BRETT STEENBARGER'S TRADING PSYCHOLOGY RESOURCE CENTER

Below are resources to help traders become their own trading coaches, improve their trading processes, and develop a positive work-life balance.  All the TraderFeed posts also contain links to valuable resources and perspectives.  

RADICAL RENEWAL - Free blog book on trading, psychology, spirituality, and leading a fulfilling life

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The Three Minute Trading Coach Videos

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Forbes Articles:

https://www.forbes.com/sites/brettsteenbarger/
  

My coaching work applies evidence-based psychological techniques (see my background and my book on the topic) to the improvement of productivity, quality of life, teamwork, leadership, hiring best practices, and creativity/idea generation.  An important part of the "solution-focused" approach that I write about is that we can often best grow by focusing on what we do well and how we do it--and then doing more of what works for us.  The key is to know our cognitive, interpersonal, and personality strengths and leverage those in the pursuit of performance. 

FURTHER RESOURCES

*  A Creative Way to Use TraderFeed 

*  Brett Steenbarger Bio

*  Brett's Books on Trading Psychology

I wish you the best of luck in your development as a trader and in your personal evolution.  In the end, those are one and the same:  paths to becoming who we already are when we are at our best.

Brett
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What Is The Best Way To Learn Trading?

 

8/26/2026 - The last post focused on the intensity of market study and performance review as a key element of trading success.  Reading through the interviews of the Market Wizards, it's clear that their training and their preparation are conducted over long hours of deep concentration.  There is nothing casual about their market routines.  Each practice, each review, each preparation for the new market day is a workout.  For that reason, the most successful traders are the most focused and take away more from their time in and out of markets than average traders.

In his book Mindset Secrets for Winning, Market Wizard Mark Minervini advises, "To accelerate your improvement and take your performance to the highest level, you need to practice in a way that builds both your physical and mental capacity, and in a way that strengthens your self-image" (p. 159).  In other words, the best way to learn trading is to treat the learning as *training* and use learning processes to build a winning psychology.  How we learn trading and how we prepare for each trading day has to be a psychological workout if it is going to build our endurance, our competitive determination, and our resilience.

There is one word that should always give you pause if you're looking for help with your development as a trader.  That is the word "easy".  If someone is promising you an easy path to success, they are confessing that their work will not build your ideal mindset.  No one ever cultivated and sustained the drive to win by opting for "easy".  "Easy" is for those who wish to avoid effort.  Learning trading cannot be comfortable if it is going to be successful.

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8/25/2026 - As part of writing my next book, I am reviewing all the Market Wizards books, as well as other texts from accomplished traders.  The goal is to get to the heart of trading greatness.  Here are four elements of trading success that I have noticed repeatedly:

1)  Intensity of market study - Viewing, playing, and replaying market action every day and carefully noticing patterns that characterize the best trading opportunities in different market conditions and different volume/volatility regimes.  This latter point is crucial:  opportunity varies as a function of *who* is in the market;

2)  Intensity of execution study - Once you clearly observe the promising trading patterns in different market environments, drill down to very short-term time frames to observe how those opportunities set up.  The goal is to identify the ideal points of execution for each of the market patterns you observe.  Ideal execution enables you to trade each opportunity with superior reward relative to risk.  There will be different execution patterns for each market pattern you observe across market conditions.

3)  Intensity of trading review - Once you've started trading the market and execution patterns that you've intensively studied, you then want to replay and review each trade to see what you did well and what you could have done better.  Each trade has to become a learning lesson, reinforcing your strengths and correcting your weaknesses. 

4)  Intensity of teamwork/mentoring - Share the results of the work above with one or more developing and experienced traders engaged in the same processes.  Drill down on what they have been doing so that you ensure that you learn something new and promising from each sharing and that they are learning similarly from you.  This sharing and learning will reinforce what you're learning, expand your mastery, and keep you focused and motivated.

The intensity of your learning process and your growing sense of mastery will be the best supports for your trading psychology.  Great traders, like great athletes, are always in training--and they use their training to stay focused and motivated and to keep growing and learning new things.

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8/24/2026 - Suppose the experience and wisdom of a mentor could be captured by an artificial intelligence platform and used to aid in training developing traders.  Indeed, suppose that multiple mentors could be available through AI so that different perspectives could be accessed by the developing trader at any time.  This possibility was unthinkable years ago, but it is rapidly becoming a reality.

I'm not convinced that AI mentoring could entirely substitute for the value of direct human interaction, just as AI-delivered psychotherapy is not as effective as therapy delivered by a live, experienced psychologist.  One important reason for this is the value of human relationships and our ability to internalize emotional experiences through our connections with others.  Just as an AI parent could not properly socialize an infant, the AI mentoring platform--even accompanied by realistic avatars--is unlikely to replicate the experience of a caring, involved mentor.  When a learner is inspired by a mentor and greatly desires to live up to the mentor's example, great things can happen, whether it's in the military, in learning the arts, or in developing trading prowess.

But just as a trading journal can help us review performance, identify strengths and weaknesses, and set goals, the AI mentor can help guide our day to day development.  It's useful to think of AI as a greatly enhanced journaling, learning, and feedback tool rather than as a mentoring replacement.

So back to the topic of the recent posts:  How can we best learn trading?  We learn when we are deeply engaged in identifying market patterns, structuring our trades to exploit those patterns, managing and sizing those trades effectively, and using market reviews to set goals and adapt to market changes.  Teaming up with other dedicated traders can greatly enhance and accelerate our development and, soon, artificial intelligence will become an indispensable component of the learning/mentoring process.

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8/23/2026 - The previous post emphasized that, in professional settings, people who are interested in learning to trade are first hired as junior analysts.  They use their analytical skills to identify assets that are mispriced, and--with experience--they recommend trades based upon their analyses.  Once the analysts have experience and success behind them, their recommendations are tracked for P/L.  Indeed, at many firms, there is P/L attribution for every trade that is in the book.  If the analyst's ideas are proving to be profitable, the analyst will be given a "sleeve" of capital to actually trade those ideas.  This is done with the supervision and mentorship of the senior portfolio manager, so that there is ongoing learning/training.  If the P/L of this beginning account is favorable and if risk is managed well, the account will grow and the analyst will become a co-portfolio manager.

