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.
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