why-people-with-high-iqs-are-often-horrible-traders-part-2/