Special Sale on Positive Trading Psychology Book

 

1/1/2026 - Happy New Year!  This end of year period is a perfect opportunity to reflect on the past year and especially on what we can do in 2026 to make the coming year as rewarding in all ways.  The Barnes & Noble sale on the Positive Trading Psychology book ends today (see below).  What I've found in my personal life as well as my professional work is that positive psychology is a game changer.  So much of what we focus on is the negative:  correcting the mistakes we make.  That is necessary for success, but it is not sufficient.  Your experiences of meaning and fulfillment are your best coaches of all, telling you what you need to do to make the most of your trading, your relationships, and your life activities.  Our passion points the way to our path; our positive psychology points the way to a positive life.

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12/31/2025 - Many thanks to Barnes & Noble for sponsoring this sale of the upcoming Positive Trading Psychology book.  The sale runs today and tomorrow and covers both the print/electronic book and the audiobook for B&N members.  When ordering the text, all you have to do is enter the code PREORDER25 and you'll get 25% off the book price.

My hope is that the book can be a helpful resource for you personally as well as for your trading.  The idea is to clearly identify you at your best--your ideal self--and then build your life around that vision and inspiration.  I wish you a very happy New Year and look forward to being a resource for you and your trading in 2026!  

Brett

 

What Creates Trading Success

 

12/30/2025 - What creates success in trading is what creates success in life.  Not minimizing life's negatives and avoiding conflicts, but pursuing meaningful opportunity and developing "processes"--sets of life activities--that offer joy, fulfillment, stimulation, and significant connection with others.  The psychological well-being that I cover in detail in my upcoming book, Positive Trading Psychology, is something that can be achieved in every facet of trading--and every facet of life.  There is a big part of each of us that seeks comfort and that avoids strenuous effort.  That doesn't work in the gym, and it doesn't work in life.  Psychological well-being represents our personal, psychological fitness and that fitness means that we seek challenges in our work, in our relationships, and in our personal pursuits.  We grow through tackling new things in new ways, whether in trading or in romantic relationships.  

As we approach the new year, it's worth asking how you will grow in every aspect of your life--including your trading.  How will your life become more enjoyable, more meaningful, more stimulating, more connected to those who matter?  It's difficult to trade positively if we're not leading positive lives.

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12/29/2025 - The complexity of markets guarantees that no one will ever achieve complete mastery in their trading.  Indeed, as I've shared in the past, even the best discretionary, directional traders are not profitable on much more than half of their trades.  They have the conscientiousness to limit their downside and the aggressiveness to size up trades as they work.  But their trading is always a work in progress.  That is why the drive for improvement is essential to trading success.

The drive for improvement shows up in the effort, detail, and amount of time spent in performance review; the seriousness of journaling and pre-market preparation; and the continuous work on finding new sources of edge.  Think of all the ways in which the drive for improvement shows up in an Olympic athlete; a winning sports team; a world-class performing artist; or a state-of-the art medical program.  Motivation comes, not only from winning, but from becoming better and better versions of ourselves.

There will always be winning and losing periods in markets.  The great traders turn both into fuel for development of their craft.

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12/28/2025 - Perhaps nothing is as commonplace--and superficial--as declaring that one has a "passion" for trading.  Usually that means a passion for making money.  One might have a passion for sex as well, but that is not what makes a lifelong, successful relationship.  Still, passion is clearly evident among the world's best traders.  It's not a job or even a career.  It's a calling.  It's what they feel that they are meant to do.  And that pertains to every aspect of trading process, from generating ideas through research and collaboration to finding better and better ways to express and manage the positions that come from idea generation.  Many traders hope to make money so that they don't have to work from 9 to 5.  The great traders track markets and generate ideas well before 9 am and well after 5 pm.  We pursue a job; a calling tugs at us.

Nothing is more important to developing traders than figuring out where your calling in markets might lie.  Or perhaps in figuring out that your calling is to be found elsewhere in life.  All the silliness about controlling emotions and avoiding FOMO goes away when markets call to our highest aspirations.  

Callings call to the best of us.  

When Margie and I got married, this was our wedding dance song.  Not a fun song or an ordinary song of love, but an expression of what a romantic calling is all about.  Almost 42 years later, it's still one of the few songs I listen to for inspiration.  

May you always live life passionately!

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12/26/2025 - Closely related to curiosity (see below) is insight.  Insight into markets comes from intuition and intuition comes from pattern recognition.  Our curiosity leads us to observe markets again and again--and in many different ways--and that leads us to observe patterns.  Just because we perceive a pattern doesn't necessarily mean that the pattern is uniquely informative, but it does provide us with a useful hypothesis worth testing.  Some of the best trade ideas begin with a flash of intuitive insight.  Our minds are putting together the information we've been processing again and again in different ways, enabling us to perceive what we would otherwise miss.

The other day I was reviewing my market breadth data and comparing the information from one database (sector specific breadth) with the information from another (overall market breadth across multiple time periods).  A thought popped into my head that what is important in the breadth data is "height" and "width".  The thought came with the striking clarity that has usually accompanied my best insights--whether about people or markets.

