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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Questioning Our Assumptions

 

5/21/2026 - What's the most basic assumption that developing traders make?  They assume that they'll make money by anticipating the directional price movement of a particular instrument.  Their choice is to go long or to go short.

When we enter the professional trading world, we find a variety of trading strategies.  For example, many money managers trade relative price movement.  They take two related instruments and trade one long and one short.  If they think the yield curve is steepening, they will sell a basket of bonds at the long end and buy a volatility-weighted basket at the short end and profit from the relative movement.  Or they will be long one stock in a given industry that is showing recent growth and short another stock in that same industry, again volatility weighting the pair.  As long as the one stock outperforms the other, it doesn't matter what the overall market does.  It's a different game.

Or perhaps the professional trader expects an increase in volatility given likely geopolitical developments.  Buying equivalent amounts of puts and calls across relevant instruments allows for profitability regardless of the direction of the reaction of the underlying instrument.

There are so many strategies for making money in markets and the question is which ones most play to our interests and strengths.  When we assume that there is one way to make money, we limit ourselves to a crowded universe and fail to take advantage of much greater, lesser-known opportunities.

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5/20/2026 - One of the most common challenges I hear from experienced, successful traders and money managers is balancing the need to hold onto positions that have further to run and the need to hold onto profits during volatile price retracements.  In other words, how can traders participate as fully as possible in a trending move without getting shaken out along the way?  This need to blend vision and opportunity with prudence and risk management is not an issue of fighting weaknesses, but rather ones of balancing strengths.

This is a classic example of how better trading can create a better trading psychology.  For instance, if the trader can find inexpensive options structures as hedges, this could very much cushion the downside on retracements while allowing the trader to remain in a meaningful trending position.  Similarly, if the trader can define a core position that will be held onto through an anticipated move and then trade around that core when retracements offer good risk/reward opportunities, that too can bolster the trader's psychology, as pullbacks now are no longer threatening.  Too, if the trader holds multiple positions that are not highly correlated, one might retrace, while others continue to profit, cushioning overall P/L.  In such a case, diversification is a trading psychology strategy, not just a trading strategy.

The beginning trader uses psychology to avoid mistakes.  The advanced trader draws upon best practices to cultivate a winning mindset and sustain motivation.  This is why it is so important to study, study, study one's best trades and best trading periods.  Hiding among our successes are our strengths and what ultimately will bring us to our trading goals.  All trading reviews should be exercises in positive psychology.

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5/19/2026 - The Barchart site notes that the yield on 30-year Treasuries has climbed above 5% for the first time since 2007, which preceded the global financial crisis.  While markets are focused on AI and related growth themes, how will higher long-term rates affect the housing market?  Payments on U.S. debt?  Inflation and the value of the U.S. dollar?  

Meanwhile, negotiations between the U.S. and Iran continue, as neither side wants all-out war, but neither side will concede control of the Straits.  What if the only option becomes a military one and the Straits remain closed indefinitely?  $150 per barrel for oil?  $200?  

The point is not that these scenarios will necessarily happen, but that the market is not pricing in anything remotely like these scenarios.  Rates are telling us about inflation and oil prices are telling us what could further stoke inflationary expectations.  

The best money managers I work with develop multiple "what-if" scenarios and then walk forward to see if the odds of those playing out are increasing are decreasing.  That is very different from looking at chart patterns in a particular instrument.  It is in the story told by multiple markets and regions of the world that we can gain a sense of the market's bigger picture.

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5/18/2026 - I recently spoke with an unusually successful hedge fund team.  Their returns were particularly interesting because they didn't trade all that much.  They developed big picture ideas--many of which were unique--and they occasionally tweaked the expression of these views and the combination of the positions in the portfolio.  The lion's share of their time, however, was spent in developing ideas.  Rarely did they express their ideas in terms of going long or short a particular market.  Rather, they were interested in the relative performance of multiple markets in the face of changes in the world.  For example, if their research pointed to higher oil prices, they would express a number of their views in rates markets (expressing an inflation perspective) and equity markets (expressing different growth perspectives for oil producers vs. consumers).  The result was a diverse and unique combination of positions that provided multiple ways to win.

Still, that is not what I found most interesting in their approach.  They had big picture views and therefore focused on big picture price targets.  Perhaps their most unique quality was their ability to hold onto positions while they worked out.  Moves that would have shaken out other traders had them contemplating adding to positions.  Yes, they were wrong on occasion, but they had a number of amazing winners.  Their skill was finding areas of unique opportunity and then committing to those.  The capacity for commitment was their key talent.

