Wednesday, February 21, 2018

Changing Your Trading (or any) Psychology

Trading problems often caused by bad habits that time to time hijack our thoughts. There is a great post from Brett Steenbarger on how to change those bad habits. The key points are:

1. Identify when our "automatic routines no longer serve a useful purpose, when yesterday's solutions, carried forward to a new reality, become today's problems."
2. Exit the comfort zone.  "That means standing outside our patterns and actively viewing them as problems."
3. "Change begins when we view our problems as our problems."
4. "Actively rehearse that pattern in your mind--visualize it, feel it--while you remind yourself of all the ways that it has hurt you." "Imagine how many times you've flushed money down the toilet, how many ways this problem has stood in the way of your success."
5. "Visualizing old ways of thinking, feeling, and acting that now bring us pain and allowing ourselves to fully feel all the disgust, guilt, remorse, and anger associated with the consequences of those patterns completely changes our trading psychology.  We no longer fall into comfortable habits, because we no longer feel comfortable with those habits.  We have turned them into enemies.  That is powerful."

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