"Height", I decided, meant the vertical component of the spreadsheets, which is time.  "Width" meant the distribution of the breadth data across various sectors or various lookback periods.  I immediately constructed spreadsheets to capture upside and downside breadth thrusts (which I had been reading about on the SentimenTrader site) over varying time periods and for various indexes and sectors.  From my analysis of the data, it became clear that thrusts that occur in the context of multiple overbought and oversold markets and periods display promising price continuation and reversal.  An upside short-term breadth thrust in an oversold market, for example, often begins a short-term trend--particularly when it occurs across multiple sectors.

The point here is not that you should necessarily trade breadth patterns in equities.  The point is that, if you true examine enough important information in enough ways, promising ideas will come to you.  Creativity begins with creative perception--and that can only come when we look at new things in new ways.  

Insight provides us with our greatest market vision.

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12/25/2025 - Reducing and eliminating trading mistakes is necessary for success but not sufficient.  Having worked at many successful trading firms, I've been able to see success up close and personal.  In these posts, I hope to share what I've learned.

The first element in success is curiosity.  The really great traders spend a good amount of time screening for opportunity:  across the universe of stocks and stock markets, across a variety of strategies and systems, across a range of asset classes.  They explore what is happening in the world--and what is happening in markets--and actively looking for what is likely to move next.  I spoke with a portfolio manager recently who described scouring the interest rate curves of various sovereign markets to see what might be mispriced within and across markets.  This process requires digesting news across the world, an understanding of central bank policies, and a continual updating of economic and geopolitical developments.  No one can sustain that kind of curiosity without unusual open-mindedness and a passion for puzzle-solving.

Day traders in the stock market may not be scanning for those global drivers of markets, but will be equally detailed in tracking the prices where volume expands and contracts; the ways in which stocks are moving together or in rotational patterns; and the patterns of shares that are most active and volatile.  In my books, I've shared how successful traders I worked with spent all day following and trading the market--and then spent further time replaying the day and examining what happened, how it happened, what they missed, and how they could improve their execution and trade selection.  Day after day.  That is more than motivation.  It is a passion for learning and an undying curiosity.  It's what drives world-class athletes to spend hour after hour watching game videos...Their motivation is not just to win, but to live life as a winner.  

Trading and Spiritual Strengths

 

12/24/2025 - What if you could rely on an AI platform to review and analyze your trading, integrate your journaling with its recommendations, interact with you by voice in real time, and even monitor your physiological data from wearable devices?  Moreover, what if you could bring the analyses and recommendations of the AI to a live trading coach for ideas about implementation, so that the coaching is truly a hybrid of AI-based analyses and experienced psychological guidance?  I look forward to collaborating with Tradefulness in 2026 to explore how coaching can take real-time feedback and turn it into real-time coaching--and then monitor how well the coaching is actually put into practice!  Could this be a framework for accelerating trader development and improving the success rate of new traders?  There can't be any great answers without first asking valuable questions.

Happy holidays!

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12/22/2025 - Here is the most powerful motivation I've found for trading well:  generosity.  A while back, I decided to dedicate a meaningful percentage of my trading profits to support my family.  The idea is that, if I trade well, I will do good by helping those I care about.  The same dynamic would be present if a trader decided to dedicate a percentage of profits to a charity or social cause that they strongly supported and believed in.  

Now all of a sudden there's a different motivation for trading psychology.  I would never want to hurt someone or something I cared deeply about.  My desire is to live generously and see others benefit from my success.  I would feel much worse taking away something from a person I love than taking it away from myself.  That motivation to be caring and generous pushes me to make the right decisions:  take breaks when needed, manage position sizes and risk correctly, and remain patient for A+ opportunities.  It also incentivizes me to take proper risk when those good opportunities arise and make the most of my trading.

Every so often, I visualize the people I hope will benefit from my work (including my trading) and feel the love for them.  That motivates me to be generous and help them through my success.  What otherwise could be an ego-filled set of activities now becomes an opportunity to turn doing well into doing good.

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12/21/2025 - Related to the spiritual strength of acceptance (see below) is forgiveness.  If someone we care about unintentionally hurts us, we let them know and the odds are good that they will apologize.  At that point, we forgive.  Forgiveness doesn't mean ignoring a wrongdoing or blindly accepting it; it means that we're all fallible and we don't allow individual mistakes to fracture important relationships.

Well, how about our relationship with ourselves?  When we make a mistake that hurts someone--or that hurts us--we own up to that mistake and vow to not repeat it.  But then we forgive ourselves.  Just as forgiveness preserves our personal relationships during times of conflict, it preserves our relationship with ourselves.  We vow to learn from our trading mistakes--and we outline plans to put that learning into practice--and then we forgive ourselves and move forward constructively.

If we can't forgive ourselves, then of course we'll resort to revenge trading and overtrading to undo what we did wrong.  Forgiveness does not mean passively accepting falling short; it means that we support ourselves in correcting our inevitable failings.  

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12/20/2025 - Yet another spiritual strength that can fuel our trading development is a sense of wonder.  Here is an excellent recent article on the topic that cites research linking a sense of awe and wonder to improved health and emotional well-being.  Most of us are familiar with experiences of wonder and awe in nature, such as when we survey a magnificent mountain landscape.  Perceiving a wonder-full piece of artwork, taking in the sight of a newborn baby, contemplating the stars and our place in the universe--all of these can trigger a sense of awe.