Similarly, some people are great at dating and meeting people at social events.  Others are great at committing to and cultivating long-term relationships.  It's not that the team I spoke with was so great at controlling their emotions; their greatness could be found in their capacity for commitment.  

Which few traders talk about.

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5/17/2026 - The U.S. stock market has been on a historic run.  Many traders I hear about have not captured the lion's share of this rally and are frustrated.  They are looking for a way to get in when the market is stretched and the market has not let them make their comfortable entry.

Please allow me to point out a few things.  

*  Energy (oil) prices continue higher in the face of seeming Middle East progress toward peace;

*  Inflation expectations are on the rise and we're seeing higher yields at the long end of the curve;

*  European stock prices (VGK) remain well below their late February highs;

*  Europe and the Far East as a whole (EFA) remain below their late February highs;

*  Oil importing countries such as Australia (EWA) and Japan (EWJ) have not made new highs;

*  We have recently seen more U.S. stocks make fresh 52-week lows than highs.

*  Many U.S. stock sectors have not made new highs, such as raw materials (XLB); financial (XLF); consumer discretionary (XLY); healthcare (XLV); and industrials (XLI).  

*  The equal-weighted version of the SP500 (RSP) has not made new highs.

Well, you get the idea.  If and when this market corrects, everyone will look back at how obvious the top was.

It pays to question our assumptions and look beyond a broad market average to see what markets are actually doing.  A rising tide lifts all boats.  Many boats are not rising.

A Different View Of Trading Psychology

 

5/15/2026 - I encourage you to check out this video of Neil Young singing Like A Hurricane.  The song is great, but it's his performance that is extraordinary.  Total energy and passion.  Yes, I know that "process" is important in trading and "risk management" is essential.  But we can become so immersed in P/L and the rules of trading that we don't trade with passion.

Whatever you do in life, do it with genuine passion.  Life is meant to be celebrated.  Relationships, trading, careers, personal interests:  make them count.  Make them passionate.  Too much of trading psychology is about prudence and emotional self-control.  There's a place to celebrate passion.  Yes, we may grieve loss, but we're also meant to celebrate success.  

Passionately.

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5/14/2026 - In her book on how children handle loss and grief, Dr. Corinne Masur makes an important point.  During a time of upheaval and loss of an anchor in life, it's important to "keep rules and routines as consistent as possible" (p. 173).  Loss brings a psychological sense of instability.  Grounding life in consistency helps bring stability to the difficult life period.

This is rarely acknowledged in trading psychology, but the same principles hold.  If traders go for significant gains in markets, they will occasionally experience significant losses.  Sharpe Ratios for the usual directional trading ensure that the magnitude of losses will be correlated with the magnitude of the gains.  

As emphasized below, what motivates traders is not just money, but a dream of success.  When those large losses occur, the dream is threatened.  Stability is lost.  How can traders deal with such upheaval?  We rarely read of this challenge.

For the trader, as for the child, the best coping comes from doubling down on routine and the familiar processes that have brought past success.  This not only brings a sense of stability, but also helps prepare the trader for the eventual comeback.  It is tempting to want to make the money back all at once, but such overtrading can only lead to further losses and emotional injury.  

We often hear of the importance of remaining process driven in trading.  Yes, this grounds us in our best practices, but it also grounds us emotionally when our large bets result in large losses.

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5/13/2026 - As AI becomes an increasing part of traders' processes of finding, expressing, sizing, and managing trades, how will this impact trading psychology?  I am already working with professional traders who have expanded their analytical capabilities through AI platforms.  They are finding more opportunities and different ones.  This is exciting in one way, but poses a challenge in another.

As noted below, traders approach their work as entrepreneurs.  They have a dream of beating the market.  How will they feel if it's not them beating the market, but the computer?  A major reason traders operate in a discretionary rather than systematic manner is that they want the trades to be *their* trades.  Otherwise, they could turn on their systems, walk away from screens, and not be involved in market ups and downs at all.  

AI has the potential to study the patterns of a trader's best trading and find opportunities that are in the trader's wheelhouse.  Based on the trader's past performance, an AI platform can recommend ways of managing those trades--or could even place the trades independently!  That would lead to amazing consistency in trading process, but it's achieved at the expense of the trader's discretionary participation.  For many traders, this would be an emotional loss.  It might similar to the response of store owners who find their businesses overwhelmed by the growth of large department stores and shopping malls.  The store owner/entrepreneur doesn't want to manage a department store.  Progress, at an emotional level, becomes a threat.

