How To Overcome Trading On Tilt

Are you the pilot of your trading, or do markets take you for a ride?

When we go on tilt, we are no longer the pilot.  Our emotions--particularly frustration--get the better of us.  That leads to decisions and actions that we would *never* take in our normal mindset.

That is a key recognition:  Being on tilt--trading out of control--is triggered by our emotional state.  We cannot overcome this problem simply by telling ourselves to be more disciplined, etc.  We need to be able to reprogram our emotional states in real time.

Here's how to do that:

As a first step, please review the most recent Forbes article.  It describes exactly how we can make lasting changes in our thoughts, emotions, and actions, according to psychological research.  What I will explain below will make a lot more sense if you have the background from that article.

To change your state of frustration--or prevent such a state from occurring in the first place--you need to enter a state of mind and body that is incompatible with frustration. 

So what we do, beginning with practice outside of trading hours, is rehearse a simple relaxation strategy in which we close our eyes, sit very still, listen to peaceful and relaxing music, and slow down and deepen our breathing.  The idea is to focus entirely on the music and breathe slowly and deeply for at least 5 to 10 minutes--until you get yourself into a focused zone.  In the beginning, it may take more time than that.  No problem.  As you practice this exercise (I recommend practice at least twice daily), you will become quite good at getting into your zone.  Eventually, it will only take a matter of seconds for you to close your eyes, adjust your breathing, imagine the music and get yourself calm.

It takes practice, but is very doable.

Once you've gotten the knack of entering your zone, you then want to take a step-by-step, gradual approach to change as the article describes.  You do this by returning to your relaxation exercise, but now while imagining very mildly frustrating trading events.  Perhaps you're imagining getting a price that's not so good or getting out of a portion of your trade a bit too soon.  While you vividly imagine these mildly frustrating events, you're keeping yourself calm and focused with the breathing and the music in the background.  You keep doing the relaxation work until the frustrating scenarios no longer lead to any sense of frustration.  Again, this takes some repetition.

Once you've extinguished the frustration for the mild scenarios, you then create more moderately frustrating ones to rehearse in the same way.  Perhaps you'll imagine missing an opportunity or entering your position incorrectly and losing some money.  Again, you visualize such scenarios vividly while doing your deep breathing and while immersing yourself in the music.  You repeat this until these moderately frustrating situations no longer affect you.

Finally, you'll continue the mental rehearsals but now using very frustrating situations to walk yourself through while listening to the music and keeping your breathing deep and slow.  For example, you might imagine getting stopped out on the day or having a winning trade reverse against you and cause a loss.  Just as before, you keep yourself in your zone while vividly imagining the frustrating scenarios until they no longer evoke any upset.

At that point, you can take your exercises to real time.  While you are trading, you play the music in the background.  The music has been associated with your calm, focused state through the process of anchoring, as explained in the article.  Once you start feeling even a bit frustrated during the trading day, you immediately close your eyes briefly and do your deep breathing.  That places you in a state of mind and body that is incompatible with frustration and the tilt that results.  

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For a different exercise that can be used in a similar reprogramming way using your visual field rather than the breathing, check out this article, which was brought to my attention by the ever-alert Tadas Viskanta of Abnormal Returns.  In this case, the visual shift helps place us in a state incompatible with tilt.   

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Quite literally, you've retrained your emotional response patterns so that you don't go on tilt when frustrating events occur (as they do for all of us!).

It's all about the practice, repetition, and positive habit-building that make you the pilot and put you in control.  All the writing in journals and reading of superficial tweets about discipline and planning will not reprogram your mind and body.  We can change, but not by doing the same old things and staying locked in our same old states of mind and body!

Further Reading:

How to Make Life Changes

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A Powerful Technique for Changing Your Trading Psychology

In the last post, we took a look at four patterns that commonly show up when traders experience emotional challenges to their trading.  The underlying drivers of these patterns are frustration (over losses or missed trades), distorted thinking (overly optimistic/pessimistic following wins/losses), and anxiety (over possibilities of losing money or failing to make money).  Once those triggers are activated and we become frustrated, overconfident, negative, or fearful, it's easy for those states to color our views of markets and our next decisions and actions.

So how can we prevent cognitive and emotional triggers from sabotaging our trading?

My favorite approach addresses prevention rather than care:  not allowing state shifts to shift our trading processes.

The approach begins with acceptance.  We are not going to eliminate frustration, uncertainty, or mood swings.  Trading operates in an environment of uncertainty and risk.  That will elicit unwanted thoughts and emotions at times.  It's OK to be human and to have human feelings.  It's going to happen.

Once we accept that these patterns will crop up, we can then actively anticipate them.  Instead of putting them out of our minds, we want to make them our focus.

Once we're in that state of acceptance, we want to make use of a straightforward, but powerful stress management routine.  We listen to peaceful, relaxing music; close our eyes; slow and deepen our breathing; and sit very still while slowing down and focusing on the music.  We use the breathing to bring our body's level of arousal down, and we use the close listening to the music to intensify our cognitive focus.  Through this routine, we keep ourselves out of the "flight or fight" mode of stress and into a mode of peaceful alertness.

The stress management routine requires some practice, so we want to repeat the exercise a few times a day for several days to become good at reaching that peaceful alert state.  With practice, we can focus ourselves and get ourselves out of fight or flight mode on demand.

Then, once we've become good at the stress management, we do the exercise with the music and deep breathing, but now we add imagery.  We imagine the challenging market situations that normally trigger our frustration, distorted thinking, anxiety, etc.  In other words, while we're playing the music and breathing slowly, we're vividly walking ourselves through situations where we miss a trade, lose money, go into drawdown, trade poorly, etc.  While you're imagining those situations, you want to actually imagine and *feel* those emotional responses that have sabotaged your trading in the past:  you want to feel the fear or greed or frustration.

But you're now experiencing those emotions while you are in control, focused and relaxed.  You keep focusing on those situations and emotions until you can stay in your calm, focused zone.  

This is an exercise you'll want to do every day before the start of trading and perhaps also during midday breaks.  The repetition allows you to actively face emotional challenges while staying in control.  Through repeated experience, we reprogram our negative patterns of thought and emotion.  We experience them, but they no longer define or control us. 