So we can see that the way a new team member learns trading is to first learn "idea generation", get feedback/mentoring on their research and the quality of the ideas they generate, and then learn trading their ideas--again with teaching and mentoring.  As a result of this very structured process of talent development, the success rate of new team members is astronomically higher than the success rate of traders who attempt to learn trading on their own.  

What can an individual interested in learning to trade do to increase their odds of success?  The key is to find trading communities with likeminded members who are willing to team up, share ideas, review performance, and hold each other accountable.  Yes, there are many communities where members watch videos and take courses.  What is important, however, is to actively engage in teams where that learning--and the application of the learning--can be shared.

Look at how physicians are trained.  Look at how soldiers are trained.  Look at how performing artists are trained.  Always there is performance, there is mentoring and deep review of performance, and there is application of the learning.  You don't perform surgeries, go into combat, or perform on the Broadway stage until you've had significant training.  It's great when trading is your dream.  If you're trying to do it all on your own with a few videos and online courses, it's no longer a dream.  It's a fantasy.  

The next post will address the role of AI in accelerating the learning of trading.

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8/21/2026 - Yesterday's post focused on some of the shortcomings that we see in the education and training of traders.  Much of that training is conducted online, because that is what creates scale--and income--for the instructors.  But is that ideal for generating trading success?  Let's take a look at professional trading firms and see how they train their talent.

The first big difference at hedge funds and similar trading organizations is that new talent is hired.  Typically they are hired by a team and typically they report to a more experienced, senior team member who supervises their efforts.  At a hedge fund, they are hired as junior analysts, tasked with the responsibility for gathering the information needed for the team to make informed trading decisions.  Thus, for example, at a fund trading individual stocks, the junior analysts will follow a group of companies within an industry and stay on top of earning reports, news developments, and communications with the managements of their companies to identify when the stocks of those companies are compelling buys, holds, or sells.

Here is what's key:  The junior analyst is hired because they have some skill set/talent that is valued by the team.  For instance, they might have programming skills, statistical analysis experience, or relevant experience from an internship during their education.  They apply their skills and experience to their work, but they are always supervised by a senior analyst.  That senior analyst reads and reviews all of their work and provides feedback about good ideas, not so good ideas, and further research that needs to be done.  Thus there is constant feedback about idea generation and the improvement of the quality of ideas.  Such supervision and mentoring lies at the heart of learning and professional development.

Teams are mentoring factories.  This lies at the heart of their success in producing trading talent.

The treatment teams in medical schools consist of a senior (attending) physician, senior resident physicians training in their specialties, junior residents supervised by the seniors, and medical students supervised by the junior residents.  "Each one teach one" is the motto.  We learn by teaching and we learn by being taught...at higher and higher levels of responsibility.  Elite training is never accomplished in isolation.

The intensive training within trading teams typically includes both fundamental analysis (factors impacting the demand for the company's goods and services) and technical analysis (factors reflecting demand and supply for the company's stock).  The idea is to be more rapid than the competition in identifying when a fundamentally solid investment is now in demand, as well as when an investment that has been in demand is now no longer compelling in its fundamentals.  These ideas are conveyed to the portfolio managers, who are responsible for taking the research and ideas from the analysts and turning those into actual trades in the team's portfolio.

Thus, both the junior and senior analysts have the opportunity to see how their work translates into actual trades and P/L.

So, what we see is that the first principle in learning how to trade is understanding what goes into good trades and then practicing idea generation with intensive supervision, feedback, and mentoring.  When the junior analysts become sufficiently experienced and successful, they are promoted to the role of senior analysts.  They share their ideas more directly with the portfolio managers, and they take on juniors for supervision.  Learners progress by becoming mentors.  In the next post, we'll see how these learners/mentors get to the point of actually trading their ideas--and we'll look at how individual traders can gain the benefits of team-based training.

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8/20/2026 - Over the years, there has been no lack of books, websites, videos, and courses promising to bring trading success to developing traders.  Indeed, we're flooded with offerings from aspiring gurus, promoting videos that outline market patterns, illustrated with handpicked examples.  Soon we'll see more of these patterns offered by AI tools, alerting traders to trends, breakouts, etc.

So why aren't these offerings more successful?  If a successful trader is teaching methodologies to developing traders, why don't those traders come close to replicating that trader's claimed success?  A common answer is that the aspiring traders need to develop their psychology as well as their trading methods.  They are not succeeding because of their lack of discipline.

But what if we were to take the patterns taught by the gurus and automate them so that there is perfect discipline?  Or what if we were to program the patterns and actually assess profits, losses, drawdowns, etc.?  I've performed this exercise a few times and the results are discouraging.  The patterns that are taught work in certain market environments and not in others, ultimately resulting in unacceptable drawdowns.

This makes sense.  If drawing lines on charts and finding simple "setups" consistently made meaningful money, those would be rapidly exploited with those who have the funds and programming expertise to take advantage of the opportunities.  When I first began working at professional trading firms, particularly large hedge funds, I was struck by the fact that none of the best traders used methods similar to those taught online.

None.

The professional traders understood *why* markets move and thus don't rely on charts and indicators that reflect movement but don't *explain* it.  In this series of posts, I will make an effort to explain how professional traders learn trading and how we can learn from their example.

How Well Do You Coach Your Own Trading Performance?

 

8/19/2026 - An important test of how well we coach ourselves is how we respond to losing periods in markets.  The book Best Loser Wins is very important in this regard.  The subtitle of that text reads:  "Why Normal Thinking Never Wins the Trading Game".  Normal thinking avoids pain and avoids loss.  It's normal to hang onto trades that go against us, not wanting to lock in a loss.  When we examine the trading of the best traders, however, we find that they are very good at losing.  When they see that their ideas aren't working, they're quick to exit and limit their losses.  When those ideas do work, they're quick to take profits on a portion of their position but also willing to let the rest of the trade run--and perhaps even add to the position.  The result is that the average size of their winning trades far exceeds the average size of the losers.  Ironically, the best losers end up becoming the greatest winners.