To be sure, even in a world of online shopping and shopping malls, there is room for small boutique stores with unique offerings.  Innovation and uniqueness become central parts of the psychology for the entrepreneur.  Today's trading psychology, so grounded in the fear/greed mindset of beginning traders, will evolve in the coming world of AI.  Increasingly, the new trading psychology will be about innovation within niches and the ability to deliver unique returns.  AI is great at finding answers.  The new market entrepreneur will be great at asking questions and finding fresh niches.

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5/12/2026 - Let's take the example of overtrading.  The common explanation for overtrading is that the trader has a fear of missing market moves (FOMO) and acts impulsively out of that fear.  That's certainly true for some developing traders, but it misses the larger picture of *why* the trader fears missing moves.

As described below, many traders pursue trading as their dream.  They pour their hearts into it; they pour their time into it.  Often, outside of trading, they don't have much of a career or personal life.  So how do they feel when the market is slow and they don't perceive opportunity?  How would they feel if they spent the whole day watching screens and not placing a single trade?

They would feel empty.

They would feel purposeless.

They wouldn't just feel like a failure as a trader; they would feel like a failure.  They would rather do something--place any trade--than feel that emptiness.  

That is why a rich and fulfilling life outside of trading is necessary to success as a trader.  If your life is a rich one, you'll never feel poor when you don't trade.

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5/11/2026 - The majority of people I have worked with in the trading world don't view trading as a job or even as a career.  They are pursuing it as part of a dream, like true entrepreneurs.  Their goal is not simply to make a living or make a good living.  They seek to build something significant by achieving a high level of success.

This is why, as noted below, the essence of trading psychology is not fear and greed.  Learning techniques to handle loss and pursue gain are necessary, but they don't address those situations in which the dream is threatened--or when it begins to flourish and needs to expand.

The idea of each trader developing a detailed business plan makes sense because such a plan is what translates the dream into concrete, day-to-day realities.  The plan also addresses situations in which the dream needs to be modified and ways of keeping the dream alive in the face of performance challenges.  

At a psychological level, the business plan allows traders to respond to challenges without overreacting to them.  It's not fear and greed that throws traders off course.  It's the grief and excitement that occur when our dreams are threatened--or when they play out unexpectedly quickly.  

The great challenge for the trader--as for the entrepreneur--is to face situations in which the dream is fading away and to learn from them and emerge with a fresh vision.  It is not unusual for an entrepreneur to start a few businesses and fold them before finding the right opportunity.  They face loss and grief--and they use those to cultivate fresh visions and dreams.

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5/10/2026 - What if the essence of trading psychology is not fear and greed?  What if handling those emotions is not what makes the best traders successful?  Asking new questions is what brings us to new perspectives and new answers.

Trading and investing are all about gain and loss and balancing those via the sizing of positions and prudent risk management.  Inevitably it occurs in a trader's career that, in pursuing gain and success, they experience significant loss.  One portfolio manager I worked with developed a new approach to investing and fell in love with the promise of the method.  When market conditions changed dramatically, the new approach could not keep up and adapt.  The manager went through a potentially career-ending loss.  But it wasn't the financial loss that was so difficult; it was the loss of something cherished:  a dream.

Many of the most challenging problems traders face is not simply fear or greed, but the emotional impact of loss and gain.  What brings many traders to their craft is also what brings many people to a significant romantic relationship:  a dream.  How do we respond when that dream changes?  When it is lost?  How do our responses to loss impact our subsequent trading?  Our lives?  Our future ability to dream?

I'm currently reading How Children Grieve by Dr. Corinne Masur.  A core idea in that text is that how we are impacted by loss is a function of the stage of life that we're in.  Loss and grief are different for a child than for an older adult who loses their spouse, for example.  Similarly, the beginning trader is impacted by loss differently from the experienced one.  New attachments impact us as well...and those impacts differ for people at various phases of life.

What we lose and what we gain impact us emotionally.  A healthy psychology knows how to grieve--and how to celebrate.  When we fail to deal with the emotions of loss and gain, our subsequent actions become distorted by what we don't process.  A beautiful way to deal with loss is to more deeply attach to everything and everyone important to us that we haven't lost.  In life as in finance, a rich and deep portfolio helps buffer us from traumatic losses.  The deeper our love, the greater the grief we will experience in times of loss.  It is the passion we feel, not the need and greed, that leaves us vulnerable to loss and open to the fulfillment of gain.  

