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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Making Trading Enjoyable

 

11/28/2025 - I worked with a portfolio manager who put on his initial positions with a pretty wide stop level and a pretty wide target.  He saw a good opportunity with good risk/reward and didn't want to be perfectionistic about getting the absolute best price.  Once the initial position was on, he told me he hoped it went against him so that he could add at better levels.  As long as the trade didn't stop him out and nothing happened in the world that made him question his view, he treated adverse price movement as opportunity.  He actually looked forward to the market moving against him.

Conversely, he established a first target to take profits before his positions hit his primary target.  By taking profits at the first level, he ensured his position would be profitable overall.  Further, once he hit his first target, he raised his stop to breakeven.  How he managed his trade was how he managed his psychology.  He enjoyed trading because he maximized the 

consistency of his profitability rather than being a perfectionist about P/L.  And while his position was doing its thing?  He was already talking with the other traders he valued and generating the next promising idea.  Instead of staring at screens, he was engaged in the enjoyable pursuit of creativity.

How we trade shapes our psychology--  

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11/27/2025 - What is the most destructive emotion in trading?  What destroys the joy of our progress and turns normal, expectable losses into catastrophes?  I would argue that the most destructive approach we can take to trading is perfectionism.  Once we adopt a perfectionistic mindset, we cannot enjoy trading.  Good enough is never good enough.  Progress is never perfect.  Even our wins don't bring celebration, because we always could have won more.

Where does this perfectionism come from?  It's a great example of how one of our strengths (in this case achievement motivation) becomes a weakness when taken to an extreme.  When we so push for achievement that we cannot stop and appreciate our progress, we create a toxic psychological environment for trading.

It's great to strive for improvement; it's equally important to celebrate our progress.  Indeed, celebrating what we've done well is the best way of providing fuel for the quest to improve further.  If trading is not enjoyable, we quickly run out of fuel.

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11/26/2025 - When we adopted Nomi Lyn (chocolate point Siamese cat), our first priority was to integrate her with our three other cats.  As you can see above, she's bonded well with Molly Ruth (white khao manee) and Ares Payton (reverse black tabby).  Her bonding with Shay Gil has taken a bit longer, as I recently pointed out, because of Shay's difficult experiences in a rescue shelter.  Providing an environment where they can all flourish is tremendously personally rewarding.

Let's say I felt the need to have each of the cats enter cat shows and win awards.  All of a sudden, I have to control their access to one another, structure their time to teach them routines, and make sure that one of them doesn't get the others sick.  In short order, I would no longer treasure my time with the cats.  Instead of enjoying them as an end in itself, now they become means to my ends.  For me, that ruins the experience.

Similarly, I enjoy writing.  The joy of writing is learning about a subject and then using the writing as a way of thinking out loud, making connections, and deepening that learning.  If I were to suddenly prioritize how popular my writing was to become--how many books I would sell, how many hits my posts would get--that would change what and how I write.  I would no longer enjoy the experience.  Writing would become a means to an external end, not a end in itself.

Trading is more challenging in many ways because we *do* pursue trading for the end of making money.  Yes, it can be enjoyable, but it's different from treasuring the time with our cats or our children.  Ultimately it *is* a means to an end.  And that can spoil the experience for those who treasure the quality of our experience.

Every so often, I'll add something new to my trading:  a different time frame, a new indicator, a different market instrument.  When I add the new element, I reduce my size to the point where P/L absolutely doesn't matter.  Then I see if I enjoy the new perspective; if it leads to fresh insights.  By taking P/L out of the equation, I can see if the trading is a rewarding activity in other ways.  If it is, I know it's worth including in the repertoire. 

Growing the trading repertoire is like growing the cat family.  Trading is most likely to be rewarding--emotionally and financially--if we make it personally rewarding.        

How We Develop: As People, As Traders

 

11/25/2025 - What if I told you that I had begun a romantic relationship and that, every day, my partner says or does something that I can't stand and I find myself becoming emotional and unsettled.  I come to you and ask how I can improve my mind frame in the relationship.  What would you say?