Where self-coaching comes in is that the best traders not only endure losses, but actively *learn* from them.  If a well-researched idea isn't playing out in price action, something else is going on.  That something else is a market driver and will trap unaware participants.  For instance, perhaps the stock market is not reacting as usual to growth news because commodities, especially oil, and yields are on the rise, suggesting an inflationary environment.  The losing trade quickly stimulates a fresh look at markets and often a new, promising trade.  The loss was a price paid for learning and can result in a much larger profit.

In short, the mindset of the successful trader is not so much positive or negative as it is resilient.  When we coach ourselves to find opportunity following losses, we exercise that resilience.

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8/18/2026 - In the last post, we looked at how relative volume provides important information for understanding market movement and planning our trades.  Because volume is so highly correlated with volatility (+.66 during 2026), tracking volume in real time can help us anticipate likely movement and thoughtfully establish targets for our trades.

Yet another facet of the market microsystem that helps us coach our own trading is how market components are moving concurrently with the overall market.  If we're trading stock index futures, for example, and we see the market break out of a range higher, we want to quickly look at the NYSE TICK and see how many stocks are ticking higher (i.e., lifting offers) on the move.  That tells us a great deal about the breadth of buying interest.  We also want to glance how various market sectors are behaving on the breakout.  Is this a broad move higher, likely reflecting a trend, or is this rotational action impacting some sectors and not others?  

Finally, we want to see how other markets are trading at the time our market is breaking from its range.  Is the move occurring in asset classes other than stocks, such as interest rates and currencies, or is this an idiosyncratic move specific to equities?  If it's a broad move across asset classes, this can be a great signal that large institutions are deploying capital across macro themes--a development which should help price movement persist.

Who is in the market helps determine how the market moves.  A good coach, like a good football quarterback, sees the entire field and calls plays based on what they see.  A great deal of trading failure occurs when we get run over by the big picture that we never see.

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8/17/2026 - The previous post suggested that every market exists within an ecosystem and that successful trading of a market requires an understanding of that ecosystem.  We can think of price action and volume as the market's "text".  The ecosystem is what surrounds and determines price and volume behavior:  the "context".  Understanding--and genuine conviction--occurs when we can place the market's text in proper context.

Let's say that we are trading the SPX Index via SPY or stock index futures.  The first piece of context is how the market is trading compared with how it has typically traded *at that time of day*.  So, for instance, is volume at today's opening bars significantly higher, lower, or similar to typical volume during those bars over the past month or so?  *Who* is in the market determines how much the market can move and how it is likely to move.  Who is in the market also tells you who you are trading against, and that tells you how the market is likely to move.

A simple exercise is to identify the best couple of trading opportunities each day over an extended period of time and then check out those opportunities as a function of the market volume traded on each occasion.  You'll see that the ideal "setups" occur differently when you're trading in markets dominated by institutions and those dominated by smaller participants.  Developing traders who don't understand context won't realize why the patterns that had been working for them now aren't working.  They'll become frustrated, and that will hurt their trading.  But the problem is not predominantly psychological.  It's a failure to understand market context.

More to come.

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8/16/2026 - So what does trading have in common with photography and how is that relevant to coaching our own trading performance?  The above photo of a bee eating and pollinating a flower was sent to me by Dr. Corinne Masur, a psychology colleague and an accomplished photographer.  It's a beautiful picture of a beautiful act:  the bee feeds from the nectar, while pollen sticks to its body.  When the bee moves to another plant for eating, the pollen falls off onto the new flower, enabling the new plant to grow and flourish.  The bees and flowers thus live in a mutually beneficial ecosystem.  Understanding the bee requires an appreciation of that ecosystem.

When Dr. Masur described what it takes to capture such a beautiful photo, she said that it requires the ability to stand in one spot for a long period of time.  That immediately made sense to me.  The perfect shot doesn't just suddenly appear.  The photographer sees a promising opportunity and waits for the right shot, framing it to capture the subject and its surroundings.

Great traders have a detailed understanding of an ideal market situation to exploit, from the big picture to the moment-to-moment activity.  They then have "the ability to stand in one spot for a long period of time", patiently waiting for phenomenal reward relative to risk.  Those are the opportunities to size up, and they don't come along all the time.  Trading without the ability to stand in one spot--and the knowledge of what to look for across time frames--*is* overtrading.

What many traders don't understand is that each market exists within an ecosystem.  It's understanding that ecosystem that that helps us trade the opportunity properly.  Simply looking at price bars and chart data misses the ecosystem.  It would be like looking at the bee and missing the flower.  The next post will explain how to coach ourselves to identify market ecosystems.

This post is written in honor of Victor Niederhoffer, who understood nature and ecosystems and their relationship to markets.

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8/14/2026 - It's often assumed that the role of trading psychology is to help us follow our plans and execute our setups.  That is not how experienced traders and portfolio managers coach themselves.

Consider a basketball team preparing for an important game against a talented rival.  A significant amount of time is spent watching game films, stopping the films at key points, and learning lessons from those occasions.  It is those lessons that are then practiced on the court, building awareness and skills that can take advantage of the rival's weaknesses.

For instance, the films might show that the opposing team is slow to rotate their zone defense when the ball is passed cross court.  This sets up open jump shots from the perimeter.  In practice, then, the team will rehearse rapid cross court passing to take advantage of the opponent's slow adaptation.  

How does this relate to markets?  The market is the opponent, and the "films" we review are how the market has recently traded.  We track volume/volatility; we track which markets have been correlated with our market; and we track which sectors of the market have been strongest and weakest.  We then identify opportunities that have appeared in these recent markets and how we can best take advantage of them.  Our practice is rehearsing how we'll trade patterns that are likely to recur in today's trade.

But what if today's market trades differently from recent markets due to news and/or impacts of other markets?  That's when we call a timeout and quickly adapt by *not* following our previous plans and by seeing--in real time--how opportunities are setting up.  We may even be able to identify markets from the past that have traded similarly and reviewed how we successfully traded them.

In other words, self-coaching sometimes means intentionally not following our plans in order to adapt to new/different market conditions.  Self-coaching is preparation and training, and sometimes that means making real time changes in what we do and how we do it.