How To Become Your Own Trading Coach

 

5/8/2026 - My dream for a next book is to go on the inside at one of the professional money management firms where I work and show, through detailed example, how the successful traders research markets, generate ideas, express their ideas as trades, combine the trades to achieve diversification, and manage the risk and reward.  Out of that would come very specific best practices that individual traders could use to anchor their self-coaching efforts at development.

Of course, no trading firms are eager to give away their secret sauces, so that is why those inside looks are quite rare.  It's great to have interviews with successful traders; even greater to see them in action and adopt them as role models.  How successful professionals coach themselves can become inspirations and roadmaps for how we can guide our own development.

Show me a successful sports team and I'll show you a successful coach.  Show me a successful performing artist and I'll show you mentors and a long process of mentoring.  The trading world is in need of mentors and role models--not influencers and vendors hawking their market calls.  That is why the Market Wizards books are so popular:  real traders offering insights into their exemplary success.  The next step is an ongoing process of market wizardry that can inform and inspire our work on ourselves.  

Stay tuned...

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5/7/2026 - The solution focused approach to coaching that I describe in my books is perhaps the most relevant to our efforts at self-coaching.  Solution work stands the change process on its head.  The usual approach is to examine our problem patterns and make efforts to interrupt and change those.  In the solution approach, we carefully analyze occasions when our problems *aren't* occurring and we see what those have in common.

The big idea is that, when our problem patterns aren't happening, it's because we're doing something right!  When we're not allowing emotions to drive our trading reactively, perhaps that is when we're at our best in preparing trading and staying focused.  If we can figure out how we do that, we create a repeatable solution.

We may feel dysfunctional and damaged, but at times we're already that person we wish to become.  A good coach keeps your strengths clearly in your sight so that you can be more and more consistently your best.  A real time journal, like the one mentioned yesterday but focused on what you do right, can be a powerful tool for becoming your best trader--and your best self!

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5/6/2026 - My favorite cognitive technique for self-coaching is keeping a real time journal of one's thoughts and feelings.  The idea is to recognize when you are feeling anxious, greedy, discouraged, distracted, frustrated, etc. and quickly back away from the situation and fill out a journal entry.  Notice that this by itself encourages you to be the observer of your experience and not someone who is caught up in that experience.  The very act of stepping back from a situation and putting it into perspective strengthens the part of you that is *not* caught up in the problematic trading.

The classic cognitive journal entry works with a sheet divided into four columns.  Column A stands for "activating event" and summarizes what has gone on that is associated with your emotion.  Column B stands for "belief" and it's what you're telling yourself about what has just gone on in the market.  Column C stands for "consequence" and it's identifying how your belief is making you feel.  Column D stands for "disputation" and is your challenge of the negative belief and your effort to respond to the situation more constructively.  

If you do this multiple times per day, you can become very good--and very quick--at recognizing negative thought patterns as they arise, challenging them, and then replacing them with a more constructive outlook.  Eventually you internalize the journaling and can go through the exercise in your head in real time.

The goal is to become very good at "thinking about your thinking":  standing apart from automatic thoughts and replacing them with more realistic alternatives.  If you do this consistently, every day for a month, you'll find that you maintain a constructive perspective far more regularly.

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5/5/2026 - Again and again I hear from successful traders that a large portion of their annual profits comes from a relative handful of trades.  Lots of trades make a little or lose a little, but very few lose a lot, and a few are big winners.  When we explore those big winners, it's apparent that they typically start as good opportunities but at some point show up as great opportunities.  That's what allows the trader to get large in the trade and ride it for significant profit.

This is hugely important to our self-coaching.  If we're busy trying to avoid losses, we'll never get the confidence to go after the meaningful wins.  That occurs in relationships, and it occurs in trading.  At some point, "yeah!" becomes "hell, yeah!", and we go for it.  The idea that great traders avoid emotion during trading is nowhere near correct.  The great traders are entrepreneurs.  They love to build; they are excited by opportunity.  Yes, they manage risk well, but they also go for big success.

What is fascinating for me as a psychologist, is that the big, "hell, yeah!" trades often do not start that way.  They are good ideas, executed with good risk/reward, but they show promise pretty much from the start.  When everything lines up, the trader is inspired to go for it.  Their self-coaching is not just about managing risk, but pursuing unusual opportunity.  They are always asking of their good trades, "What do I need to see to make this a great trade?"