At some point, sooner rather than later, you would question whether this is the right relationship for me.  A promising, good relationship should not spend most of its time in conflict!  The answer to my dilemma is to find a more suitable partner, not to keep trying to change myself to fit into a situation that isn't working.

Now take that same reasoning and apply it to our trading.  If trading is leaving you feeling stressed, anxious, and frustrated, perhaps the answer is not to pursue psychological help.  Perhaps how you are trading doesn't fit who you are.  If your style of trading frustrates your most basic interests, needs, and strengths, then you will always struggle with markets.

If I were to adopt a true "scalping" style of trading where I was buying bids and selling offers and holding positions for seconds to a few minutes, I would become frantic and overloaded.  That style of trading does not fit the more analytical approach that represents what I'm good at and what I enjoy.  As soon as I step back from the moment-to-moment trading, explore cycles in market behavior, and align my trading with the cycles that cannot bring us higher or lower, I feel in sync with markets and trading becomes fulfilling.

We develop as traders the way we develop as people because our best trading is always an extension of who we are.  Tilt is often a sign that your trading is frustrating who you truly are.

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11/24/2025 - Every day, we exercise some part of our personalities and development.  The question is whether that exercise is planned and directed, or whether it is random and unplanned.  If we waste time routinely, we exercise laziness.  If we overeat, we exercise a lack of discipline.  If we reach out to others, we exercise kindness.  Everything is exercise.  What we do, we internalize.

So what are you exercising in your trading?  A true process orientation to trading is one that exercises our greatest interests and talents and that opens us to listen to and follow markets.  When we lack a rigorous trading process, we exercise the wrong functions, listening to ourselves rather than to markets.  Great ideas come to us when we are focused and study the right things.  Great trading exercises open-mindedness and flexibility--and our ability to live our lives with flexible open minds exercises our greatest trading abilities.  

In the long run, how we live our lives is how we will trade.

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11/23/2025 - How does expertise develop?  We begin as students and then we become apprentices to successful performers.  That is how medical students grow into interns and then grow into becoming residents and attending physicians.  It is how a freshman football player practices with the starters, helps them scrimmage, and eventually gets into games and becomes a starter.  It is how a beginning actress becomes a small role-player in a production, becomes a backup to the star, and eventually gets larger roles herself.  We develop expertise by developing professional roles.  Through that development, we gain the experience of training, but we also gain the expertise of being a true performer.  In the hedge fund world, a junior person begins as an analyst, sees how ideas are traded, grows into managing a "sleeve" of capital themselves, and eventually grows into becoming an associate portfolio manager and a full PM with their own team.

We grow through professional roles and from the feedback we get from our experience and from our mentors.

No one develops expertise in isolation.  In any performance field.

Much of the frustration encountered in trading has nothing to do with lack of control over emotions, lack of discipline, etc.  It is a function of a lack of training and mentoring--and a lack of opportunity to internalize the new roles and experiences of expertise.  Trying to improve your psychology while trading in isolation is like trying to improve your game as a basketball player without being part of a team.

The most promising thing a developing trader can do is form a pod with other developing traders and learn from each other and with each other.   

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11/21/2025 - The greatest part of our psychological growth occurs through social roles.  When we take on a role with others, we inevitably receive feedback about who we are and how we perform and we internalize that feedback.  When we take on many social roles, we absorb a wide range of such feedback and develop a broad sense of who we are and what we do well.  A child takes on roles with parents, siblings, and peers and then broadens their sense of self through roles at school, in extracurricular activities, in social groups, etc.  What is important in this process is that we internalize our sense of self through relationship experiences.  Everyone we interact with is a mirror, showing us something of ourselves.  In our work, our family lives, our social and community lives, we experience many mirrors and build a diversified sense of who we are.

