Sunday, April 11, 2021

BRETT STEENBARGER'S TRADING PSYCHOLOGY RESOURCE CENTER


Contact For Trading Firms and Media:  steenbab at aol dot com

My Twitter Feed:  @steenbab

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:


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.  Trading firms, teams, and portfolio managers interested in performance coaching and help with hiring processes can email me at steenbab at aol dot com.  Please note that my work is limited to trading and investment firms, so I cannot provide online advice or coaching services to individual, independent traders


FURTHER RESOURCES




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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Thinking Through A Traders' Happy Hour

 
Prior to the pandemic, I hosted occasional craft beer happy hour sessions with traders from various backgrounds and firms.  I have always found that such gatherings are helpful in multiple ways, socially and professionally.  Smart, motivated people love to share ideas and learn from one another.  That creates a rich environment for personal and professional development.  And good food and drink doesn't hurt!  Indeed, the research in positive psychology suggests that we learn best when we are in positive mind states and when we process information in multiple ways.

What if the best way to learn trading is not through webinars, classes, conferences, videos, and podcasts, but live, while having fun?  What if the best way to develop as a trader is not by listening to self-anointed gurus, but by learning together from shared experience?  What if Zoom meetings are not meant for talks and PowerPoint presentations, but for creating happy hours and fun, interactive learning experiences in our own homes?

Not a bad legacy from the pandemic!

Stay tuned--

Brett

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Further Reading:

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Sunday, April 04, 2021

What Is Market Breadth Telling Us?

 
A few weeks back, I posted re: market sentiment and noted that sellers were notably unable to push the market lower.  That situation led to a nice rise to new highs in SPY/ES.  Now we see a very different situation.  On Thursday, we broke the 4000 level in SPX, but interestingly, we had 334 stocks registering fresh monthly highs and 75 making new monthly lows.  Compare that with over 1000 stocks making new monthly highs in mid-March.  In early February, we had over 1100 stocks hitting new 3-month highs.  That fell to 939 in mid-March and hit a level of 171 on Thursday.  (Data from Barchart.com).  In other words, the recent market uptrend has become much more selective.  If we look at small cap stocks recently and technology shares, for example, both have failed to take out prior highs.  Indeed, overall, it's been larger cap issues rather than growth names that have performed best of late.

There is a structure to market cycles, in which the market begins with strong upside momentum and a tide that lifts most boats.  As the cycle matures, the strength becomes more selective and we can even observe pockets of the market register new short-term lows.  With the inability to rise and many traders/investors trapped on the long side, we get a move for the exits and a momentum period of decline, with many stocks making new short-term lows.  A dramatic example of this occurred early in 2020, when the market registered 751 new 3-month highs on January 17th and then hit a new index high on February 19th with 503 fresh 3-month highs.  What followed was the big decline from the COVID outbreak.

The current breadth weakness in no way predicts a similar decline for the near future.  Rather, it is a yellow caution light for the bulls.  The market is behaving as it often behaves relatively late in bull market cycles.  I am watching breadth closely to see if the bullish sentiment of hitting 4000 might be masking increasing weakness, particularly among the "reopening" and growth stocks that one would expect to be leading the way higher.

Further Reading:



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Friday, April 02, 2021

How To Trade With Focus

 
Here is a link to the recent webinar I conducted with FuturesTrader71 and Futures.io.  One of the topics that came up was dealing with emotionality during trading.  Morad made the excellent point that we are most apt to respond to markets emotionally if we become too attached to the profits and losses of each trade.  If we define, refine, and follow a sound trading process, we can allow the probabilities to work themselves out in our favor without getting too wrapped up in any single trade.  

A point that I brought up is that, often, it's not emotion itself that is the problem for traders but an absence of focus.  In other words, if we're operating in the flow state--in the zone--we are absorbed in market action and understanding what markets are doing.  It's the presence of focus that provides us with emotional distance.  For example, when I am working with someone as a psychologist and intently listening to what they're saying, I'm not thinking about myself, how much money I'll make from the meeting, how I feel about what they're saying, etc.  Being in the zone naturally takes us out of our own heads and away from our own emotional reactions.

As the quote above indicates, what we focus on expands.  When we focus on something, we reinforce it.  If we focus on our shortcomings, we diminish our self esteem.  If we focus on losing money, we reinforce our insecurities.  When we focus on mastery and understanding, we expand our sense of competence.  

I mentioned in the webinar that many people try out meditation as a way of building focus, but they don't go about it the right way.  They meditate long enough to relax, not long enough to enter the zone.  This is why I like biofeedback devices that give immediate feedback as to whether or not you're in the zone.  Simply trying to dampen negative emotions doesn't work.  We need to get ourselves into a quiet, focused state and then sustain that state for increasing periods of time. 

What we focus on expands.  But if we focus on focusing--if we practice intensive focus each day--then our capacity for focus expands.  Without focus, we lose free will.  We lose our ability to determine our future.  There is little sense spending our time setting goals if we lack the focus to sustain their achievement.

Further Reading:



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