BarroMetrics Views: The SCARF MODEL

On Thursday this week. I began a course for coaches run by  Results Coaching Systems. The content is the subject matter of David Rock who has authored several books e.g. Your Brain At Work. Dave is a pioneer in making public the results of neurological research; based on that research, one of his learning models is SCARF

  1. Status (and Safety)
  2. Certainty
  3. Autonomy
  4. Relatedness
  5. Fairness

Dave suggests that an environment must have all of the above  for success. But wait a minute you say, except for (4), none of the items are available to the trader:

  • There is no safety in the markets; by definition to succeed we need to take risks.
  • Certainty in the markers; indeed on a trade by trade basis, we have uncertainty.
  • We have no control over market movement i.e. no autonomy
  • Finally  no ‘fairness’ can be found in trading results….. the trades involving the least effort are often the most profitable…. traders with little or no skill often make more money than those who do ‘all the right’ things etc, etc

So why then do 5% succeed despite not having the appropriate conditions?

I would suggest that the 5% have reframed the environment so that they see the SCARF model elements being present in their trading. For example

  1. We find safety in the fact that over a large sample size, their risk management plan and trading rules provide a positive expectancy.
  2. We find certainty in the fact that over  a large sample size, their process is profitable
  3. We have full autonomy over their own actions. Their success and failure depend on them and only them.
  4. We find fairness that the market rewards us for the continual learning process we engage in so that we can continue to provide ourselves with a positive expectancy.

I have found that for many areas, reframing is a useful tool.

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