If you understand this social role perspective, you can appreciate why solo trading is psychologically dangerous.  Trading is a challenging activity, and it can be an enjoyable application of our skills and talents.  But undertaken in isolation, it is a limited experience.  We operate in a relative vacuum.  We do not encounter fresh mirrors that stimulate new experiences of ourselves.  Over time, we become stale.  We do not grow as people.  Sometimes we attempt to fill that void by trading more and more, hoping that profits will provide us with the fulfillment and inner satisfaction that we lack.  We know how that ends up.

A major benefit of trading in a team is the opportunity to take on fresh roles as part of the trading process.  We mentor others, we share ideas, we enjoy the company of our mates.  At the firms where I work, an important part of the enjoyment and fulfillment traders experience in their work is in what they learn from others, what they give to others, and the roles they play within the team.  When there is fulfillment in those roles, there is no need to put all of one's self-esteem eggs in the trading basket and overtrade.  A rich personal life outside of markets and a broad range of roles within one's trading experience create psychological wealth--and that is what can help create trading wealth.  

The Power of Perspective

 

11/20/2025 - Recent markets have been a great example of how, across time frames, overbought levels that cannot push us higher and oversold levels that cannot push us lower lead to a covering of positions from trapped traders.  The psychology of trading comes, not from simply focusing on our own mindsets, but by entering the mindsets of other participants.

11/18/2025 - An interesting and valuable exercise to change our trading--and our trading psychology--is to shift our perspective on trading opportunity.  A major danger for active traders is that, in their desire to achieve, they do more and more and wind up overtrading, over-managing positions, and basically getting in their own way.  They clearly see a trading opportunity, but have trouble simply holding onto the idea or the position.  One thing I've observed over the years is that we tend to trade whatever timeframe in the market that we're actively watching.  Inevitably we see patterns forming and find ourselves reacting to those.  Thus, if we have a bigger picture view and watch the market tick-by-tick, it's easy to overtrade that view and miss out on our original idea.

The exercise to change our trading is to limit the number of trades we're allowed to place each day or week.  For instance, suppose I'm an active trader and now only allow myself to place one trade per day.  Wow; that pushes me to focus on my very best opportunities and my very best ways of trading those.  With only one trade available to me, I have to make sure it counts.  That prods me to truly allow the trade to set up, and it pushes me to avoid overtrading.  

The real perspective changer is to see how our P/L actually changes as the result of trading less and staying less glued to screens.  In my case, the profitability of trading has risen noticeably as I've let my ideas (and positions) breathe.  There is a big difference between the need to trade and the need to be profitable.  Often the first interferes with the second.

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11/17/2025 - How we manage our positions and our risk ultimately shapes our trading psychology.  Sound trading process builds a sound trading mindset.  Here's an important way in which that happens:

As I've worked on my trading, I've found it helpful to follow the lead of some of the best portfolio managers I've worked with and make a distinction between initial positions that I take in an idea and subsequent positions that get large in that idea.  The first position is small enough to weather ups and downs without getting stopped out.  There is a stop, but it's not close to the market.  The first position is my "investment" in the idea that I've researched.  It has a target, but also not close to the market.

The subsequent position is much larger and leverages the initial position once I've determined that the market is rewarding the original idea.  It has a much tighter stop and is based upon the market flows that are telling me that the idea is playing out.  Thus, if I have an initial long position and the market opens strongly with very positive TICK, I might go with that early strength and set my stop for that added piece (and perhaps the entire position) below the morning low.  There is a short-term target for this larger piece based upon the levels that I believe we should be able to take out intraday.  Those take-profit levels are entered into the market, allowing me to let the position ride.

What I've found is that, if my ideas are wrong, they're usually wrong pretty quickly.  I'm sized smallest at the outset and only get larger once the market confirms my view.  That keeps me in an opportunity mindset and keeps my losses contained, even as I pursue significant gains.