So how does this relate to markets?  When we study the stock market, we cannot help but be amazed at the interplay of timeframes, rotation of funds across sectors, and rotation of money across different asset classes--all impacted by news, economic developments, and geopolitical events.  Are markets wholly predictable?  Absolutely not.  Every so often, however, we catch a glimpse of how funds are flowing and how markets are moving and we can benefit from that insight.  The experience of grasping something that complex brings a feeling of awe and wonder.  It has nothing to do with P/L and it never occurs when we're focused on ourselves and how much money we can make.  It also never occurs when we try to reduce markets to simple chart patterns or trading signals.  It's when we step back and appreciate how markets move that, like scientists immersed in the complexity of what they're studying, we can find a fresh source of motivation in grasping something truly awe-some.

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12/19/2025 - A second spiritual strength essential to trading success is acceptance.  The ability to accept setbacks is essential to learning from them.  Indeed, much of what we call "overtrading" and "revenge trading" is the result of the inability to accept prior losses.  When we accept a loss or a trading mistake, that doesn't mean that we passively tolerate it.  Rather, it means that we own it and, as noted below, accept it as a gift:  a learning lesson that can make us better.  We can't be grateful for what we learn as noted below unless we first accept it.

But there is a second way in which acceptance is key to our successful trading.  We have to be accepting of ourselves.  We have strengths.  We have weaknesses.  We are still learning.  That is OK.  Ayn Rand once noted that, "A quest for self-respect is proof of its lack".  When we accept ourselves, we accept all of ourselves--and we respect our shortcomings as well as our abilities.  We cannot trade to achieve self-respect.  Our self-respect must guide our trading.

We must become our own gurus and develop our own expertise.  The search for gurus who will give us the answers betrays our own lack of self-respect and self-acceptance.  When we accept who we are and where we're at, we're ready to learn from that and move ourselves forward.

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12/18/2025 - In these posts I'll outline a few spiritual strengths that manifest themselves as trading strengths.  The first of these is gratitude.  When we feel grateful for what we have and who we are, we experience overall well-being.  We know from the research on positive psychology that the dimensions of well-being contribute significantly to career success, success in relationships, and overall physical health.  

But how can we be grateful if we're losing money in markets or if our personal lives are becoming rocky?  If we view our setbacks as opportunities to learn and do things differently, then suddenly those negative events become tools for our growth.  We can be thankful for challenges that come our way, because those will ultimately make us better.

Similarly, when we're grateful for our successes, we avoid perfectionism and the nagging need to always do more.  Indeed, the energy of gratitude helps us build upon our successes and continually improve.  

Gratitude shapes our mindset and guides our development.

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12/18/2025 - The life we plan is not always the life that's meant for us.

When I wrote the blog book Radical Renewal, I recognized that the needs of the ego were some of the greatest obstacles to successful trading.  The really great ideas and trades came from letting go of our needs and learning to listen from deep within.  As I mentioned in the conclusion to the book:  "Not so long ago, the phrase 'trading spirituality' would have been viewed as an oxymoron.  Among the traders I work with, there is growing recognition that how we lead our lives impacts how we interact with financial markets." 

There are precious few places where traders can talk openly about their religious/spiritual development and how that impacts their trading--and their lives.  We're all too cautious to bring up what we believe because we don't want to be seen to be preaching to others.  So that part of our lives gets left behind.  Which leaves us to trade with our egos.  Indeed, my desire to not allow my day to day work in life and markets interfere with my spiritual development led me to begin the Integrative Judaism site.

But what if there was a community where participants could share their spiritual experiences as readily as their trading experiences?  What if people shared best practices in their unique religious lives and explored how those become best practices throughout life, including trading?  What if there was a community of traders from diverse spiritual traditions and backgrounds, where everyone could inspire everyone else?

I have no preconception as to the shape such a community would take, how it would communicate and collaborate, etc.  The fun and adventure is to discover together.  If you are a trader and would like to explore the intersection of your work in markets and your spiritual/religious work, by all means reach out to me at steenbab at aol dot com and we can explore possibilities.  As always, I appreciate your interest and support--

Brett

Finding Trading Opportunity

 

12/17/2025 - So here's what I'm going to do at the SMB Trading Summit in March:  I'm going to ask all participants to bring their best and their worst.  That means that every person will review their trading in Q1 and identify what they did really well and how they did it--and they will identify what they did poorly and why it happened.  Then, during my talk and during the get-togethers, I will happily meet with attendees and provide coaching re: what links the best and worst and what can supercharge their performance in the second quarter.  Best of all, everyone will be able to learn from everyone else's lessons and suddenly we've created a team environment!  It takes a bit of courage to lay it all out there, but no one ever achieved greatness amidst safety.  Let's go for it!  (And, yes, I'll bring my best and worst as well!!)

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12/16/2025 - One of the first things I recognized when I began working with truly successful traders and portfolio managers was that they viewed markets differently from others.  They looked at different things, gathered different information, and came up with different trade ideas and unique combinations of trade ideas.  That was my first recognition that creativity is essential to trading psychology.  The successful traders were excited about the hunt for fresh information and ideas and this energized their trading.

Recognizing this, I began to hold craft beer gatherings in Connecticut and Westchester County in New York.  I selected the brewers crafting the most unique beers and the sites serving the best selection of distinctive brews.  (DeCicco's stood out in that group!)  Traders and money managers from different firms joined me for an exchange of ideas and a selection of amazing beers.  The creativity of the brews definitely stimulated the creativity of the ideas shared and discussed.  Most important of all, the outings ensured that participants were not trapped in isolation and could see new and different things and gather fresh information and perspectives.  That was much better for the trading mindset than any self-help exercises!