Once we've achieved a level of acceptance and self-control, we then add a final component to our imagery work:  we vividly imagine the problem scenarios and our negative emotional and cognitive reactions to those, but now we also vividly walk ourselves through how we would like to deal with those reactions.  So, for example, we might imagine missing a trade and feeling frustration and thinking how stupid we are and then visualize ourselves stepping back from the screen temporarily, doing some deep breathing, and coaching ourselves in a more constructive mode, telling ourselves that it's OK to miss something, that opportunities will continue to arise, that the important thing is to stay focused for future opportunity, etc.

All of this mental rehearsal is also done while we're breathing deeply and slowly and listening to the relaxing music while seated in a still position.  So through repeated mental rehearsal, we're imagining situations that upset us--and we're practicing ways of thinking and behaving to handle those situations constructively.

The repeated mental rehearsal builds new habit patterns for us.  As we build those new habits, we can then experience frustrating and discouraging situations in our trading, take a few deep breaths, and engage in the constructive self-talk and actions that we've been rehearsing.  The visualization exercises act as practice, so that we are more prepared to sustain control during actual trading.

Over time, this accomplishes prevention.  We still experience losses, we still have frustrating experiences, we still feel giddy at times, but now we have a set of tools for staying calm, staying focused, and staying in control by responding to these challenges in the ways we've practiced.  Once we accept that emotional and cognitive overreactions will occur, it becomes easier to anticipate them and deal with them effectively.

Further Reading:  Performance Anxiety in Trading as a Cause of Discipline Lapse

For those looking to go into greater depth into related topics, The Daily Trading Coach book contains a cookbook of psychological techniques for traders.  The Trading Psychology 2.0 book contains strategies for enhancing positive emotional experiences as a way to buffer trading stresses.
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The Most Important Psychological Skill for Traders - Part Two

My last post explained how psychological disruptions of trading are linked to state shifts that manifest themselves emotionally, cognitively, and physiologically. Very often these shifts involve states of heightened arousal due to frustration, fear, and anger. The previous post explained how these states can be defused by combining focused concentration with deepened, slowed breathing. With consistent practice, traders can become quite adept at calming their minds and bodies and interrupting processes that interfere with good decision making.

A related skill that I describe in The Psychology of Trading is "taking your emotional temperature." This simply means that you periodically stand outside yourself as an observer and notice your thoughts, feelings, and physical state. By making this self-observation a regular practice, you can become skilled at catching state shifts as they are occurring. This enables you to utilize the focusing and breathing exercises proactively, before emotional triggers can disrupt trading decisions.

Such a proactive use of the focus and breathing is especially effective when combined with cognitive techniques. Here's how to do it:

First off, I recommend that anyone trying these methods reduce their trading size significantly. By taking P/L off the table temporarily, it allows you to focus on developing your self-control. Then, with your success in the exercises, you can gradually build back to a normal trading size. (Note that if reducing your trading size by itself eliminates your emotional disruptions, that in itself may be your problem: you may be trading too large for your account size and your personal risk tolerance.)

Second, before adding cognitive components, it's necessary to truly master the focusing and breathing from the previous post. I generally have people practicing those methods at least twice a day for a full week before adding new components. The goal is to be able to calm yourself significantly with just a focused mind and a few deep, slow breaths. This takes consistent practice.

Once you can focus and relax yourself on demand, you're ready to add a cognitive module to your self-mentoring. Before you start trading, sit comfortably and vividly imagine market situations that would normally lead you to become fearful or frustrated. For example, you can "play a movie in your head" of the market moving against you and hitting your stop-loss point. The key is imagining the market action and your stop in vivid detail--while you are doing your deep, slow breathing. Then continue your "movie" by vividly imagining yourself taking the right course of action in that situation. Imagine how you would talk to yourself in that situation and what actions you'd take in the market--again, all the while keeping yourself calm and focused, breathing deeply and slowly.

You may need to repeat your "movies" several times with variations. In all, I recommend spending at least 15 minutes with this exercise prior to the market open. What you're doing is literally training yourself to stay calm and focused (and to do the right things) in situations that used to take you out of your game. By repeating these situations in your head many, many times, you normalize them (and your response to them) and make them familiar and non-threatening. Facing a situation again and again successfully in your mind prepares you to do the right things when those situations actually occur.

Notice that this method will work, not only for trading problems, but any situation that tends to trigger you and lead to unwanted reactions. Mental rehearsals under conditions of self control are a method for extending our free will, our ability to respond to events as we wish. This is not only helpful in trading, but in all of life.

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Behavioral Techniques for Mastering Your Trading Psychology: Relaxation

A recent blog post outlined the process of diagnosing the problems that may be leading to drawdowns and poor performance.  This post will be part of a series for the forthcoming trading psychology online encyclopedia on the specific approaches and techniques for addressing those problems when psychology is at their root.  

Behavioral approaches to the change process involve skills building and especially the formation of new, constructive habit patterns.  When we engage in behavioral methods, we are literally teaching ourselves new action patterns: replacing problem patterns with new, effective ones.

The first behavioral method that I have found to be helpful for trading problems is relaxation training. In relaxation training, you teach yourself skills to calm both mind and body.  My favorite relaxation exercise is to listen to absorbing music--I find instrumental music preferable to music with lyrics--while controlling the rate and depth of your breathing.  You perform this exercise seated in a comfortable position and in a quiet environment, free of distraction.  While focusing on the music, you breathe deeply and slowly from the diaphragm, but not in a strained or exaggerated way.  If you notice your mind wander, you simply refocus on the music, perhaps following a melody line or beat from a specific instrument.  During this time, you stay very still and make your breathing increasingly deep and slow.

It usually takes 15+ minutes for beginners to get themselves "in the zone" with the deep breathing and focus.  As you practice (mornings and evenings are great times for practice), you will find yourself quicker and quicker at entering the calm, focused mode.  It's not unusual for a trader experienced in relaxation methods to completely center themselves with just a few deep breaths.  My experience is that the longer the relaxation session, the deeper the state you can enter.  Sticking with the exercise for 30+ minutes can induce a very focused and clear state of awareness.

A variant of this relaxation method is known as "progressive muscle relaxation."  In this method, you start at one end of your body (your toes, for example) and--while listening to music and slowing and deepening your breathing--you slowly tense and relax those muscles.  So you might curl your toes gradually and tightly and slowly release them.  Once you've done that, you work your way up the body, lifting and releasing your feet, then tightening and releasing your calf muscles, etc.  Eventually you work your way to your head and tensing and relaxing your brow and forehead.  All of this typically takes 15+ minutes.