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8/13/2026 - We are always coaching ourselves.  Some of us do it in a conscious, planned fashion and others do it randomly.  Our self-talk *is* our self-coaching.  We are always talking to ourselves about what we're doing, what we have done, and what we should do.  That internal voice is the coach within us.

That is why it's a great test to ask ourselves:  Would I want someone else to talk to me the way I speak to myself?  Would I speak to a good friend or colleague the way I speak to myself?  If the answers to these questions are no, then it's likely that our self-talk (our self-coaching) is sabotaging us.

The reality is that informed, constructive self-talk, like informed, constructive trading, is something that has to be learned, practiced, and cultivated.  We need to work on our self-coaching every bit as much as we work on our trading, because we're looking for mastery in both domains.  

Yes, we can hire trading coaches and we can sit on trading floors and listen to team leaders and managers guide us.  But if we simply rely on others as our coaches, we won't necessarily learn the skills and develop the tools for effectively coaching ourselves.  It starts with the quality of our self-talk and whether we're challenging and inspiring ourselves or draining ourselves of vital motivation.

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8/12/2026 - Why aren't we more successful in coaching ourselves to success?  As noted below, structure is vital.  If our coaching is irregular or if it's a mere add-on to our day's activity--something to get over and done--then it can't truly be internalized to change who we are and what we do.  A great question is whether we review our trading/performance with the same intensity that we follow and trade markets.  When we read about the Market Wizards, it becomes clear that they study markets and performance for long, intensive hours.  That helps them internalize what they learn.

But another reason self-coaching is not successful is that it leaves out a key dimension of learning:  emotion.  If we look at successful coaches in sports and performance fields, they don't simply go over performance in rote, routine ways with performers.  They motivate.  They push for more and more, better and better.  Think of locker room talks by basketball and football coaches.  Think of the coaching of Olympic stars.  The role of the coach is to inspire greater and greater performance.

How well do you inspire yourself in your self-coaching?  How well do you motivate yourself?  If your reviewing and planning are emotionless, routine processes, can they really push you to greater and greater achievement?

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8/11/2026 - Every trader is their own coach:  how we talk to ourselves and how we spend time previewing and reviewing markets *is* our self-coaching.  A worthwhile question to ask is:  If we coached a new trader in the way we coach ourselves, how well would they develop?  Alternatively, if we coached someone in the gym the way we coach our own trading, how well would they develop?  Many traders are far too informal in their self-coaching, so that they never truly challenge themselves and grow.

The first dimension of successful self-coaching is structure.  We don't hesitate to structure our trade ideas, spelling out entries, exits, sizing criteria, etc.  But how well do we structure our own coaching?  What kind of notes do we take before trading starts, during trading, and after?  How do we draw upon these notes to identify what we saw well and what we missed?  How do we review the trades that we took to see how well we could improve what we did?  How do we turn that review into action plans for the next day?

Look at workouts and practice sessions among sports teams or after action reviews by military squads.  There is nothing informal about it.  There is structure and there is purpose.  Everything is geared to improve performance going forward.  The coaching is motivational:  sometimes encouraging, sometimes a kick in the behind.  But there is always structure, going over performance in detail to highlight what we do well and what we could do better.    

What Separates The Best Traders From The Rest

 

8/9/2026 - I'm seeing a widening gap between traders and money managers who make active and innovative use of AI and those that do not.  The first generation of AI applications was all about number crunching and assembling written information on a given topic from a number of places.  This turned AI into a virtual trading analyst, a kind of super search engine that not only collated data but made sense of it.  Thus, a simple query can quickly pull together economic data from around the world (growth, employment) and identify which countries and regions of the world are expanding and which are not.  Similarly, the AI engine can pull together data from individual companies--earnings, revenues, expenses--and quickly identify patterns of growth and stagnation.

The newer applications of AI are studying traders themselves and identifying patterns in profitability and drawdowns.  For instance, once the AI is fed the P/L data for a trader, it can identify profitability as a function of market movement, market volatility, time of day, position sizing, etc.  Once patterns of profitability are identified, they can be tracked in real time, alerting a trader to market conditions that have been more and less profitable in the past.

If you know that you're in an environment that has been profitable in the past, you can size up positions.  If you know that you're in an unfavorable environment, you take pull back risk taking.  Suddenly AI has gone from being an analyst to being a real time coach.  That is a game changer.

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8/8/2026 - What is your relationship to time?  Some people spend a good amount of their time moving from activity to activity without any overarching plan or purpose.  Others keep a calendar to structure their priorities and get important things accomplished.  Still others utilize time to prioritize activities that actively challenge them and grow various strengths.  These three ways of relating to time occur in our personal lives, our relationships, our work lives, and in our involvements with markets.  

When we develop ourselves, we expand our capacity for intentional action and that moves us from random ways of spending time to planned activities that expand our capacities.  The best traders I have worked with are masters of time.  They not only get things done, but also prioritize activities that push them to grow.  

When we are at the gym and comfortable lifting a given weight on the machine, it's time to move the weight higher.

The best traders are always on machines and always moving past their levels of comfort.

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8/7/2026 - Back in December, 2010, I wrote the following for the SpecList discussion group led by Victor Niederhoffer.  The key idea is that, for someone who has done their homework, frustration and the taking of losses is valuable information.  It is when markets are changing that the old, winning trades no longer work--and that is when we can adapt ahead of the crowd and create new winning trades.  I heartily recommend all of Vic's writings to developing traders:

Maslow one commented that, when all you have is a hammer, you tend to treat everything as a nail.  So it is with psychologists that involve themselves in markets.  Lacking an understanding of actual speculative strategies and tactics--not to mention portfolio construction--they reduce performance problems to the lowest, psychological denominator.  In so doing, they confuse cause and effect:  they observe frustrated traders and assume that relieving frustration is the key to making money.

The professional speculator, unlike the retail daytrader, rarely falls into performance problems because of derelict discipline or runaway emotions.  Rather, it is the very competence of the professional that leads to performance challenges.  It is when pros are most in sync with markets, identifying and profiting from themes and patterns, that they are most vulnerable to ever-changing patterns of direction, volatility, and correlation.  The confidence that permits healthy risk-taking under the best of speculative conditions inevitably gives way to confusion and frustration when skilled participants are no longer in sync with their markets.