When everyone shares, everyone goes away richer.  The great enemy of trading is isolation and stale ideas and perceptions.  Creativity is a team sport.

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12/15/2025 - When I first began working at large, successful hedge funds, I was surprised to learn that the top portfolio managers--ones managing hundreds of millions if not a billion or more--did not have win rates much greater than 50%.  This was particularly true in macro investing, where teams sought to exploit economic patterns across asset classes and regions of the world.  The reason they made money was that they were very good--and consistent--at risk management.  They didn't have a large number of big losing trades, and they didn't have big losing periods.  If they saw they weren't seeing things well, they were unusually quick to pull back and reassess.

But there was a second element to their success.  They were quick to recognize when a good idea was becoming a good trade and pouncing on it with large size.  It's not that they sized up favorite trades from the outset.  It's that they tracked their initial positions and observed when price/volume was going their way (or when catalysts made the good trade even better).  They then had the courage to take very large positions to exploit the opportunity--and continued to manage the risk tightly.  As a result, they had a few truly large winning trades/periods during the year, many smaller wins and losses, and very few significant losers.  Their profitability came from a relative handful of occasions when they had the perspective--and the courage--to take significant risk.

Years ago I met a very famous trader.  He was quite generous and asked if he could help my trading.  He asked me what the ratio was between the size of my largest trades and the size of my average trades.  I replied, "Maybe two or three to one".  He gave me a very direct look and said, "Consider ten to one".  I didn't fully appreciate his mentoring at the time.  But now I see it playing out with top traders at top firms.  Just as important to trading psychology as controlling negative emotions is the willingness to commit to opportunity.

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12/14/2025 - Courage is not something we hear a lot about in discussions of trading psychology.  To find new and different opportunity and pursue what others don't see and discuss, requires considerable courage.  To refine your strategies and use your losses to persevere and improve what you do:  that, too, takes courage.  True entrepreneurs are courageous:  they invest in their vision and accept the risks of failure.  No one has ever achieved distinctive success in a "me too" mode.

Indeed, what gives us the courage to take risk and harvest reward is the presence of a vision:  something that grabs us with its uniqueness.  When an idea feels special to us, we commit ourselves to seeing it through.  A positive psychology comes from vision, not from self-control exercises.

We've seen some amazingly rotational environments in the recent stock market.  What might look "choppy" when we view the broad market indexes suddenly becomes clearer when we examine price and volume action sector by sector, subsector by subsector.  A trend is a directional movement of an asset.  Rotation is the different directional movements of related assets.  Rates traders understand this well:  there are environments where central banks are in play and interest rate instruments trend, and there are environments where central banks are sitting on their hands but individual instruments will move relative to one another.  A key to success for a rates portfolio manager is knowing when to trade trends and when to trade relative value.

Many, many times large institutional participants are not broadly buying stocks or selling them, but are moving money from certain parts of the market to others, from certain countries to others.  Seeing the relative movement and finding opportunity in trading it requires a willingness to do something different from the crowd.  It requires a unique way of structuring trades.  It requires courage. 

Strengthening Your Trading By Leveraging Your Strengths

 

12/12/2025 - The subtitle of my book that will be coming out in late February is important:  Turning personal strengths into trading strengths.  We come to markets with talents, skills, and experience.  The challenge of developing as a trader is figuring out how to apply those to the various facets of trading process, from generating ideas to managing risk.  As noted below, your success as a trader will come from what energizes and excites you:  your passion will point the way to your purpose.  There is so, so much more to trading psychology than overcoming negative emotions.

Research in psychology suggests that there are four major sources of psychological well-being:  happiness (things we do that are enjoyable); purpose (things that we do that are meaningful); energy (things we do that build our vitality, strength, and endurance; and affection (things we do that connect us to others we care about).  The activities that provide our greatest success fire on all four of these cylinders.  Our challenge is to structure our trading--and the time of each day--to maximize the things that bring us joy, meaning, vitality, and closeness.

One of the strengths my research found is most closely associated with trading success is entrepreneurialism.  Great traders treat their trading as a start-up business, and they have the energy, enthusiasm, and passion that great entrepreneurs bring to their undertakings.  That is positive trading psychology--        

12/11/2025 - What we are passionate about reveals our strengths, and those reveal our values and our talents.  We don't have to push ourselves to get things done if what we're doing truly speaks to us.  Yes, there are always life's errands and to-do activities to get out of the way, but if we're looking forward to what comes after, it's never a problem to check the boxes.  Many beginning traders are passionate about making money, but that's different from being passionate about trading and understanding markets.  If those traders don't make money, they are left with nothing to support them emotionally.  They become frustrated, and that seeps into their trading.  When we identify our passions and our strengths, then we're in a position to creatively integrate those into our trading processes.  A great place to be psychologically is to be passionately involved and interested in markets even when we're not putting positions on.

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12/10/2025 - What is the most important strength for beginning and developing traders?  Certainly high up on the list is emotional self-awareness:  the ability to recognize what you're experiencing at the time you're experiencing it.  This is useful in two regards:  1) it gives us the option to step back from trading when we're frustrated or confused, so that our trading does not become reactive; and 2) it allows us to more clearly recognize our intuition when we see patterns occurring in real time.  In other words, emotional self-awareness is what enables us to avoid poor trading that results from acting on impulse, but it also makes it possible to better perceive opportunity in real time.