The progressive muscle relaxation works for two reasons.  It calms and focuses you, but it also turns your conscious awareness to your body and away from day-to-day and trading stresses.  This "gearshift"--the alteration of your state of consciousness--is common to all the major approaches to counseling and psychotherapy.  It's a very important principle: to change a behavior, you first have to shift your state.  Learning a new skill in a new state accelerates the process of internalizing that skill.

The key to success with relaxation methods is practice, practice, practice.  It's like any skill: mastery comes from repetition.

Relaxation methods are valuable as preventive tools.  You can practice getting "in the zone" before you start trading and during breaks in the trading day to ensure that you avoid overconfidence, frustration, and discouragement.  It is difficult to get worked up if mind and body are greatly slowed down.  Doing the muscle relaxation midday is a great way to get into your body and return to markets in a fresh state.

Relaxation methods are also valuable tools when you catch yourself overtrading or anxious and avoiding opportunities.  By temporarily pulling back from the screens, you can center yourself relatively quickly and return to markets far more calm and focused.  I often find myself regulating my breathing during trading, thereby sustaining the state practiced in the relaxation exercises.

Relaxation techniques are a first building block for other, more detailed behavioral skills and so they're a great place to start your skills building.  For more detail on relaxation and other behavioral methods, you can check out the behavioral chapter in The Daily Trading Coach.  In the next post in this series, I will illustrate how relaxation methods can be combined with self-hypnotic suggestion for targeted behavioral change.

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Biofeedback for Traders: A Simple Application

My recent post discussed using biofeedback as a self-control strategy. In this follow-up, I'll outline how I use biofeedback, both in my own trading and in my work with traders.

The program I've been using most recently has been the emWave system for tracking heart rate and heart rate variability. For more on the topic of heart rate variability, please see this post. See also this post on hemoencephalography, which is biofeedback that makes use of different data, based on blood flow patterns in the brain. If you are new to the topic of biofeedback, check out this introductory article.

Basically, biofeedback is a system that monitors and provides you with real time information about your body's level of arousal. There are biofeedback systems for brain waves, skin conductance, muscle tension, heart rate, and much more. The idea behind biofeedback is that you can learn strategies that will moderate your level of arousal, which in turn reduces your stress levels. If you are focused and relaxed cognitively and physically, it is difficult to be stressed out.

A simple routine that can help traders is to keep your body in a very steady, stable state for 10-15 minutes, reducing all forms of arousal. The way you do this is:

1) Fix your attention on something specific, so that your mind doesn't wander (music, a picture across the room);

2) Keep yourself completely physically still, with muscles relaxed;

3) Keep yourself in an environment insulated from outside noise and distraction (noise cancelling headphones are good for this);

4) Regulate your breathing by breathing quite deeply from the diaphragm and by breathing very slowly.

By staying in this mode for an extended time, you can enter a quasi-trance state. (See Chapter Nine of The Psychology of Trading for details on "tranceforming the mindscape"). In this state, you have enhanced attention and concentration, combined with enhanced relaxation. The combination of focus and reduced arousal is the entry point into "the zone"; it shows up in the heart rate variability feedback as regular sine-wave rhythms.

Because the biofeedback unit shows you when you're in those rhythms and when you're not, you can tweak your breathing and attention to improve your time in the zone. With sustained practice, you become quite adept at entering that zone. The benefits are substantial, not only in terms of reducing stress, but also in terms of enhancing your focus on markets.

For more, see the posts below:

Overcoming Stress and Anxiety in Trading

How I Use Biofeedback

Peak Performance and Performing in the Zone

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Best Practices in Trading: Self-Control Routines During Trading Hours

During market hours, it can become easy to so focus on trading that we neglect the person who is doing the trading!  Once we lose self-awareness, we can make decisions that we would never make if we were calm and focused.  Self-control is easy when we are not facing stressful situations and dealing with fight-or-flight responses.  During periods of emotional, cognitive, and physiological arousal, however, our state shifts can take us very far from our initial planning.  That is why self-control strategies that can be employed during trading hours are a best practice.

Today's self-control methods are illustrated by reader Gus Joury, a short-term trader of crude oil futures.  Here are some of the daily practices that aid his trading:

"1.  I start my day with 15-20 minutes of meditation/mindfulness.  I practice breathing meditation and or TM to clear my mind and keep me focused and aware of my emotions before I start trading.  During this time, I use the inner balance app with a heart rate variability monitor to measure my performance for that session and I record my score.

2.  I go over my checklist to make sure I had a good night's sleep, protein breakfast, and workout.  I also rate my physical condition, distraction level, and overall emotional and mental state for trading.  

3.  Before I start trading, I look at market conditions and rhythms at different time frames to try to evaluate whether the market is tradable, whether it is trending or choppy, etc.  This helps me decide which tools and setups to use and whether it is worth trading or not.

4.  I start my first trade with small size (1-2 contracts) to test the waters and see if I am in tune with the market and to get a feel for the overall market environment.

5.  Once I start with a winning trade, I start increasing my size in the following trade by adding to the winners.  I like to start small and if the market goes in my direction, I add to my position using buy/sell stops and then scale out at the first target and second target and then trail my last position with one tick below/above the previous bar low/high to maximize my profits in the trade after having pocketed earlier profits.  This strategy makes me less anxious to take profits and helps me hold my position longer with a trailing stop.  It gives me good risk management and allows my winners to be much larger than losers.

6.  During my trade, if I experience any anxiety or discomfort, I take deep breaths in and out in order to maintain my focus and stick to my plan.  

7.  After closing my trade, if I feel any anxiety, regret, or discomfort, I take a breathing session break for 5-15 minutes until I clear my mind and refocus.  I also do some EFT tapping (emotional freedom techniques) with breathing to release negative energy.  I sometimes take a break by walking out of the trading office.

8.  Once I hit my daily stop loss, I stop trading.  I also stop trading if I lose 50-75% of intraday profits." 

Notice how Gus combines methods for physical and emotional control, such as the breathing, with methods of money management.  He attempts to stay in winning trades, exit losing trades with smallest size, and regulate the losses he can incur on any given trading day.  All of these are methods of self-control, and all of them help him stay focused on markets rather than focused on P/L.  

Money management is an essential part of self management in trading.  As I've mentioned in my books, I never want to lose so much money in a day that I cannot have a profitable week; I never want to lose so much in a week that I cannot come back for the month; and I never want a losing month to ensure a losing year.  A major aid to optimism and positivity is ensuring that you always have enough dry powder to mount a comeback after a loss.

