Trader Z referred to the section of The Daily Trading Coach where it discusses talking aloud as a strategy, and he asks how to best implement his talking aloud.
The key idea here is that, when we talk an idea out loud--whether it's to ourselves or to a friend or fellow trader--we force ourselves to put the idea into clear words and make the idea understandable. That allows us to not only speak the idea, but also hear it as we're talking. Many times, hearing ourselves put thoughts, perceptions, and ideas into words, we gain a fresh perspective on what we're thinking. We become an observer to our thinking...we become more mindful of our intentions.
Many times, we will hear ourselves talk aloud and realize that the idea is not a well-formed one. Other times, we may surprise ourselves with the conviction we have in the idea.
Good advice for Trader Z is to pretend that he has been hired by a famous Market Wizard to serve as an analyst. His job is to uncover and explain great ideas for the famous trader. His job is also to follow the market in real time and identify good spots for entering trades based on the idea. Of course, our trader won't want to let the Market Wizard down and won't want to get fired, so only the best ideas and best thinking will be talked aloud. In other words, imagining that you're the analyst and are reporting to someone you look up to forces you to think about your thinking, focus on your best ideas, and be clear about your plans.
Talking aloud with another trader you respect is powerful because it allows for the possibility of feedback and keeps you actively--and interactively--engaged in your trading process. Finding a trading partner for talking out loud and reviewing trading is one of the best strategies available for building mindful awareness of your thoughts and actions. It's amazing how bad our worst ideas sound when we actually put them into words!
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