Emotional self-awareness is possible to practice in any area of life where emotions can get us in trouble--or where they could help us respond to challenges constructively.  A great example of this is close relationships.  By avoiding reactive responding due to frustration, hurt, or overload, we can step back and deal with misunderstandings in a helpful way.  By recognizing our partner's needs in real time and empathizing with those, we can become better at reaching out and growing our closeness.

Everything in life that engages our emotions can be practice for emotional self awareness and control in our trading.  How we live either reinforces the best within us, or it reinforces our vulnerabilities.  Trading psychology is best worked on when it draws upon life psychology.

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12/9/2025 - What have been your best trades--and best trading periods--of 2025?  From generating the trade idea to expressing it, sizing it, and managing its risk, identify *specifically* what you did well in these best trades.  Very often, it is in analyzing our best trading that we can identify the cognitive and emotional strengths that contribute to our success.  For instance, a while back I analyzed my profitability as a function of time of day (since most of my trading was intraday).  Very early in the morning right after the NYSE open, I did poorly.  Later in the morning, I did quite well.  Around noon and midday, I was mediocre.  

What led to my success was patience and listening carefully to the market and understand who was involved and how--and *then* placing my trades.  I was successful only when listening--and I was specifically listening well during busy periods, because I could track the activity of the larger market participants.  Because of years of work as a trading coach, I understood large traders and their behavior patterns--and I was successful when I drew on that awareness.  When I simply tried to trade market patterns on my own, my results were basically random.

The point here is to dig deep into your best trading and figure out what makes you tick when you're successful.  The goal is not to be like anyone else; it's to be more and more like yourself at your best.

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12/9/2025 - Tomorrow's free webinar at 4:15 PM ET will focus on assessing your strengths and applying them to your trading. Registration will close by the end of the trading day today.

What are your relationship strengths?  What do you do best as a spouse, as a friend, as a family member?  How are you able to grow your connections with people at your work and in your community?  What makes you successful in collaborating with other traders?

This blog has covered the topic of teamwork and the value of being part of a trading group/pod/community.  But how can you best help others and best receive help yourself?  By drawing upon your relationship strengths, you can teach others (and thereby reinforce your own learning) and you can learn from others (and refine/broaden your trading).  

Your strengths as a person are the foundation for your growth as a trader.  

See you tomorrow!

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12/8/2025 - As we get to the end of the year, many traders reflect on the year past and formulate goals for the year ahead.  An important concept in psychological research is that much of our growth comes, not from our top, "signature" strengths, but from expanding and developing what are called our "latent" strengths.  These are areas where we excel, but don't necessarily know we excel and so we don't consciously draw upon them during times of challenge.  We can think of these as relatively "hidden" strengths.  Perhaps they show up only occasionally in life or in a limited number of life circumstances.  They *are* strengths, however, and we can cultivate them to further our development.

My signature (top) strengths include a drive to learn and achieve.  If you were to ask those I live with, however (especially my cats!), they would say that my ability to listen and understand others are some of my best qualities.  Indeed, those have long driven my work as a psychologist.  In pursuing trading, however, I've only recently worked on ways of becoming a better listener of markets:  breaking down the market into components (sectors, subsectors) and hearing the (often unique) story each part of the market is telling.  Getting inside the market and truly listening has opened insights that I had missed despite my work ethic.

What areas of strength might be relatively hidden in your life that could take your trading to the next level in 2026?  How could you exercise those areas, so that your latent strengths get even stronger?  Very often, looking to areas of life very different from trading can alert you to what you do well that could creatively be imported into your trading processes.

In the upcoming free Wednesday afternoon webinar (December 10th; 4:15 PM ET), we'll not only evaluate your strengths, but also identify your latent strengths and discuss ways of growing them.    

Let's make the new year a year of new growth!

    

Being Outstanding By Standing Out

 

12/7/2025 - Here is a very important concept:  Any success you experience as a trader will be a leveraging of success you've already experienced in some other area of life.  Success is a function of what you love (your passions) and what you're good at (your talents).  The strengths that have made you successful in the past are what you have to draw upon to find success in markets.

Now you understand why it is so damaging to look for gurus to follow for your market success.  There are many would-be gurus out there and they're in the social media business of gathering followers.  But following them almost certainly takes you away from yourself.  A true mentor or coach would get to know you and what has made you successful and then help you leverage that to find success in markets.  

There's a saying, "If you find the Buddha on the road, kill him".  The real Buddha is something that can only be found within you.  Anyone claiming to be your source of enlightenment is by definition false.

What are *your* strengths; *your* sources of meaning, passion, and success?  How can you succeed in trading by being more of who you already are when you're at your best?  These are a few of the topics we'll explore in Wednesday's webinar.  Details for signing up are in bold text below.  Thanks for your interest!

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12/7/2025 - I've participated in recruitment/hiring at several large hedge funds and with quite a few hedge fund teams.  The number one predictor of a good hire (and an eventual successful trader) is my reaction to their description of their trading processes.  If I am surprised by the uniqueness of what I'm hearing and am struck by the innovation of what I'm hearing, that is a great predictor of success.  Great traders do things greatly, and that means going beyond the herd.  