The wise speculator utilizes this confusion and frustration as information:  they often are early signs that something meaningful has shifted in the marketplace.  The proper intervention in such circumstances is not to quell the frustration with psychological exercises.  Rather, it is to extract the information from the situation and feed that forward into strategy and tactics.  Very often, today's bad trade was a good trade in yesterday's regime:  there is information in that.

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8/6/2026 - An interesting question that came up during last evening's webinar was what to do if your trading system, which has backtested well, now shows a string of five or six losses.  Should you stop trading?  Should you continue to trust your edge?  And how can you control the emotions associated with such a drawdown?

My response is that successful traders don't have "an edge" in their trading.  They have many ways of making money in different market environments.  A simple example would be to track relative volume (whether volume at a given time of day is average, high, or low) and study, study, study how markets move in different volume regimes.  What you'll see is that there are different edges in markets with different volumes, because you're trading against different market participants.  How the market moves depends, in part, on who is in the market.

So now we can go back to the question and see the premise that needs to be checked, as Ms. Rand would say.  When we have a string of losses on trades that have been consistently profitable, it's a likely sign that the market has changed.  When we look at volume closely, we might detect that change.  When we look at what is moving with the market, we might see a change (for example, interest rates are moving higher along with commodities and the US dollar is weakening, all suggesting higher odds of inflation).  The string of losses are telling us to step back, reassess, and find a fresh edge in that new environment.

The losses are information.  They are like physical pain, a warning sign that something is amiss.  If we have an edge--and only one edge--we will be vulnerable to changing market conditions and that will take a toll on our emotions--and our bottom lines.

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8/5/2026  - Here are some challenging questions to ask yourself about your trading.  I'll be touching on these in the webinar this evening (see below):

*  What do you see in markets that other traders don't focus on?

*  What are the opportunities that you pursue in markets that provide you with unique returns (i.e., profits that others don't pursue)?

*  What is unique about how you review markets and performance that helps you learn and internalize unique lessons?

*  How well do you track changes in markets and adapt to them ?

The idea that you can trade the same chart patterns and indicator readings as everyone else and outperform them simply because you maintain a better psychology is absolute nonsense.  Read the Market Wizards books and you'll see that the great traders are uniquely successful because they're doing unique things.

A great psychology comes from pursuing trading entrepreneurially and maintaining the excitement of discovering and doing new and unique things.

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8/4/2026 - This Wednesday (August 6th) at 7 PM ET, I'll be participating in a trading psychology webinar with Peter Robbins and Agnieszka Wood.  It will be a great opportunity to delve into what drives the best traders and how they are able to sustain high levels of performance day after day, week after week, for an entire career.  Here's a link for the (free) registration.

In my portion of the program, I'll go into some detail regarding the research review I'm doing to identify the dimensions of elite trading success.  Here's a very simple example:  A developing trader saved charts on multiple time frames of the market he was interested in and reviewed these to identify how the best trades each day set up across a variety of indicators.  He not only took copious notes, but replayed each of the days and time frames to get a feel for how those setups looked in real time.

Every day.  For many months.  

He figured out that how buy and sell signals set up is different in slow and busy markets.

So now he developed ways of identifying when days were slow, medium, and busy and developed what Mike Bellafiore calls "playbooks" for the different kinds of markets.

But then he figured out that, within slow, medium, and busy days, there were differences in how markets move depending upon whether market components were moving in a single direction or moving in different directions.  So he identified signals for slow, medium, and busy days depending upon what was moving and how.

All of this took many months of immersed study and review and painstaking note taking.  He is now a highly successful money manager who leads a successful team.

Creative thinking.  Deep practice.  Immersion.  Resilience.  

This is what makes greatness in any field.

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8/3/2026 - Back in 2002, I wrote that "The only way to stand on the shoulders of giants is to hoist them on our own".  What I meant by that is that, in honoring our own heroes and heroines, we internalize some of their heroic dimensions and elevate ourselves.  When we explore the lives of great traders, we find that they not only have good teachers, but they have had role models that they deeply value and respect.  In learning from their heroes, they absorb something of the heroic themselves.  The greatness that they perceive in their mentors becomes the foundation for their own quests.

This is why effective education and training is conveyed through the medium of dedicated relationships.  The best traders have had the best role models and synthesize their influence into their unique styles of finding and exploiting opportunity.  Books, videos, and social media messages can be helpful, but cannot replace the dynamic of finding our own heroes and hoisting them on our shoulders by internalizing their greatness.

As noted in the previous post, when mentors are our heroes, our pursuit of trading goes from being a challenge to embodying a quest.  No one will work hard enough to absorb the subtleties of markets unless their motivation reaches the level of inspiration.  If you can't find greatness in your teacher, it's unlikely you'll be able to elevate yourself by standing on their shoulders--and it's unlikely that you'll be sufficiently inspired to hoist them on your own.

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8/2/2026 - I once noted that the point at which we grow old is the point at which we decide that the best of life is behind us.  It could be at age 30, 50, 70, or never.  A youthful mindset is one in which we perceive a bright future and decide to pursue it.  That could be in markets, in relationships, or in our work efforts; it could be in all of these.  When we fight for the future, as Ayn Rand pointed out, we live in it today.  The brightness of the future we work toward illuminates each of our days.  

In the Trading Psychology 3.0 book that I'm currently writing, I review the large number of books written either about or by accomplished traders.  What is clear as I research is that the great traders pursue markets not merely as a career or even as a passion, but as a quest.  When we are on a quest, we dedicate ourselves to a noble and inspiring end.  P/L by itself is not a quest.  For the greats, the true quest is for mastery and understanding.  Profitability is simply a way of keeping score.  

When we pursue our quest, our lives become ones of purpose, meaning, challenge, and fulfillment.  Our efforts give us energy:  they inspire us.  We look forward to each day--and that is the mindset of those who remain perpetually passionate, ever-youthful, knowing that the rest of their lives will be the best of their lives.  