Further Reading:  Self Control and Working Memory
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Becoming the Play-Actor of Your Ideals

I was sitting in a waiting room reading a popular magazine, when I came across an interesting quote from actor/director Mel Gibson. The interviewer pointed out that many of the actors in his latest film, Apocalypto, had no acting experience. Was it difficult, the interviewer asked, to work with them as a director?

Gibson's response was that it wasn't all that hard. To teach someone to act, he insisted, what you need to do is show them how to breathe the emotions they are trying to portray. If actors can shift their breathing, Gibson implied, they can enter into the emotional states demanded by their roles.

To be sure, I haven't agreed with all of Gibson's comments of late, but this one struck me as particularly perceptive. There are approaches to short-term therapy that purposely increase a client's anxiety, by confronting patterns of avoidance, resistance to change, and defensiveness. Under conditions of heightened emotion--particularly anxiety--individuals gain access to memories, insights, and perspectives that they didn't have when they first walked in the door. By shifting a person's state of mind and body, the psychologist also shifts their awareness.

Think about the phenomenon of test anxiety. A student can study hard for a test and know the material cold. Under conditions of performance anxiety, the student tenses up. Muscle tension increases, negative thoughts intrude, and breathing becomes more shallow. In Gibson's terms, the student is literally enacting a panicked mode by adopting the mindset and physical state of the anxious person. Once the state has shifted, the student no longer has access to what he or she already knows.

This illustrates that the state we're in either facilitates or blocks access to what we know. Stated otherwise, what we know is relative to the state we're in. Without realizing it, we are like actors, altering our breathing, our posture, our movement patterns, and our thought processes to create a convincing enactment. Actors and actresses, however, shift their states intentionally to generate their portrayals. When we shift states, it is most often without our conscious awareness.

I submit that access to our implicit knowledge about markets and trading patterns is mediated by the states we're in during our decision making. If our bodies are relatively immobile, our breathing is shallow, and our thoughts are worried, we are hardly creating the conditions by which we would normally experience ourselves as powerful, confident, and controlled. We fail because, unwittingly, we enact the role of the ineffective individual.

What if we tracked the states of mind and body that we're in when we're trading effectively and then consciously made efforts to access those states through the trading day? What if we followed Gibson's dictum and enacted the mental and physical processes associated with success? Quite a while ago, a social psychologist named Kelly invented a therapy in which he encouraged people to act out their ideals: to play-act the person they wanted to be. He even had them make up a name, personality, and history of the role that they were to portray.

What he found was that, as people played out their ideal roles, they began to get positive feedback. This, in turn, encouraged them to continue the role enactments, which in turn provided more good feedback. After a while, the roles became more natural: Kelly's clients internalized the roles that they were playing.

We often think that we have to change ourselves internally (our thoughts and feelings) in order to change our behavior. But what if we adopted very different behavior and *then* generated new sets of thoughts, feelings, and experiences? What if, to paraphrase Nietzsche, we became the play-actors of our ideals--and thereby moved closer to those ideals?

For those who have developed trading skills, perhaps success is just a matter of finding the mental, physical, and emotional state in which access to those skills can be maximized. There is much room for self-experimentation for traders inclined to work on themselves.

Cognitive Behavioral Techniques for Changing Your Trading Psychology - Part Two: Overcoming FOMO

In the first post of this three part series, we looked at specific techniques traders can employ to overcome procrastination.  These methods, backed by significant research, can very much help traders approach their work in a more decisive, positive mind frame.

One of the most commonly recognized trading psychology challenges, especially for developing traders, is a fear of missing out on possible opportunity.  That FOMO leads to overtrading, as the fear of missing leads to the taking of marginal trades.  In the work I'm doing with Mike Bellafiore at SMB, combining mentoring and psychological coaching, we have the traders enter all of their trades into a platform that automatically calculates a wealth of statistics:  number of long and short trades taken; number of winning and losing trades; average sizes of winning and losing trades; winning percentage and P/L as a function of time of day; as a function of relative volume; etc.  A common pattern is that win percentage goes down when the number of trades placed increases.  This is often because the additional trades are made from a FOMO mindset.

In the previous post, we looked at Dr. Seth Gillihan's recent self-help book on cognitive behavioral techniques and how those can help with patterns of thought and behavior.  The FOMO mindset is grounded in that F word:  fear.  Techniques that help people with fear and anxiety can be tremendously helpful in overcoming the overtrading that arises from concern over missing trade opportunities.  Here are three especially useful techniques traders can employ on their own:

1)  Mindfulness - Dr. Gillihan points out that our breathing tends to mirror our anxiety when we're getting worked up.  By becoming aware of our breathing, slowing it down, and deepening it, we can place ourselves in a much more calm and focused mindset.  He recommends doing an exercise in which we a) breathe in gently for a count of two; b) breathe out slowly for a count of five; c) pause after exhaling for a count of three; and d) repeat this process for 5-10 minutes.  Notice how this creates a rhythm for your mind and body that counteracts the chaos of anxiety.  What I have found is that if you practice such an exercise daily, you can become proficient in the method and then can just take a few even breaths during trading to re-center yourself.  The focus on breathing keeps you grounded in the present and builds your self-awareness, so that you're less likely to act on impulse.

2)  Reassess the Severity of the Threat - Many times, we get worked up about something that we tell ourselves is a threat, but that actually can do us little harm.  One way of reassessing that I have found to be very helpful is actively telling myself that *of course* I'm going to miss opportunity.  I miss opportunity in every market I don't trade and in every time period (such as overnight) that I don't trade.  No matter how many opportunities I miss, ones always end up appearing later in the day or the next day.  The goal is not to trade every possible opportunity, but to identify the best opportunities and trade those as well as possible.  By reframing the opportunity set and taking the threat out of missing something, I can eliminate FOMO as a motivation.

3)  Directing Attention Outward - Dr. Gillihan observes that, when we become fearful, we tend to dwell on worries.  By directing our attention outward, we can break the vicious cycle of worrying, getting anxious, leading to further worrying.  In trading, the outward focus can be a doubling down on one's trading process and rules.  When we have our trading laid out in "playbook" form, with explicit rules, we can ground our decision making in what we do best.  This helps us reframe the fear of missing a move into a fear of trading poorly.  Notice how this approach helps to transform fear into actual opportunity.  Very often, the outward focus leads us to hold off on placing the FOMO trade, helping us find better opportunities to enter and exit.