But I'm not sure we can do things greatly if we don't understand the strengths that make up our potential greatness.  What makes us different, special, unique, and successful?  Can we truly build something great if we spend all of our time fretting about shortcomings and problems?

In the upcoming Zoom webinar on Wednesday at 4:15 PM (see below), we'll discuss strengths and I'll share a questionnaire that helps us identify the sources of our greatness.  If our trading is not a reflection of what we do distinctively, we'll never achieve distinctive trading results.  

Hope to see you on Wednesday!

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12/5/2025 - What makes us stand out--and what makes us outstanding--are the strengths we bring to our relationships, our work, and our personal pursuits.  Research in positive psychology tells us that utilizing our strengths is what makes us flourish, providing us with energy, enthusiasm, and fulfillment.  Unfortunately, many times we're so caught up in our challenges and problems that we lose sight of where our strengths actually lie.  Too, we might know what provides us with joy, meaning, and purpose, but we can't figure out how to tap into those things in our trading.

On Wednesday (December 10th) at 4:15 PM ET (after the NYSE close), I will conduct a Zoom webinar on the topic of strengths.  I'll share an online questionnaire from research I've conducted at hedge funds and will help you score it and interpret and apply the results--to life and to trading.

The webinar is free and I won't be trying to sell you any coaching services.  Email me at steenbab at aol dot com and I'll send the Zoom link; registration will be limited.

Let's go!

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12/4/2025 - So here's what I'm investigating in my recent research:  

We can identify market breadth by tracking the number of stocks in an index that are trading above various moving averages:  5 day, 10 day, 20 day, etc.  We can also identify breadth within sectors by tracking the number of stocks in that sector trading above various moving averages.  All good:  we can see if the market is stretched and if individual sectors within the market are stretched.  That allows us to backtest how the market and sectors have behaved in those stretched conditions.

Here's the new part:  What do we learn from the variability of sector breadth?  In other words, what does it tell us when sectors have very similar breadth and when their breadth is quite different at a given point in time?  Might that variability be one way of quantifying rotational environments (sectors with highly variable breadth) versus trending ones (sectors with very similar breadth)?  Might the trending/rotational environment be an important variable in forecasting future price movement?

I have more research to do, and it's looking like differentiating rotational environments will be promising: how the market is rotating may be just as important as the fact that it is rotating.  The point here is that when we investigate new things and look at markets in new ways, we rejuvenate our trading.

When we team up with others who explore unique ways of looking at markets, we keep each other energized and engaged--and that is the best environment of all for our trading psychology.  

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12/3/2025 - Successful traders ask unique questions, and that helps them generate new edges in their trading.  When I left the recent team meeting, I found myself pondering the cyclical up-and-down behavior of market indexes and wondering if shifting variability in the action of various index components is a marker for cyclical shifts.  For example, do we see more dispersion of price behavior in the components of the NYSE as we move from bull trends to topping behaviors to reversals to bottoming action?  Of course, this leads to all sorts of experimentation with measuring dispersion.  Do we do that by tracking the individual stocks?  The sectors and subsectors within the index?  How much dispersion and lack of dispersion is significant in signaling trend shifts?

I've already spent hours on the research and will spend a good amount of weekend time on it as well.  What is significant with respect to trading psychology is that asking fresh questions has recharged my interest in trading.  I find myself excited each day to see how dispersion and market behavior unfold in real time.  The excitement comes, not from P/L and certainly not from doing little psychological and stress management exercises, but from innovation and the joy of participating in a process of discovery.

When I read the journals of traders, I find some of them constructive and informative.  Rarely do I find them inspiring.  Rarely do I find traders truly excited about building and doing new things.  It's not the presence of stress and uncertainty that destroys traders; it's the absence of the joy of discovery and innovation.

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12/2/2025 - What goes into your trading that stands out?  That is truly insightful and unique?  What do you do in markets that is special?  Too often, traders look for easy answers by following "gurus" and end up doing nothing distinctive themselves.  Is this a formula for success in any area of life?  If you aren't doing something special in your trading, why would you achieve special results?  

Innovation, creativity, the ability to perceive unique opportunity:  those make for success in any entrepreneurial effort.  When we see and do unique and special things, our experience is exciting, meaningful, and purposeful.  Our efforts give us energy.  We can work on our psychology all we want, but if we're not innovating and inspiring ourselves by finding new and better opportunities, then all we'll accomplish is being more relaxed and level-headed in our mediocrity.

Those who achieve outstanding results do so by standing out, even in the smallest details of their work.  I recently met with a group of successful traders and listened to what they think about and how they think.  I went away with my head spinning, fresh with new ideas to research and pursue.  The best mentors stimulate us to ask questions we've never asked before.  

More to come...

Making Trading Enjoyable

 

11/30/2025 - Research in psychology tells us that enjoyment is necessary for overall psychological well-being, but it is not sufficient.  We can be happy and enjoy ourselves, but lack a larger sense of purpose and meaning.  Our states of happiness also don't mean that we're meaningfully connected to others or that we live lives of physical energy and vitality.  When I conducted a research project to identify the psychological characteristics of successful traders/portfolio managers, one factor stood out:  entrepreneurialism.  Successful traders find happiness and meaning and energy and connection to others through building their businesses.  

