Tuesday, May 29, 2007

Building Self-Efficacy With a Solution Focus

My last post identified self-efficacy as an important link between a person's goals and their ability to sustain action toward those goals. If we experience ourselves as efficacious--if we feel that we are in control of our destinies--we will be more likely to muster the motivation to do what we know is best for us.

In my co-authored book The Art and Science of Brief Psychotherapies, I wrote a chapter specific to solution-focused brief therapy (SFBT). The idea behind SFBT is that, instead of focusing on a person's problems, it is often helpful to identify strengths and build upon these. The psychologist using SFBT identifies what you're doing when you're not having problems; when you're acting in a manner more consistent with your goals. From those exceptions to problem patterns, it is possible to find solution patterns: positive modes of thought and behavior that can be duplicated in new situations.

Thus, if I'm working with a trader with discipline problems in a SFBT framework, I will review his recent trading with him and work with him to identify occasions when he *did* follow his plans and trade in control. We'll then figure out how he was able to do that and create a solution pattern from his own recent behavior. Perhaps, for instance, we'll learn that he was able to trade in a disciplined way when he traded a position reasonable for his portfolio size, took a break after losing trades, and clearly identified a market direction in his pre-opening preparations. We might then use a self-hypnosis technique to mentally rehearse these solution patterns again and again--until they become a more natural part of the trader's repertoire.

Research on SFBT suggests that the approach works because it directly improves the individual's self-efficacy. Here's what I had to say in my book chapter:

"Beyebach et al (1996) examined SFBT outcomes and found that the sole significant predictor of success was client internal locus of control, which reflects the degree to which individuals perceive that they are in control of their lives. The internal locus was positively correlated with favorable pretreatment reports of change and subsequent goal formation in counseling" (p. 96).

Pretreatment reports of change refer to partially successful efforts that the person made prior to getting professional help. By focusing individuals on what they are already doing to change and by helping them form clear, doable, positive goals, the solution-focused approach enables them to feel more efficacious, more in control of their own lives.

This, I have found, is the most effective means for helping people bridge the gap between their actions and their goals. If coaching or counseling focuses on problems and what people are doing wrong, it unwittingly reinforces the lack of efficacy. By identifying what you're already doing--even in a small way--to bring you closer to your goals and then gradually building on that, you increase your sense of control and eventually pave the way for larger goals and greater progress.

Positive focus, measurable and achievable goals: these are key to a trader's self-coaching and improved control over one's own actions.


A Solution-Focused Linkfest

The Most Important Question to Ask When You're in a Slump

Solution-Focused Trading