My experience in trading is that, if I'm feeling FOMO, the odds are good that others are experiencing it as well.  The trade that seems obvious is often not the high percentage trade.  Using FOMO as information that actually makes the trade *less* attractive is a great example of how we can use emotional awareness as a tool for superior decision-making.

Further Reading:  Why FOMO Fails

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My Favorite Techniques for Overcoming Performance Anxiety in Trading

A little while back I made the observation that performance anxiety is the most common psychological problem that I encounter among traders. It occurs in many forms--during slumps, at times when traders attempt to raise their size/risk, when life's financial needs add pressure to trading outcomes--but the common element is that a concern with the results of trading interferes with the process of trading itself.

I thought that both the comments of readers and their emailed suggestions offered very useful ideas regarding the handling of performance pressures in trading. In this post, I'll add two suggestions of my own.

* Self-hypnosis - This builds on the ideas from my first trading book, The Psychology of Trading. When a trader is responding to a trading situation with anxiety, I ask the trader to close his eyes, breathe deeply and slowly, fix his attention on a musical selection, and hold his hands in front of him with palms facing each other a couple feet apart. The music, taken from Philip Glass' early works, has a highly repetitive structure and serves as an object of focus. After an extended period of the slow, rhythmical breathing and focus on the music, I then suggest to the trader to imagine that there is a magnet between his hands, pulling them slowly and steadily together. As his hands are drawn closer and closer, I suggest, he will find himself feeling more and more relaxed, calm, and confident. The exercise is brought to a close when the palms finally touch. Altogether the exercise lasts at least 15 minutes.

The exercise becomes a self-hypnosis routine when traders give themselves suggestions during the time that the hands are moving together. For example, they might suggest to themselves (internally or even via a self-made audio tape) that, as their hands move together, they will feel increasingly accepting of a recent loss and able to put it behind them. The key is to enter a highly focused and relaxed state prior to the self-suggestions and to perform the exercise thoroughly and regularly on a daily basis. Over time, traders find it easier to enter the focused state of relaxation and invoke their own suggestions. Eventually it's possible to get back to that state (and activate the suggestions) by merely taking a couple of deep breaths and bringing one's hands together. This makes the technique very practical for real-time trading situations, when all you have time for is perhaps a few deep breaths and a simple gesture. Repetition is essential to such mastery.

* Reprogramming Anxiety Through Biofeedback - Regular readers know that I consider biofeedback to be a best practice in trading, with broad application to a variety of emotional situations that affect performance. Of late, I've been making use of heart rate variability feedback through the Freeze-Framer program, which offers a nice graphical interface to help users track their progress and visually determine whether or not they're in "the zone". In the first step of biofeedback training, I simply teach traders how to enter the zone, as above, by regulating their breathing and sustaining a tight cognitive focus. This, by itself, is a very useful skill that can serve as a preventive measure regarding performance stress.

Once the trader becomes adept at this, I then add a second component to the exercise: The trader must vividly visualize a mildly anxiety-producing trading situation while hooked up to the biofeedback and maintaining the calm focus. Once the trader can repeatedly visualize this low-anxiety situation and sustain "the zone" on the biofeedback readout, we then move to a second, higher-level anxiety scenario. Often it's helpful to vividly imagine variations of the same scenario in separate biofeedback sessions. Eventually we move to the most anxiety-producing situations, repeating them over and over in variations, until the trader can sustain the calm focus even in the worst case scenarios. The added benefit of this method is that it teaches traders what they need to do to get their minds and bodies under control. This awareness can then filter down to real time, when all the trader needs to do is focus attention and regulate breathing during stressful market periods. A variation of the biofeedback work that is quite effective involves practicing constructive self-talk while staying in the zone.

Notice that both of these methods involve shifting one's state--physically, cognitively, and emotionally--as a way of dealing with performance pressure. By enhancing our control over our states, we can place ourselves in modes of thinking and feeling that are incompatible with performance anxiety. My experience is that traders can learn this competency on their own or with only a minimum of coaching intervention. With steady practice, one develops a degree of self-mastery that carries over to other areas of life. I believe I'm much more able to deal with life's various stresses as a result of what I've learned from managing my trades--and my reactions to those trades!

Thursday's Blog Links, Pivot Levels, and Market Views Posted Prior to the Open

A Powerful Workout Routine for Traders and Its Hidden Benefit

The recent post took a look at working on the body to sharpen the mind.  The speed exercise routine I described consists of five minutes of stretching (working down the body starting with neck and arms and progressing to shoulders, back, and legs); ten minutes of weight lifting (working neck/shoulders, arms/chest, stomach, and legs); and fifteen minutes of jogging on the treadmill (at target heart rate).  What makes it a speed routine is that there is minimal break between the activities.  It's meant to be a fast-paced body tune up to start the day, not a full conditioning program.  If you recall the post on using constraints to bolster creativity, then you can see that the half-hour limit is a constraint that pushes us to use the time in the most energy-boosting, body-challenging way possible.

Can we pack even more into the half-hour constraint?  Can we design a workout for mind as well as body?  As I discuss in my upcoming book, it turns out that the answer is a resounding yes.

The key is found in yoga.  At its most basic, yoga consists of a series of poses that build strength and flexibility, while promoting healthy posture, breathing, and mindfulness.  Unlike traditional meditation, some forms of yoga are quite physically active and challenging, stimulating the body rather than quieting it.  Yoga has been found to promote both physical health, as well as reduce stress and promote well-being. 

Yoga illustrates that it is possible to work on mind at the same time that we work on body.  This is accomplished by keeping ourselves focused and mindful while we are working out vigorously.  Tracking our breathing during each workout phase is a simple way of accomplishing that.  In the most basic form of the speed routine above, you begin the session seated, keeping yourself completely still, breathing deeply and slowly.  With each inhalation, you recite to myself, "Energy In" and feel your body completely expand with the intake of air.  With each exhalation, you say to yourself, "Energy Out" and feel your body wholly relax with the release of the air.  

Once you are centered with this introductory exercise, you then begin the speed workout--already in a state of high mindfulness.  Throughout the stretching, lifting, and running, you are mindful of your breaths and keep yourself focused on "Energy In", "Energy Out".  Although the workout is quite vigorous and fast-paced, you'll find that your mindset stays very calm and focused throughout.  In 30 minutes, you have a routine for pushing your physical comfort zone, pumping up your energy, and building your capacity to stay in the zone.