How well are you building your trading business?  Are you doing what great entrepreneurs do?

If your trading business was someone's actual business startup, would you invest in that business?

If you ran an actual startup business with the same effort, planning, and execution as you run your trading, how likely would you be to succeed?

In the long run, we're most likely to enjoy trading for the same reason that we enjoy a relationship:  because we're building something meaningful.  

Great trading requires an investment in ourselves.

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11/30/2025 - Suppose I continually focused on all people who are wealthier than me, all people who are more famous than me, all children who are more successful than my kids, and all women who are better looking than my wife.  Every day, I would reinforce the sense that I am lacking.  Life would be miserable.  So much of enjoying life and living it to the fullest is accepting and appreciating what we have--and making the very most of it.

This is very important and relevant to our development as traders.  The goal is not a perfectionistic one; we don't focus on every move that we don't catch.  Rather, we focus on what we do well and where our talents and skills lie and make the most out of those.  I am a trader, not a longer-term investor.  I trade the stock market, not commodities or fixed income instruments.  I excel in trading the morning hours in the U.S., not trading every minute of every day the exchanges are open.

As noted below, perfectionism is a destroyer of our trading psychology.  Acceptance and appreciation, coupled with targeted efforts at growth, create fulfillment--and that fuels our further development.  Nothing is more important than exploring, exploring, exploring and discovering what you're truly good at and what is meaningful to you.  Before we can ever achieve a degree of greatness, we have to become great at self-understanding.  We become what we repeatedly do.  We internalize what we repeatedly feel.  Focusing on our strengths makes us ever stronger.

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11/28/2025 - I worked with a portfolio manager who put on his initial positions with a pretty wide stop level and a pretty wide target.  He saw a good opportunity with good risk/reward and didn't want to be perfectionistic about getting the absolute best price.  Once the initial position was on, he told me he hoped it went against him so that he could add at better levels.  As long as the trade didn't stop him out and nothing happened in the world that made him question his view, he treated adverse price movement as opportunity.  He actually looked forward to the market moving against him.

Conversely, he established a first target to take profits before his positions hit his primary target.  By taking profits at the first level, he ensured his position would be profitable overall.  Further, once he hit his first target, he raised his stop to breakeven.  How he managed his trade was how he managed his psychology.  He enjoyed trading because he maximized the 

consistency of his profitability rather than being a perfectionist about P/L.  And while his position was doing its thing?  He was already talking with the other traders he valued and generating the next promising idea.  Instead of staring at screens, he was engaged in the enjoyable pursuit of creativity.

How we trade shapes our psychology--  

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11/27/2025 - What is the most destructive emotion in trading?  What destroys the joy of our progress and turns normal, expectable losses into catastrophes?  I would argue that the most destructive approach we can take to trading is perfectionism.  Once we adopt a perfectionistic mindset, we cannot enjoy trading.  Good enough is never good enough.  Progress is never perfect.  Even our wins don't bring celebration, because we always could have won more.

Where does this perfectionism come from?  It's a great example of how one of our strengths (in this case achievement motivation) becomes a weakness when taken to an extreme.  When we so push for achievement that we cannot stop and appreciate our progress, we create a toxic psychological environment for trading.

It's great to strive for improvement; it's equally important to celebrate our progress.  Indeed, celebrating what we've done well is the best way of providing fuel for the quest to improve further.  If trading is not enjoyable, we quickly run out of fuel.

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11/26/2025 - When we adopted Nomi Lyn (chocolate point Siamese cat), our first priority was to integrate her with our three other cats.  As you can see above, she's bonded well with Molly Ruth (white khao manee) and Ares Payton (reverse black tabby).  Her bonding with Shay Gil has taken a bit longer, as I recently pointed out, because of Shay's difficult experiences in a rescue shelter.  Providing an environment where they can all flourish is tremendously personally rewarding.

Let's say I felt the need to have each of the cats enter cat shows and win awards.  All of a sudden, I have to control their access to one another, structure their time to teach them routines, and make sure that one of them doesn't get the others sick.  In short order, I would no longer treasure my time with the cats.  Instead of enjoying them as an end in itself, now they become means to my ends.  For me, that ruins the experience.

Similarly, I enjoy writing.  The joy of writing is learning about a subject and then using the writing as a way of thinking out loud, making connections, and deepening that learning.  If I were to suddenly prioritize how popular my writing was to become--how many books I would sell, how many hits my posts would get--that would change what and how I write.  I would no longer enjoy the experience.  Writing would become a means to an external end, not a end in itself.

Trading is more challenging in many ways because we *do* pursue trading for the end of making money.  Yes, it can be enjoyable, but it's different from treasuring the time with our cats or our children.  Ultimately it *is* a means to an end.  And that can spoil the experience for those who treasure the quality of our experience.

Every so often, I'll add something new to my trading:  a different time frame, a new indicator, a different market instrument.  When I add the new element, I reduce my size to the point where P/L absolutely doesn't matter.  Then I see if I enjoy the new perspective; if it leads to fresh insights.  By taking P/L out of the equation, I can see if the trading is a rewarding activity in other ways.  If it is, I know it's worth including in the repertoire. 

Growing the trading repertoire is like growing the cat family.  Trading is most likely to be rewarding--emotionally and financially--if we make it personally rewarding.        