The important thing here is not to copy what I do, but to understand that trading psychology is something you can work on by shaping your trading process.  How you trade reinforces how you experience your trading.

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11/16/2025 - A measure I have found helpful on an intraday basis is an indicator typically viewed on an end-of-day basis:  the number of stocks across the NYSE universe that are advancing on the day versus declining.  (On the Sierra Chart platform, the symbol is $NISS).  When the market makes a new high or low or tests recent highs or lows, it's worthwhile seeing if the strength or weakness is confirmed across the universe of stocks.  Often, the largest stocks are the ones displaying the directional movement, but many shares are not confirming the move.  This can also be seen in the NYSE TICK statistic, which will show that a broad range of shares aren't confirming a move by trading on upticks or downticks.  Once again, the edge here is finding market participants who will be trapped when the buying/selling is exhausted.  Too often, traders are so focused on trend and momentum on the chart they're watching that they fail to look at broader market context and what is happening across market participants who ultimately move markets.

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11/14/2025 - We see with the recent price action in the U.S. stock market a sequence referenced below:  The market rises toward new highs (or may make marginal new highs), but a number of segments of the market fail to show meaningful strength.  Looking sector by sector, we can see that large-cap stocks (DJIA) made new highs recently, but small caps (IWM) lagged and many sectors stayed below their recent peaks, including the former leaders, technology shares (XLK).  This rotation and failure to broadly make fresh highs was a sign of exhaustion and now is playing out in active selling.  We will need to see some sign of the selling bringing in fresh buyers before we can think about any resumption of the upside.  The balance in the NYSE TICK numbers will give a good short-term clue as to whether lower prices attract higher time-frame, larger participants.

The broader point is that, when we look inside price action, we can detect the first signs of whether a move is likely to continue or reverse.  When we look across segments of the market, we can detect whether a move is broadening out or simply turning into a reallocation of existing positions.  How we trade needs to be a function of the type of market we're seeing.  Updating our perspectives each day--and sometimes within the day--allows us to trade flexibly and knowledgably.

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11/13/2025 - So often, the views we trade start with conviction and end in staleness.  We become anchored to our conviction and thus become less able to pivot when markets change.  A great trading process is to look at what you're trading with fresh eyes daily.  For instance, I recently transitioned to a small short position in the S&P 500 index market.  During the day and especially at the end of each trading day, I study the charts of the component sectors of the index, such as technology (XLK), consumer discretionary (XLY), etc.  I also study other equity indexes, such as the Russell 2000 small/midcaps (IWM); the NASDAQ Index (QQQ); the Dow (DIA); etc.  I use the Barchart website to identify how many stocks are making fresh one-month highs and lows and three-month highs and lows, and I use the StockCharts site to track the number of stocks producing buy and sell signals across various technical indicators.  In short, I want to see the market from many perspectives to see if my view is gaining or losing support.  In updating my view, I become prepared to hold my position, trim my position, add to my position, or exit my position.  

Looking at the market from multiple perspectives ensures that we can adapt to the ever-changing flows in markets.  The goal is to prevent your conviction from turning you into a convict.  Our views can imprison us, or they can evolve and help us navigate opportunity.  A key trading psychology strength is open-mindedness and the flexibility to strongly believe something and to be very prepared to shift that belief.

The Psychology of Price Action and Volume

 

11/12/2025 - The one edge I've found to be most consistent in short-term trading is using price, volume, and high-frequency data (see below) to identify when buyers have been aggressive but cannot push the market to new, relative highs and when sellers have been aggressive and cannot push the market to fresh, relative lows.  The question that is worth asking in this context is:  "Who is trapped?".  It's the covering of positions, combined with the action of momentum/trend traders, that creates big moves and market reversals.

This occurs on all time scales, and it occurs across different stocks and sectors.  A promising trading approach is to screen stocks based upon the degree to which traders have been active in one direction and can no longer sustain the trend.  When we see this occurring across stocks and sectors and especially across time frames, we often have a great reversal opportunity in the market.

