Saturday, April 25, 2009

The Key to Changing Our Psychological Patterns: Coaching Traders in Real Time

What I have found is that applying cognitive, behavioral, and solution-focused techniques with traders *while they are trading* is the most effective form of coaching for traders. This passage from my second book will explain why, and the references at the end of the post point to specific techniques that you can apply, real time, to your own trading:

From Enhancing Trader Performance:

"Gurdjieff's fundamental insight--now finding validation in cognitive neuroscience--is that human beings are not 'always one and the same.' We experience different emotional, physical, and cognitive states in response to environmental events, leading us to think and behave one way in a given situation and quite differently in others.

An objective observer of the human race would conclude that people lack self-control. They are not always one and the same. This allows normally responsible individuals to forget about risk management when they are trading large size. It enables us to develop elaborate trading plans, only to see them fly out the window when markets move violently. We are not fully intentional beings: Too often our best intentions are derailed by momentary events and experiences.

How we think, feel, and behave are relative to our states of mind and body. We are not one and the same, because we continually shift states, processing the world very differently from one mode to another...

Brief therapies are effective to the extent that they integrate our selves and help us become more intentional. Cognitive therapies accomplish this by training us to process the world differently. Behavioral therapies unify us by creating novel response patterns to challenging life events. To think and act as we choose: This is the reward of becoming our own therapists...

The fact that we experience continuity in the self and yet can be so fragmented is the source of many of our emotional difficulties--and most of the problems we encounter in trading. Because of our sense of continuity, we identify with the states we are in; each, we think, is a reflection of reality...

Quite simply, the 'me' in us--our sense of who we are--is stronger than our 'I'--our ability to intentionally guide our actions
. To the extent we are divided, we do not have a fully free will. We are at the mercy of environments and events and what those trigger in us...

Too often therapy is long term, not because the problems are so severe and intractable but because therapy is occurring while the client is in one state of mind and problems occur in quite another...Brief therapy yields changes in short periods of time because it operates in real time: It works with people in the settings--and in the states--in which problems typically occur...You cannot achieve unity of self unless you work on it while you are fragmented" (p. 193-194).

Self-Help Resources for Traders (Practical Brief Therapy Techniques):

Enhancing Trader Performance:

-- Chapter Eight: Cognitive Techniques for Enhancing Performance
-- Chapter Nine: Behavioral Techniques for Enhancing Performance

The Daily Trading Coach

-- Chapter Five: Psychodynamic Frameworks for Self-Coaching
-- Chapter Six: Cognitive Approaches to Self-Coaching
-- Chapter Seven: Behavioral Approaches to Self-Coaching


Ken said...


If your mind is scattered, it is quite powerless."

~Dalai Lama
about 1 hour ago from web

SSK said...

Hello Brett, It is certainly refreshing to see the changes one can make with your counsel, and compare that to the drug pushers that call themselves Doctors, that seem to only get their clients hooked on drugs for issues that Breif therapy could certainly address. Thanks agian, Best, SSK

leon t said...

dr : this topic is best expalined in eckart tolle's book " the power of now". for many years i tokkn psychology courses in college. and never felt any closer to understanding the human condition. even after reading the book by tahat name. specially then. however, i used to see in books, sections called "eho psychology". not knowing what it meant. after all, i had to write the paper, take the test, get the garde etc,.
now after reading tolle. he best sumarizes it, in one line. it's as if you were asking the chief of police to find an arsonist. when the arsonist, is the chief of police. the problems of the mind can not be solved by the mind. when the main problem, the ego, is created by the mind.

on a separate note. al brook's book is out. one of many great lines. "trading is a business , not a religion, so don't look for a trading savior". speaking of tv commentators.

leon t said...

correcting typos:
ego psychology
get the grade
forgive my failure to read what i write.
i'll correct before sending anything next time.

Brett Steenbarger, Ph.D. said...

Thanks for the ideas and feedback--


Nebojsa said...

Hi Bret,

I very appreciate your work and think it is very helpful.
Have you ever tried to use some of neuro ling. programming technique in your work with traders?
I think that some meta programs have big influence on someone's thinking and behaviour.
And, NLP re-framing techniques find very useful to deal with this.