But there is a hidden benefit as well.  I originally designed this routine to maximize the value of a workout to fit into a busy day.  What I found was that the combination of physical exertion and enhanced mindfulness is extremely effective in training us to stay mindful whenever our bodies are worked up.  During trading, you may become harried because of fast-moving markets; frustrated with a bad trade; or anxious about the possibility of loss.  In each case, your body enters an adrenaline-fueled flight or fight state.  If you have trained yourself--day after day--to stay mindful when your body is aroused, that capacity will come to you in the heat of battle.

In other words, when you train mind and body as part of a workout routine, you also train yourself to handle the workouts that markets give us.  That is a tremendous benefit that pays off when we are most vulnerable, enabling us to trade more mindfully and intentionally.

Further Reading:    Trading and Mindfulness
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Brief Therapy for the Mentally Well: Programming Our Own Experience

A bit over a week ago, I described short-term applications of psychology as "therapy for the mentally well". The goal of such work is to make positive changes, not necessarily eradicate pre-existing deficits. For that reason, the first step in the change process is having a vision of the changes you wish to make. By linking these positive changes to distinctive emotional, physical, and cognitive states, we are able to become the play-actors of our ideals.

Allow me to expand on a metaphor I used in the Psychology of Trading book. Consciousness is like a radio dial, and we operate on many frequencies. Each spot on the radio dial is a particular state: a blending of our experience of our bodies and minds. The test anxious student has a spot on their dial that combines negative thinking, increased arousal, shallow and rapid breathing, and diminished access to retained information. Other spots on the dial may combine much more positive thinking, alert concentration, erect posture, and fuller breathing. When operating at those frequencies, the student has full access to the information studied and performance on the test is excellent. What we know and who we are is relative to the frequencies of consciousness at which we're operating.

The problem is not that some of the spots on our personal radio dials are programmed with negativity. Rather, the problem is that we lack full, intentional control over the dial itself. We change stations, so to speak, without intending to. What the brief therapies accomplish is a greater control over selecting our own frequencies: they give us a hand to turn our dials. The idea, after all, is to become our own trading coach: to develop our own ability to reach our goals.

What creates the "radio stations" that make up our dial of consciousness? Two things: repeated experience that becomes habit patterns and powerful emotional experience that is processed as a trauma. Just as some radio stations on our car radio dials are faint and others generate a powerful signal, some of our states are weak and some dominate the dial. The more repeated the experience--and the more powerful the experience--the more it becomes part of your spectrum of consciousness.

As I emphasized in the Enhancing Trader Performance book, one reason so many traders fail is that they create repeated, negative emotional experiences for themselves. Indeed, this is why I included self-help manuals for cognitive and behavioral change techniques as two chapters within the book. Quite simply, traders can find themselves operating on frequencies that they don't want to be experiencing: their dials change without their consent or control. And all it takes to shift our frequencies of consciousness, very often, is a simple shift in one element of our frequency: a few negative thoughts, a change in our patterns of posture or breathing, a fleeting emotion. Those become triggers that diminish our control over our own experience.

While the aforementioned cognitive and behavioral techniques are extremely valuable, it is also important to be able to program our own new, enhanced spots on our dials of consciousness. The way to do this is to rehearse positive patterns of thought and behavior while you are in a distinctive emotional and physical state. This is one of the quickest and most reliable ways to generate change.

For instance, let's say your desired behavior is to hold onto winning trades longer. You might mentally rehearse market scenarios of holding onto trades--emphasizing how excited, happy, and profitable you'll be by achieving this goal--while you are pushing yourself during a strenuous treadmill exercise. By setting the treadmill at an incline and a good speed, you will be jogging at a brisk pace and elevating your heart rate. With repetition, you will begin to associate the goal--and its emotional benefits--with your body's pumped up state. It will become an increasingly powerful signal on your radio dial. Then, before trading and during trading breaks, all you have to do is get back on the treadmill. Triggering your body's shift in state will trigger the desired shift on your dial of consciousness. You will access the behavior you desire by intentionally triggering the cues associated with the behavior.

Making changes entails far more than simply engaging in positive thinking or getting positive images in your head. If you don't change your state of consciousness--and your ability to shift your own consciousness--you'll be listening to the same programming day after day. Learning how to shift out of negative states is a huge achievement. Where dramatic growth occurs, however, is in learning how to create new, positive states: in becoming the programmers of our own experience.

Why Do I Go On Tilt?

 

7/24/2025 - A wild thought:  What if we're in different brain states when we recognize opportunity setting up in markets vs. when we are focused on markets but don't see opportunity vs. when we're not focused on markets.  What if we could monitor our brain states in real time and identify not only when we're in the zone, but also when we're seeing opportunity?  Does intuition leave a distinct brain footprint?  That's my next project--  

7/23/2025 - On the Fitbit device that I use (Muse S-Athena), there is an exercise on the app in which the goal is to keep an owl in flight.  If blood flow is going to the brain's frontal cortex, the owl rises in elevation and flies faster.  If blood flow is moving away from the frontal cortex (our center of thought/reasoning/decision making), the owl lands and stops flying.  Before we ever experience tilt, our blood flow moves away from our thinking centers and toward our flight/fight regions.  The goal of the exercises on the device is to be able to sustain longer and longer periods of flight for the owl--and to be able to return the owl to flight after it has landed.  This measures our cognitive endurance, and it measures our capacity for recovery.  If we train the brain for endurance and recovery, we become able to prevent tilt mode before it ever hijacks our actions.

The problem with tilt is not an excess of emotion.  The problem is a lack of brain fitness:  poor cognitive endurance and poor capacity for recovery.  This is a game changer for trading psychology.

7/22/2025 - The cognitive technique below is quite promising in intercepting the frustration that leads to tilt trading.  A different, behavioral, approach involves learning to keep oneself calm and focused with visualization and deep breathing.  (I am finding brain training devices helpful for this).  Once we have mastered that skill and can get ourselves in the zone on demand (which takes practice), we can then engage in our focused relaxation while we vividly imagine frustrating trading situations that could put us on tilt.  We begin with mildly challenging situations and gradually visualize more frustrating ones.  We don't proceed to a more frustrating visualization until we can keep ourselves fully relaxed while imagining the less challenging one.

Once we can keep ourselves calm in imagination mode, we then start trading with small size/risk and employ the focused breathing in real time when challenging situations occur.  When we can trade small size/risk successfully without tilt and handle drawdowns and unexpected events without losing our concentration, we gradually step up our sizing/risk-taking.  