Coaching Yourself To Trading Success

 

7/31/2026 - Many years ago I met with a very successful prop trader who wanted to ask me questions about psychology.  We discussed the psychology of success and then he asked me if I had anything I wanted to discuss regarding trading.  I said, "Sure!"  He asked, "What is the size of your largest trades compared with your average size?"  I thought for a moment and said, "Maybe 3:1".  He gave me a hard look and simply said, "Consider 20:1".  

Years later, this trader would become the head of one of the world's largest hedge funds.  I never forgot his advice.

It is advice that could be dangerous in the wrong hands.  What made this trader special was that he was intimately familiar with the markets he traded and had deeply studied the patterns they displayed and what happened when those patterns played out very successfully.  His ability to recognize in real time that the pattern was recurring enabled him to size up to a huge degree, even as he was aware of what to do if the trade should reverse on him.

His self coaching followed from his intensive study of the patterns that he traded.  He viewed so many examples that he knew when the trades were working and could quickly size up.  He also viewed so many examples that he knew when the trades stopped working and he could quickly exit.  What enabled him to size up to such a degree and not let fear and greed get the better of him was the repetition of studying the trades so many times in so many ways.

A huge percentage of his year's profitability came from the small number of trades that he sized up in this manner.  His intensive, sustained market preparation made his real time coaching automatic.

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7/30/2026 - An impressive developing trader recently wrote to me, not to ask questions and seek answers but to share what he was doing successfully in his trading.  Right away that stood out.  What he shared, however, taught me an important lesson.

He observed that the specifics of his trade planning--tracking market patterns he had observed and outlining in depth every detail of how each pattern has played out--made it possible to see more clearly what was happening in real time and respond without hesitation.

In other words, trading with confidence was a function, not merely of his self-talk, but his intensive preparation.  Because he had seen and noted every facet of every setup, doubts and self-talk did not interfere with his trading.  Indeed, the right actions came to him.

This trader was succeeding because of his self-coaching.  He wasn't just creating chartbooks of setups; he was looking within each of these patterns to see what to do when.  That has enabled him to size up his best trades and has bolstered his confidence.  

Truly, this is what success looks like in markets.  I'm hoping this trader will give me permission to give him a proper, personal shout out in my upcoming Trading Psychology 3.0 book!

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7/29/2026 - How we manage time is how we manage ourselves.  We can be highly purposeful in our structuring of time, or we can go with the flow.  Once we're intentional about our use of time, then we can ask questions about how productive we were, how we could become more productive, how we could use the time more effectively.  Each block of time becomes a project, an enterprise, and we can use each block to become more and more intentional.

The goal is to do the right things and to do them more and more effectively.  Working on each block of time and learning from our performance of each block *is* our way of working on ourselves.  It is how we manage ourselves.

It is how we train.

Every day can be a workout.  Every day can make us better.  It starts with how we manage time.

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7/28/2026 - In any performance field, coaching has very limited value unless the performer is actively involved in training.  Much of what is offered to traders is framed as "education".  So we see online courses, videos, and talks from educators, influencers, and others offering secrets to success.

But in what performance field do people expect to become successful by taking courses and watching videos?  Will that make someone a successful athlete?  Musician?  Painter?  Broadway actor/actress?

And imagine performers signing up for coaching without involving themselves in a structured training program!  Would a legitimate football or basketball coach offer their services if the players were not training each day?  

Coaching ourselves to trading success can only occur in the context of our ongoing training.  Each day we build our fitness to sustain concentration, gather and organize information, recognize market patterns, and act on them flexibly:  sizing up when indicated, stopping out when they don't play out.  How in the world are those skills going to develop by talking to a coach or by reading books or watching videos?

When we try to succeed in markets without rigorous training, we quickly become frustrated when success doesn't follow.  And then we tell ourselves that the problem is with our "psychology".  And we listen to other coaches and watch other videos.  Sigh.  

Training involves daily, directed effort to build specific competencies and grow our ability to sustain market focus.  I work with many successful portfolio managers, and I've read every Market Wizards book.  No one achieved distinctive success by watching videos and following influencers.  

No one.

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7/27/2026 - A unique aspect of the upcoming trading psychology webinar will be the opportunity to hear from different coaches on topics important to trading.  (See below for registration information).  A great exercise is to assume that all of the coaching perspectives contain useful information.  Your job is to pull it together in a way that makes sense to you so that the suggestions of the three coaches can become your own self-coaching.

In any performance field, what we find is that successful performers work with multiple mentors and coaches.  They pick up different things from different experienced professionals and then synthesize these in their own ways.  One way of accomplishing that is to review performance each day and then ask, "What would each of my mentors say about what I did?"  Out of those perspectives, you can then create goals for the next day.

When you pull together the inputs from different coaches, you develop your own perspectives on performance.  This enables you to identify your strengths (and ways of building these), as well as your shortcomings.  At times, the coaches will offer the same advice, and that's when you know there's an important theme to work on.

Imagine collaborating with other traders, each of whom is coaching themselves.  Their lessons become your lessons and yours become theirs:  everyone is both mentor and student.  This accelerates development and also broadens it, as we grow in many ways that we would otherwise never think of on our own.  

On a great team, everyone is both coach and student.

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7/26/2026 - August 5th at 7:00 PM ET will be the free trading psychology webinar where I'll join Peter Robbins, author of The Trader's Journey, and trading coach Agniezska Wood for a sharing of perspectives on how aspiring traders can get to that next level in their development.  Here is the registration information.

Most traders work on their trading, some more intensively than others.  Fewer traders work on their self-coaching.  How well are you developing yourself as a trader?  What positive changes have you made in your trading?  How did you make those changes?  How could you apply your self-coaching successes to new areas of growth and expand your performance?

Every trader is both a performer and a performance coach.  The best way you could utilize your time in the upcoming webinar is to figure out how you become better and better at guiding your own trading success.  You'll make your greatest changes when you train yourself to be your own best change agent.  You can begin by figuring out the most positive changes you've already made as a trader and identify how you helped yourself make those changes.  