It's an opportunity mindset:  an entrepreneurial mindset.  It's hard to reach for the horizon when we're looking down and making sure we don't stumble.

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5/4/2026 - Too many traders focus on what is setting up as opportunities in markets rather than whether *they* are set up to properly trade opportunities.  Notice that when cruise ships set forth for a transoceanic voyage; when airplanes prepare for a cross-country flight; and when racecar teams are getting ready for events like the Indy 500, there is always an extensive check of systems.  You don't cross the ocean, get in the air, or approach the starting line without having made sure everything is in good working order or else there could be a disaster.  Similarly, traders need their own "pre-flight checklist" to ensure that they are ready to trade.  Some of what needs to be checked is whether the idea has been properly researched and whether rules of entry/exit are in place and some of what needs to be checked is the mindset of the trader:  concentration/focus, energy level, mood, etc.

Maintaining a regular routine of monitoring and renewing your psychology allows you to avoid the pitfalls of poor preparation.  So many times traders are afraid of missing opportunity and put on trades before they're properly planned and focused.  I am willing to bet that, for most traders, P/L would improve significantly if they placed fewer trades and only traded when they were "in the zone".  

The coaching that really matters is the self-coaching that occurs during the trading day.

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5/3/2026 - The most basic technique for changing our trading psychology is to recognize when our concentration has been disrupted by distraction, frustration, or excitement.  In a state of optimal focus and concentration, we are most able to process what markets are doing and implement our trading plans.  Distraction leads us to act impulsively and reactively, leading to suboptimal decisions.

Notice that the solution to anxious and upset feelings is not simply relaxation, taking breaks, or attempts at positive self-talk.  Rather, we want to replace distraction and frustration with calm focus.  This typically requires that we temporarily remove ourselves from screens and control our thinking and breathing.  Meditation skills are very helpful in this context.  By focusing on an image, slowing our breathing, and maintaining a very still posture, we shift the mind by altering the body.  By slowing down our heart rate, focusing our attention, and quieting our bodies, we literally shift gears and return to states of optimal decision making.

As I describe in the Positive Trading Psychology book, this is where brain wave biofeedback (neurofeedback) devices can be super useful.  These tell us in real time when we are in states of focus or distraction as well as states of calm or agitation.  If we practice meditation routines with the biofeedback, we can learn how to calm and focus ourselves on demand.  This becomes a great way to start the trading day, and it is a useful routine for breaks in trading.  

Indeed, if we can learn to focus on demand, this skill becomes helpful in a variety of life situations.  The idea is to respond to challenges in planned ways, not reactively.

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5/1/2026 - I'm in Syracuse, NY as I write this, getting ready to teach classes in short-term (brief) therapies to residents in psychiatry.  I've been on the faculty of SUNY Upstate Medical University since the mid-1980s and have long enjoyed teaching change techniques to psychology and psychiatry students.  In this series of posts, I'll teach a few of these techniques to you so that you can use them to help coach yourself to success.  You'll find more on this topic in the Daily Trading Coach book and in the book that just came out, Positive Trading Psychology.  

So let's start at the beginning and understand the nature of the problems we face.  These problems occur in many situations and they can take different forms, but typically they are part of an underlying pattern.  For instance, we may feel stress, anxiety, and fear in many different situations, but common to to all those experiences might be negative self-talk, where we catastrophize and anticipate the worst.  This can occur in relationships, in trading, at work, etc.  The goal of self-coaching is to understand the patterns that create our problems so that we can step back from those patterns and engage in new ways of thinking, feeling, and acting.

Very often, a key to identifying the patterns that are interfering with our trading is to recognize the thoughts and emotional experiences driving the patterns.  We might, for instance, overtrade in different situations and take large losses.  Driving this overtrading might be perfectionistic demands to participate in every market move and feelings of failure if a move occurs and we don't participate.  For some people, the overtrading might be driven from thoughts, feelings, and experiences of the past:  trying to make up for past life failures.

A technique from cognitive therapy is keeping a journal of all your negative thoughts, feelings, and actions during a trading day and identify what you're telling yourself on those occasions.  Many times, the patterns will jump out at you:  you'll see habit patterns of self-talk that lead to negative emotions and poor trading.  The first step in the change process is to recognize our problem patterns in real time.  Keeping a real time journal of our thoughts, feelings, and actions is a way of helping us recognize those problem patterns.  In coming posts, we'll explore techniques for changing the patterns we recognize.