In my understanding, trading is the art of seeking agreements, in the presence of common interests and divergent positions. That is, trading is the meeting of two or more parties with some common goal, which, in the absence of conflicts of interest, seek agreements in conflicting positions, considering what is bearable by the parties.
To be successful in trading, it is not enough to start a conversation and make arguments. It is necessary to pay attention to the various stages: preparation, planning, agreements, evaluation, and maintenance. trading involves preparing in advance; know the other and the context in which they are inserted; define objectives and positions; use an argument based on facts and data; act with objectivity and assertiveness; overcome objections and be prepared for concessions. Every trading has consequences and these can be positive or negative, so it must be assessed what impact we will reap as a result of our posture during the trading.
The ability to negotiate is not innate but developed. This means that we can improve our performance as negotiators with the use of methods and techniques and with the knowledge acquired over years of work, evaluating and reassessing positions and postures.
In this article, we will cover 3 fundamental techniques for successful trading: mastering the 3 pillars of trading, adopting appropriate postures, and identifying negotiator styles.
- Master the 3 pillars of trading
The science of trading is based on three pillars: knowledge, time, and power.
To build knowledge, it is necessary to seek to understand deeply the topic that you are talking about and, also, to research about the one you are talking to, understand your needs and motivations. This information must be accurate, as it will provide good arguments and help to support the whole trading.
Time is not only relative to the moment of the clock, but opportunities. It is essential to adapt our movements to the best possible timing, observing not only the reactions of the person we are dealing with but also the context.
For example, in the case of sales sectors, one must think: how is the supply and demand situation and what is the forecast for the coming months? Would it be interesting to take advantage of a specific date – such as Black Friday – to offer promotions and close the deal? It is necessary to recognize when time is for or against us. This makes all the difference in our positioning.
Last, but not least, the pillar is power. This power is shown in the influence, in the conviction, in the decisions, in the domain of the subject that is being treated. The exercise of this power makes both parties feel more secure to negotiate. To be able to practice it, you must have self-confidence, but always be careful not to act arrogant or rude.
Power is expressed by our ability to make our positions prevail or prevent the other from prevailing with his. It is to bring the result of the trading as close to our objectives.
It is not simple to master these three pillars. But understanding them and seeking to apply them is essential to achieving successful tradings.
- Reflect on what posture to adopt during the trading
Another important issue in the science of trading is looking at not only what we trade, but how we trade. How do we act during the process? What is our stance? What does it do to the other negotiator? This is relevant because he conspires against or in our favor as a result of his perception of the stance we have taken in the trading process. We are responsible for the feeling that we “sprout” on the other negotiator.
There are two basic stances to consider when trading:
2.1. Our conscience is the limit
It is when we enter into a trading and do not care about the possible future consequences of the assumed posture. This is the case of the win-lose stance in which what matters is the specific moment and the immediate result of the trading. Awareness is the limit and so-called “indecent proposals” or “forced to bar” pressure is made.
This stance can lead to agreements, but it can also damage the future relationship with the other party. It may be that the other is defensive and feels hurt, or even that he no longer wants to do business with the company. The fact is that disinterest in future business does not matter to me at the present moment.
2.2. We want to maintain healthy relationships for the future
In this case, we are concerned with what consequences we will be generating for the future since we are interested in maintaining a productive relationship with the other party.
In this case, the win-win stance prevails, which makes me consider the needs of the other. Assertive communication is essential because, in the absence of it, it may be that the closed agreements do not benefit the company as much as they could.
Before entering the trading, it is necessary to think carefully about what posture to adopt and what its consequences will be.
- Identify and work with negotiator styles in yourself and the other
The knowledge of the other negotiator, as we mentioned, is essential. However, this knowledge should not only be about the person’s experience, skills, and professional career, for example, but also about their trading style.
It is essential to set aside a short time, right at the beginning of the contact, to observe and listen. This identifies who the other is, what he is looking for, and what he is likely to do to get what he wants.
Only from that moment on will, it is possible to deal with him in the best way to achieve his goals.
It is also important to identify your style and that of other team members. We must emphasize that the goal here is not to change anyone’s style. Never waste time trying to convert the other to your style, because it will not work.
Self-knowledge will reveal the greatest difficulties of each one and will enable a gradual development and a clearer understanding of how to act in specific situations.
Professor, researcher and consultant Richard Shell discusses in his book “trading is Precise”, the differences between two styles of negotiators: cooperative and competitive. Next, we will explain how to identify them and how each can develop to become a more complete and effective negotiator.
3.1. Competitive Style
Among the attributes that characterize a competitive negotiator are unrealistic initial offers and a preference for letting the other make the first proposal. This is because he wants to make the most of himself, always seeking to have an advantage and offering few concessions.
To get what you want, you will avoid providing information, while trying to get the most out of the other. This closed behavior shows that there is no interest in a relationship, but only in benefiting from that situation. The other is seen as an opponent or opponent.
The competitive negotiator, under these aspects, understands trading as a game to be won, within the win-lose concept – the more I win, the more the other loses; the less I lose, the less the other wins.
These aspects can lead to the loss of more lasting agreements and relationship problems, hurting colleagues, customers, and suppliers, and losing their trust.
This style needs to pay more attention to other people and their real needs. It is necessary to demonstrate recognition on the other side, protecting the other’s self-esteem.
3.2. Cooperative Style
Cooperative negotiators, in turn, do not see the other as an opponent or opponent. They are more willing to reveal data and make realistic concessions and offers because they want the relationship to be preserved and to continue in the future.
Thus, the cooperative negotiator, under these aspects, understands trading as a process of sharing information, ideas, and options, in the search for mutual gains, within the win-win concept.
Well-crafted and debated options would, in theory, increase the chances of a good deal for everyone. However, it is dangerous for the cooperative negotiator to provide more information than necessary and to be passed over if he fails to defend his interests and ends up accepting concessions that are harmful to himself and the company. Or, if you need to abandon trading, you may feel extremely frustrated.
This style of professional needs to develop assertiveness, confidence, and prudence. You need to spend more time preparing and setting higher expectations. You need to insist more on commitments, not just agreements. Contrary to popular belief, cooperative people seem to have great potential for becoming very effective negotiators.
By identifying your style and the style of the team’s employees, as well as the styles of those with whom you negotiate, it is possible to achieve more profitable relationships and agreements for everyone.
Conclusion: reciprocity is essential
These techniques are fundamental for closing successful agreements and can be applied in any type of trading, from salary adjustments to acquisitions of large multinational companies.
Self-knowledge and knowledge of the other are key. It is necessary to seek to identify your style and work with attention, in addition to identifying that of the other negotiator and learning to deal with it. It is necessary to first understand what are the attitudes, motivations, desires, and tendencies that we have and that the other has, to then define goals based on that and act accordingly – always with respect, objectivity, empathy, and assertiveness.