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7/24/2026 - Please see the post below for information about the free trading psychology webinar a week from Wednesday.  This will be a great opportunity to ask Agniezska Wood, Peter Robbins, and me questions about how you can take your trading to that proverbial next level.

A hard working developing trader shared his journal with me recently and made a very interesting and valuable observation.  He noted that he trades much better--with better clarity--if he has no distractions at all in his preparation.  I've explained in past posts how interactive teamwork helps traders process more information in different ways, helping ideas stick in the mind.  What this trader found is that such interaction *is* a distraction for him.  By preparing in a quiet, focused environment, his ideas became clearer and his execution of those ideas improved.  Yes, he could benefit from interactive review and research with other traders after hours, but what underlies his success is deep focus.

The risk is that traders can pursue breadth of processing--looking at more things, talking with more traders--that they compromise depth of processing.  Clarity gives birth to conviction.  Great traders have a process for teamwork, but they have separate processes for deep work.

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7/23/2026 - On Wednesday, August 5th at 7 PM ET, I will join Peter Robbins and Agniezska Wood for a free trading psychology webinar.  Registration is here.  This will be a great way to get different coaching perspectives and practical takeaways that can improve your trading.  

During my portion of the program, I will share a trading framework that I employ that helps trade execution, identifying spots of unusually good reward relative to risk.  If we can find those great execution spots, it is much easier to size up promising ideas and still control risk well.  The key is spotting inflection points and (psychologically) being prepared to exit quickly if the trade does not go your way promptly and also being prepared to size the position meaningfully.  That means adopting a mind frame that is simultaneously cautious and aggressive.  

To identify those inflection points, we need to follow price and volume action at a higher frequency timeframe than the one we are trading.  This is very important.  Great trade ideas set up on one time frame; great execution occurs at a quicker time frame.  The same idea applies to exits.  What gets us out of a good trade occurs at a more rapid time frame than the one we're primarily trading.  When time frames line up, we can quickly size up our positions.  When time frames fail to line up, we can quickly exit.  We coach ourselves by mindfully blending tactics with well-researched ideas.  Think of a football team.  They depend upon calling the right plays, but their success crucially depends upon how they execute those plays.  Many trading psychology problems occur because we're not properly focused on execution.  More to come in the webinar.

  

Key Ideas From Trading Psychology 3.0

 

7/22/2026 - In his book Become Who You Are, Ryan Bush points out that each of us has a "portfolio"--a collection--of virtues and personal strengths.  He explains that "Pride is essentially the feeling of your virtue portfolio going up in value" (p. 208).  And how do we increase the value of our portfolio of strengths?  Bush recommends that we "simply create a daily activity schedule, designed to slightly increase the amount of virtue you bring out through your daily behaviors" (p. 209).  By integrating work on our strengths into our daily calendars, each day becomes a workout that expands the best of who we are--and each day becomes intrinsically rewarding.  

A good question to ask in this regard is "How will my trading today make use of the best of who I am?"  In other words, in addition to a monetary P/L, we create a psychological P/L in which pride in our work becomes the gauge of success.  Bush points out that such pride is the opposite of depression.  Rather than feel worthless, we experience the gratification of realizing our best selves.  It is very difficult to trade emotionally and on tilt if our focus is on being the person we most admire in ourselves.  

Bush quotes Michelangelo:  "Every block of stone has a statue inside it and it is the task of the sculptor to discover it.  I saw the angel in the marble and carved until I set him free" (p. 230).  Each of us is a block of stone.  Each of us is also the sculptor.  Trading, at its best, is art:  What we visualize ourselves to be and carve within ourselves is what we set free.

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7/21/2026 - A fascinating book from Mason Currey is Daily Rituals: How Great Minds Make Time, Find Inspiration, and Get to Work.  The book is a collection of work routines from a variety of talented and unusually productive artists, writers, scientists, and more.  What Currey shows is that a daily routine is "a finely calibrated mechanism for taking advantage of a range of limited resources: time (the most limited resource of all), as well as willpower, self-discipline, optimism" (p. xvi).  The key idea here is that routine can be the incubator of creativity and productivity.  Recall yesterday's post about "deep practice".  When we turn deliberate practice into an intensive routine, we supercharge our learning and that fuels creative accomplishment.  That is precisely what we see among the Market Wizards:  long hours of viewing and reviewing markets and trades and uncovering hidden patterns that can be converted into opportunity.  Creative insight does not come from out of the blue.  It is the result of regular, intensive effort.

In pursuing intensive routine, the great achievers tracked by Currey develop their capacity for intentional focus.  Their routines are their gymnasiums.  How they work is how they expand their capacity for sustaining creative effort.  Writing of the philosophy of G.I. Gurdjieff, Colin Wilson points out that "Compared with what we ought to be, we are only half awake.  Our fires are damped, our drafts are checked.  We are making use of only a small part of our possible mental and physical resources".  Creative geniuses have harnessed the power of routine and intensive deliberate practice to keep themselves awake.  Their routines are not just routine efforts.  Like the work in a gym, they are efforts that strengthen us.

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7/20/2026 - The previous post asked the question of why educational programs for traders rarely act as talent incubators.  The instructors can detail patterns to trade and sound trading routines, but rarely if at all do we see the students reaching their desired levels of success.

The problem is that best practices require best processes for their implementation.  Daniel Coyle, in his classic text The Talent Code, explains that success requires "deep practice".  Not just repeated practice, but *depth* of practice.  He gives the example of Clarissa, a clarinetist, who on first assessment does not appear to be especially gifted.  She gets to a point in the music where she makes a mistake, she goes back to the beginning, she repeats the sequence again and again in different ways until it sounds right, and then she moves on in the music until she makes another mistake.  Rinse and repeat.  Gradually, she becomes a talented musician.  

Deep practice is anything but review and repetition.  It's an active process of trial and error that doesn't stop until there is mastery.  An example I'm familiar with as a writer is that I will write a section of a chapter in relatively stream of consciousness fashion and then I will take a break and slowly read what I've written, changing sentences and sentence structures along the way.  Then I reread the section.  And make more changes.  Eventually it reads the way I want it to read.  By repeating this process for every paragraph of every page, I've learned to be a good writer.