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11/11/2025 - The measure of price action and volume that I have found most consistently helpful for short term trading is the NYSE TICK and its cousins, the SPX TICK, the NASDAQ TICK, and the Russell 2000 TICK.  (I track these in real time on the Sierra Chart platform).  These measures capture, many times in a single minute, how many stocks are trading on upticks versus how many are trading on downticks.  Here are a few observations:

*  When the amplitude of the TICK measure increases (higher highs/lower lows), we see a broadening of participation by the institutional players that trade entire baskets of shares.  When we see decreasing amplitude, there is reduced participation in the accompanying move.  That often occurs as moves exhaust themselves.

*  When the various TICK measures differ significantly, it means that different parts of the overall market are attracting buying/selling.  This typically occurs as part of rotational markets.

*  TICK lows that cannot make fresh price lows tend to occur in uptrends and can offer good short-term entries.  The same is true of TICK highs that cannot lead to fresh price highs.

Changes in the distribution of the TICK measures; changes in their distributions relative to one another; and changes in their ability to move price are important short-term tells for traders.

The important things in markets occur within the bars you're watching on charts.

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11/10/2025 - Such an important tell:  When the market moves higher or lower, do more or fewer stocks participate in the move--especially when the market is already overbought or oversold?  It's not at all unusual for topping markets to display fewer new highs despite rising prices and fewer new lows despite falling prices.  Last week's price action relative to breadth was a great example of this and has led to the market strength late Friday and in the premarket.  This same principle applies to global macro markets:  When one equity index is making new highs, but others are lagging, that is a very different global growth story than a situation where everything is moving higher in concert (and vice versa).  How markets move tell you who is doing the moving--and understanding that is the best path to a clear-headed psychology. 

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11/9/2025 - A number of traders have asked me lately why they are struggling in their trading.  When many traders are struggling, there's a good chance that they haven't developed psychological issues with their trading all at once.  Rather, something in markets has changed and they are struggling to adapt.

Since the end of October, the SPX has dropped almost 2%.  During that same time, the percentage of stocks above their 20-day moving averages has risen meaningfully for energy stocks, financial stocks, healthcare stocks, real estate stocks, and utilities stocks.  In other words, there has been sector rotation away from the strongest names and into the parts of the market that had been underperforming.  Just look at the last five trading days in XLK (technology) and XLC (communications), for example, compared with the past week in XLE (energy) and XLF (financials).  Airline stocks during this period of airport turmoil?  They're up on the week.

There's a very important lesson here.  When your trading performance declines, you need to do the same thing that you do when your car engine begins making loud noises.  You look under the hood.  Something has changed and needs to be addressed.  The market story is occurring across multiple charts and multiple time frames.  Becoming locked in particular charts, time frames, and views is a failure to adapt.

The best traders always approach the market with fresh eyes and often that leads to fresh ideas and trades.

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11/7/2025 - The largest market participants are very concerned with value.  When a stock or other asset moves higher or lower on elevated volume, it's generally a clear sign that institutions are revaluing that asset.  The traders I work with spend a good deal of time scanning news and talking with informed participants to see if the emerging story might have legs.  Where the beginning trader might get down because they "missed" the move, the informed trader recognizes that a breakout in volume and volatility that takes us to a new price level could be the start of opportunity.  This is particularly the case when the move on elevated volume is occurring in a specific sector ETF, such as consumer discretionary stocks (XLY).  Such moves often flag sector rotation among large money managers.  Rarely is such rotation a one-and-done phenomenon.  When institutions engage in a broad rotation, it's a sign that they're seeing strength in one part of the economy and weakness in other parts.  An oversold sector that does not show subsequent buying interest is telling a story.  A sector that moves higher on elevated volume and barely corrects is also telling a story.  As in chess, we succeed by entering the mindset of those we're playing against.  We don't want to become so focused on our own psychology that we miss what's happening on the chess board.