What this does is literally train mind and body to respond to losses and unexpected trading events in a mode that keeps us grounded in planned trading, not a reactive mode.  This takes practice, but once you have the skill, you have it for a lifetime of successful trading--and you can apply it to other challenging areas of life.  

7/21/2025 - How can we prevent tilt from happening in the first place?  In this post, I'll describe a cognitive approach; in the next, I'll outline a behavioral method.  The cognitive approach links tilt to our self-talk.  In other words, we go on tilt not just because of what is occurring in our trading, but because of what we tell ourselves about what is occurring.  Tilt is preceded by frustration and frustration shows up as negative self-talk.  The key to preventing tilt is identifying the feelings of frustration and the frustrated self-talk *as they are occurring*.  

That takes practice in thinking about our thinking and maintaining awareness of what we're feeling.  In real time, you're aware not only of the market and what it's doing, but also in what you're thinking and feeling about what it's doing.  In my own trading, I actually talk aloud as my position is moving, evaluating what is happening.  The talking aloud enables me to hear myself and stay aware of myself.  If my talking aloud becomes at all emotional, I can catch my frustration in real time before it manifests itself as tilt.  When I find myself getting tense or talking emotionally, I can quickly return to a focused mode by breathing deeply and slowly and focusing on the trade in front of me.  

As a rule, I find it very helpful to have my stop loss orders entered into the book in advance.  That way, I don't have to worry about emotionality interfering with my trading plan when a trade doesn't work out.  When our trading decisions are mapped out in advance and entered in the order book, our trading can be planned and not reactive.

  

7/20/2025 - Reacting to market action is necessary for the management of risk and reward.  Overreacting to market action is a function of the unmet needs we bring to trading.  We can overcome emotional trading by turning our best trading practices into trading routines:  repetition brings familiarity, and we don't overreact to something that is routine.  If we *need* to be right--if we *need* to make money to feel successful as a person--then we will overreact to loss.

The key to overcoming tilt is to anchor our self-assessment in longer-term improvement, not in immediate P/L.  And how do we do this?  By first trading in simulation mode, where there is no money at risk at all.  That trains us to make the right decisions in real time and turn that decision-making into habit patterns.  Only once we've internalized those habits do we begin taking small risk and rehearse making the right decisions.  When we're consistent and profitable at the small level, we bump up the risk-taking gradually, in small increments.  The idea is to build the right habits and learn to enjoy the process over the proceeds.  Small, steady improvement based on consistency is what helps us internalize great trading.  What is familiar and routine cannot shake us up.  There is no overwhelming frustration if we're focused on doing the right things.  

When we take the ego out of each trade and just focus on doing the right things, there can be no tilt. 

Best Practices in Trading: Using Biofeedback to Manage Trading Stress

The body's flight or fight response that we know as stress is often a reaction to perceived threat.  When we care about an outcome that is uncertain--and especially when we perceive a threat to that outcome--our bodies mobilize for action, with adrenaline pumping, muscles tensing, and heart rate accelerating.  That is an adaptive response for dealing with physical threats, such as avoiding an oncoming car, but often gets in the way of careful, deliberate action when the threats we perceive are coming from the trading screen.  It is ironic that, just as we most need to be grounded in the rational activities of our frontal cortices, we typically activate our motor areas and risk acting before thinking.

How we react to perceived plays an important role in determining whether stress brings distress.  Today's best practice comes from Daniel Hunter, who outlines his use of biofeedback in dealing with trading stress.  Readers will recognize biofeedback as a tool that I have emphasized both on the blog and in books, as it's a great way for us to become aware of our stress responses and deal with them proactively rather than reactively.  Here's what Daniel has to say:

"I am a scalper in the forex markets, so anxiety, excitement, and apprehension can creep into the trading day.  I combat this with a device that measures heart rate variability.  The device I use is the Emwave2.  It has an earlobe attachment that I use during trading.  I use it along with the computer program provided and have a visual, real time status of my current state.  If my emotions start to waver and my breathing starts to change, it alerts me, often before I realize my state.  With breathing exercises, I can bring my emotions back under control and focus on what is actually happening in the market.  It is also a fantastic practice before bedtime, as you fall asleep faster and your quality of sleep is much improved.  It is basically an objective meditation monitor."

Daniel also mentions that considerable research supports the use of heart rate variability feedback in controlling stress and enhancing well-being.  Because the monitor gives us real time feedback about whether we are in or out of our performance zone, it serves as a tool for mindfulness.  Once we are aware of our stress responses, we can channel them in constructive ways and prevent them from driving our next trading decisions.  If we choose to trade, we choose to operate in an environment where there is risk and uncertainty.  That ensures that we will experience stress.  Our challenge is to turn stress into a stimulus for self-mastery:  to control our responses rather than allow them to control us.

Further Reading:  Three Uses of Biofeedback for Traders
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Why Your Trading Psychology Exercises Don't Work

 

In the most recent Forbes article, I make the case for mastering our trading psychology by literally engaging in brain training. When I refer to brain training, I am not talking about online exercises or apps that walk you through visualizations, breathing exercises, etc.  Rather, I am talking about directly measuring our body's functioning and training ourselves to control those measures through real time biofeedback.

Over the past two weeks, I have conducted focused experiments with heart rate and heart rate variability, electrodermal activity, and brain wave patterns, using the Fitbit Sense and Muse S units that I referenced in the earlier article.

Here are a few observations that were unexpected:

1)  Taking a Break Doesn't Necessarily Break Our Stress - When I feel stressed and take a break, calming myself and deepening my breathing, I succeed in taking my attention from what is troubling me and I feel more settled, but my body has often not recovered. My heart rate remains elevated, my electrodermal activity and heart rate variability still record stress, and my brain waves are not calm.  Simply taking a break and saying nice things to oneself feels good when we've been frustrated, but may not significantly aid performance.

2)  Less Stress Does Not Equal Greater Focus - This has been dramatic in my experiments thus far.  I can remain still, breathe deeply, and engage in calm imagery and that will reduce my heart rate over time.  (It takes longer than most of us allot to trading breaks.)  When I measure my brain waves, however, they do not show that I'm more focused.  Indeed, to achieve high focus readings with the brain waves, what I need to do is concentrate, not relax.  Interestingly, when I do a meditation routine and do it well, it helps my stress measures (i.e., I'm more relaxed), but my brain waves don't register as being in the zone.  A few minutes of a meditative exercise is very different from mastering the discipline of meditation.