Dr. Ellen Winner has called this process a "rage to master".  It is the bridge that links talent and innate interest in a field with elite skill development.  Traders who watch videos and take courses and then hope to trade successfully short circuit the process of deep practice.  From Coyle's perspective, there is no depth whatsoever in what they're doing.  Trading success is less about chart patterns and indicator readings and much more dependent upon what we observe among the Market Wizards:  an intense rage to master grounded in deep practice.

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7/19/2026 - At one level, the coming Trading Psychology 3.0 book will be a review of all that we know about trading greatness.  At a broader level, it will be a review of what we know about greatness in life.  Trading, like all disciplines, is a path for self-development.  In defining and refining our selves, we gain both self mastery and market mastery.

There is no lack of educational and training programming for traders, some of which attempts to detail the precise trading opportunities taken by the mentor.  What is striking about all of these is that the great, great majority of the students participating in these programs never achieve distinctive success.  They learn, but they do not master.

Why is this?  If a highly successful trader lays out in detail what they are doing to make money, why can't developing traders replicate that trader's success?  When we step back and think about it, this challenge is not unique to trading.  Any great athlete can explain in intricate detail how they train and how they perform, but very few of their trainees will be able to win Olympic medals.  

Trading Psychology 3.0 will propose a unique explanation for this phenomenon.  A book title from Ryan Bush is Become Who You Are.  It suggests that greatness comes, not from mimicking others, but from the intensive application of one's own talents, skills, and passions.  Most education shows you how to be like the teacher.  Rarely is that a path to elite success.  "If you meet the Buddha on the road, kill him" is a Zen Buddhist saying that tells us that enlightenment can only come from within:  from becoming better and better versions of who we already are.  The path to your trading greatness can be found in what you are already doing greatly.

Our challenge is to become better and better versions of ourselves.

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7/17/2026 - How can we overcome the emotions that make it difficult for developing traders to master their craft?  This will be an important topic in the Trading Psychology 3.0 book.  Somehow, because of the structure of the training process at hedge funds, we don't see portfolio managers or team members going on tilt or overtrading due to FOMO.  How can we develop the right mindset as well as the right trading?

The answer lies in the learning process.  What leads to overemotional trading are the *needs* that we bring to trading.  Specifically, if we *need* P/L (because of our financial situation or because of our self-esteem), then we're going to overtrade and overreact to make profitability happen. Great trading means knowing when to *not* trade.  The best traders, as seen in the Market Wizard books, trade quite selectively:  when *they* have the edge.  They are driven to trade well and that makes them better and better over time.

At a hedge fund, becoming a money manager is a developmental process.  First you might begin as a junior analyst, then you will expand your responsibility for researching good ideas, then you will trade a simulated "paper" book of your ideas with the mentoring of the portfolio manager to learn trading skills; then you will be allocated a small "sleeve" of capital to trade based on what you've learned.  Gradually that sleeve can expand to the point where you become a co-manager and eventually can begin your own team.  All of this occurs over years.

The developing analyst/trader judges performance based upon their learning and professional progression.  Each day's P/L is irrelevant to the bigger picture of growth.  The reason the developing money manager does not experience tilt and frustration is because they know they are meant to learn from losses.  They are focused on their learning P/L, not their dollars and cents each day.

This is why it can be very helpful to participate in a quality training program for traders.  The right mentoring keeps us focused on the big picture of our growth and away from trading ups and downs.

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7/16/2026 - What is the greatest impact on professional trading that I've seen from AI?  Initially, AI was super helpful in terms of coding ideas from traders.  Now we're seeing AI as a fast and deep research tool, capable not only of identifying promising trade ideas but also trading them.  For the first time in years, I'm seeing teams actually shrink in size as the efficiencies of AI make the hiring of analysts and junior traders unnecessary.

There is, however, a more profound transformation coming from AI that will be explored in the Trading Psychology 3.0 book.  With the ability to quickly research and identify trading opportunities and automate those, there is no reason why tomorrow's daytrader can't be a portfolio manager.  In other words, the benefits of diversification and holding different positions that will thrive in different market environments will increasingly become an essential part of daytrading.  Imagine a daytrader who simultaneously holds short-term positions in different stocks and different markets:  some might be scalps, others might be intraday position trades, others might be swing opportunities.  Now the trader's job becomes one of balancing the various positions, creating multiple ways of winning based upon rigorous research.

Many traders are looking to training and education sites for ways of playing the game better.  Soon, however, it will become a different game entirely.  Tomorrow's trader will look increasingly like today's hedge fund manager.

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7/15/2026 - The book Trading Psychology 2.0, published in 2015, was an effort to take trading psychology beyond the usual themes of controlling emotions and avoiding impulsive behavior to a look at the best practices of the successful traders I was working with at professional trading firms.  A little more than a decade later it's time for an update.  A number of excellent books have come out during that time detailing trading success.  I've also learned a great deal about the specific trading practices that contribute to success and especially the overarching processes that help traders adapt those practices to ever-shifting market environments.

At the heart of the new 3.0 book will be a good old fashioned literature review.  In the academic world, where I've worked since the 1980s, one begins a research project with a review of all the important works that have been published, the answers they provide, and the questions they leave open.  The idea is that, in true science, knowledge is cumulative:  we build our understanding step by step, contribution by contribution.  Trading Psychology 3.0 will review a large number of books written by successful traders and successful trading coaches to highlight what we know about great trading--and what still remains to be discovered.

One key idea from the 3.0 book will be the degree to which profitable trading is process driven.  It is far more than searching for patterns to trade and setting stop loss points and profit targets.  Process oriented trading incorporates a set of routines that examine markets and track the evolution of opportunity and an entirely separate set of routines to review performance and track improvements that have been made and that need to be made.  It is the consistency and intensity of these processes--many of which are performed by teams in professional settings--that shapes profitability.

A forthcoming book by Brian Mazza, called Nothing Changes if Nothing Changes, draws upon the structure of physical development to identify what we need to do to train success in all areas of life.  The idea of developing our trading as a training process is a powerful one, where the goal is not just improvement but transformation.  If how we prepare for trading each day is not a true workout can we truly expect to transform ourselves as traders?