3)  A Few Minutes of High Focus Changes Our Psychology - Most of us are familiar with the feeling of being calm and unstressed. That relaxed state can be helpful in winding down from a period of trading.  A highly focused state feels quite different.  When I'm unusually focused (and the brain wave feedback registers such focus), I feel a slight tension in my forehead and I feel distanced from the world around me.  It doesn't feel relaxed, as one might feel after an alcoholic beverage.  It feels quiet and I feel separated from the world, more like an observer than a participant in what is going on.  Perception is different in this mode, clearer and not at all distracted.  I'll have more to say about this in the next Three Minute Trading Coach video, but my sense is that I see markets much better when I'm highly focused than when I am simply stress free.

So what does all this mean?  Perhaps we're managing our trading psychology the wrong way.  Perhaps we're trying to de-stress when we need to be intensely focusing.  Perhaps we are setting up our trading days and processes in ways that increase distraction and actually prevent us from achieving the focus needed to quickly process evolving market patterns.  Our efforts at improving our trading psychology might not work because we're focusing on our feelings rather than strengthening our brains.

Further Resources:

Mastering Your Trading Psychology

Wiring Our Brains For Trading Success

The Three Minute Trading Coach YouTube Channel

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The Trader As A Sniper

For many years, as I was learning trading, a military poster of a sniper hiding in the brush hung on the wall of my office.  In so many ways, the sniper embodies the strengths of the successful trader:

*  Significant learning and practice precede going into the field and developing expertise.  The sniper shoots at many targets under realistic conditions before ever going into actual battle.

*  The sniper must adjust to conditions in the field.  Hiding is different in the desert than in the forest.  Shooting is different in the wind and rain.  

*  The sniper maintains supreme self-control.  The excited, high-fiving sniper doesn't last long.  It's the sniper who can stay motionless for extended periods of time, controlling breathing, and maintaining steadiness who can make the shot and hit the target.

*  The sniper retreats after the kill.  There is no operating on tilt, no taking of impulsive shots, no overconfidence once the target drops.  The priority becomes moving and remaining undetected.

*  The sniper weaponizes math. Many calculations precede the good shot.  The sniper adjusts for distance, gravity, and the movement of the target.  The sniper adjusts for wind speed and changes in the wind.  The slightest miscalibration sends the bullet astray.

*  The sniper follows an integrated process.  Army Manual FM23-10 describes the sniper as following an "integrated act of firing", with a preparation phase (complete maintenance and check of equipment); a before-firing phase (maintaining position and checking aim); a firing phase (controlling breathing and body movement, steady squeeze of the trigger); and an after-firing phase (noting the kill or determining errors that led to an errant shot).   

Perhaps most important of all, the sniper--like all true performance professionals--spends much more time preparing for the kill (practicing, hiding, observing) than actually shooting.  From athletics to Broadway productions, the performance professional practices and reviews performance for much more time than he or she spends on the field or stage.  It is the hours of motionless waiting and continual maintenance of the rifle and regular practice under different conditions that prepares the sniper for one good shot.

If you're trading with a sense of excitement; if you're spending more time trading than preparing for trading and learning from past trading; if you find yourself firing away without following an integrated process, think about what would happen to the sniper under similar conditions.  Snipers operate in an environment of opportunity--and risk.  Financial markets offer a very similar landscape.

Further Reading:  Trading Like a Sniper
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Trading Psychology Techniques - 8: Overcoming Frustration

The last post in this series focused on ways of overcoming our trading fears.  Many times, it is frustration that can take a trader out of the zone and disrupt trading plans, including risk management.  When trades don't work out--or when we miss good opportunities--there is plenty of room for anger and frustration.  Frustration occurs when we have a strong set of desires or needs and those are thwarted.  Getting stuck in a traffic jam when we have to make an appointment is a great example.  

There are two types of methods that can help us overcome frustration:

1)  Behavioral - This would include relaxation/visualization exercises, biofeedback work, and meditation.  In these techniques, we learn to recognize the signs of frustration as they are occurring (angry thoughts, physiological arousal, pounding the table, etc.).  We then pull back from the frustrating situation and perform exercises that calm us and require us to sustain focus.  For example, in meditation we might slow and deepen our breathing, keeping it quite regular, while we maintain focus on a peaceful image.  By entering cognitive and physical states incompatible with frustration, we can short circuit the anger and prevent it from dominating our actions and decisions.  One powerful variation of the behavioral method is to engage in guided imagery when we are not trading and vividly imagine scenarios that normally might frustrate you.  While you are imagining the frustrating scenes in great detail, you are keeping yourself chilled:  slow, deep breathing, maintaining stillness, etc.  Doing this exercise repeatedly allows you to internalize the calm response when the frustrating situation occurs in real life.  The key is repetition, so that your calming becomes an automatic response to situations that don't work out.

2)  Cognitive - Cognitive methods look at our thoughts and mind states as triggers for our emotional responses.  As the above quote suggests, frustrations are generally preceded by strong expectations and needs.  If we strongly expect a trade to work out--and, even more, if we need it to work out--we set ourselves up for frustration when our scenario doesn't play out.  Such expectations and needs occur when we place too much ego into our trading, so that our feelings about ourselves rise and fall with our profits and losses.  One technique that works well for me is to size initial positions moderately and view the initial trade as a hypothesis.  If my hypothesis is disconfirmed, I can take a modest loss and use that information to potentially take a trade in the other direction.  By viewing my idea as a hypothesis rather than a conclusion, I am mentally prepared to be wrong and, indeed, am in a mindset where I can accept the loss as money well spent for market information.  Risk management is a powerful tool for keeping frustration manageable.  I never want to lose so much in one day that I can't come back over the course of the week.  I never want to lose so much in a week that I can't go green on the month.  When we can frame losses as challenges, they can energize us, not frustrate us.

Trading with too little capital and expecting unrealistic returns to make a wonderful living set us up for disappointment and frustration.  I know developing traders who view each day and week as a verdict on whether or not they'll succeed at what they're doing.  That is simply too stressful for the purpose of maintaining consistency in trading.  We are much more likely to be consistent in our trading if we sustain a consistent mindframe.  That means training ourselves to accept and learn from losses and treat them as learning opportunities, not as existential threats.  Practice in behavioral and cognitive methods can help us create positive habit patterns that defuse frustration and keep us in control of our trading.

Previous Posts in This Series:

Keeping a Trading Journal

Testing Your Trading Ideas

Managing Your Energy

Building a Morning Routine

Developing Relationships

Building Self-Awareness

Overcoming Trading Fears

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