How We Develop: As People, As Traders

 

11/25/2025 - What if I told you that I had begun a romantic relationship and that, every day, my partner says or does something that I can't stand and I find myself becoming emotional and unsettled.  I come to you and ask how I can improve my mind frame in the relationship.  What would you say?

At some point, sooner rather than later, you would question whether this is the right relationship for me.  A promising, good relationship should not spend most of its time in conflict!  The answer to my dilemma is to find a more suitable partner, not to keep trying to change myself to fit into a situation that isn't working.

Now take that same reasoning and apply it to our trading.  If trading is leaving you feeling stressed, anxious, and frustrated, perhaps the answer is not to pursue psychological help.  Perhaps how you are trading doesn't fit who you are.  If your style of trading frustrates your most basic interests, needs, and strengths, then you will always struggle with markets.

If I were to adopt a true "scalping" style of trading where I was buying bids and selling offers and holding positions for seconds to a few minutes, I would become frantic and overloaded.  That style of trading does not fit the more analytical approach that represents what I'm good at and what I enjoy.  As soon as I step back from the moment-to-moment trading, explore cycles in market behavior, and align my trading with the cycles that cannot bring us higher or lower, I feel in sync with markets and trading becomes fulfilling.

We develop as traders the way we develop as people because our best trading is always an extension of who we are.  Tilt is often a sign that your trading is frustrating who you truly are.

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11/24/2025 - Every day, we exercise some part of our personalities and development.  The question is whether that exercise is planned and directed, or whether it is random and unplanned.  If we waste time routinely, we exercise laziness.  If we overeat, we exercise a lack of discipline.  If we reach out to others, we exercise kindness.  Everything is exercise.  What we do, we internalize.

So what are you exercising in your trading?  A true process orientation to trading is one that exercises our greatest interests and talents and that opens us to listen to and follow markets.  When we lack a rigorous trading process, we exercise the wrong functions, listening to ourselves rather than to markets.  Great ideas come to us when we are focused and study the right things.  Great trading exercises open-mindedness and flexibility--and our ability to live our lives with flexible open minds exercises our greatest trading abilities.  

In the long run, how we live our lives is how we will trade.

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11/23/2025 - How does expertise develop?  We begin as students and then we become apprentices to successful performers.  That is how medical students grow into interns and then grow into becoming residents and attending physicians.  It is how a freshman football player practices with the starters, helps them scrimmage, and eventually gets into games and becomes a starter.  It is how a beginning actress becomes a small role-player in a production, becomes a backup to the star, and eventually gets larger roles herself.  We develop expertise by developing professional roles.  Through that development, we gain the experience of training, but we also gain the expertise of being a true performer.  In the hedge fund world, a junior person begins as an analyst, sees how ideas are traded, grows into managing a "sleeve" of capital themselves, and eventually grows into becoming an associate portfolio manager and a full PM with their own team.

We grow through professional roles and from the feedback we get from our experience and from our mentors.

No one develops expertise in isolation.  In any performance field.

Much of the frustration encountered in trading has nothing to do with lack of control over emotions, lack of discipline, etc.  It is a function of a lack of training and mentoring--and a lack of opportunity to internalize the new roles and experiences of expertise.  Trying to improve your psychology while trading in isolation is like trying to improve your game as a basketball player without being part of a team.

The most promising thing a developing trader can do is form a pod with other developing traders and learn from each other and with each other.   

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11/21/2025 - The greatest part of our psychological growth occurs through social roles.  When we take on a role with others, we inevitably receive feedback about who we are and how we perform and we internalize that feedback.  When we take on many social roles, we absorb a wide range of such feedback and develop a broad sense of who we are and what we do well.  A child takes on roles with parents, siblings, and peers and then broadens their sense of self through roles at school, in extracurricular activities, in social groups, etc.  What is important in this process is that we internalize our sense of self through relationship experiences.  Everyone we interact with is a mirror, showing us something of ourselves.  In our work, our family lives, our social and community lives, we experience many mirrors and build a diversified sense of who we are.

If you understand this social role perspective, you can appreciate why solo trading is psychologically dangerous.  Trading is a challenging activity, and it can be an enjoyable application of our skills and talents.  But undertaken in isolation, it is a limited experience.  We operate in a relative vacuum.  We do not encounter fresh mirrors that stimulate new experiences of ourselves.  Over time, we become stale.  We do not grow as people.  Sometimes we attempt to fill that void by trading more and more, hoping that profits will provide us with the fulfillment and inner satisfaction that we lack.  We know how that ends up.

A major benefit of trading in a team is the opportunity to take on fresh roles as part of the trading process.  We mentor others, we share ideas, we enjoy the company of our mates.  At the firms where I work, an important part of the enjoyment and fulfillment traders experience in their work is in what they learn from others, what they give to others, and the roles they play within the team.  When there is fulfillment in those roles, there is no need to put all of one's self-esteem eggs in the trading basket and overtrade.  A rich personal life outside of markets and a broad range of roles within one's trading experience create psychological wealth--and that is what can help create trading wealth.  

The Power of Perspective

 

11/20/2025 - Recent markets have been a great example of how, across time frames, overbought levels that cannot push us higher and oversold levels that cannot push us lower lead to a covering of positions from trapped traders.  The psychology of trading comes, not from simply focusing on our own mindsets, but by entering the mindsets of other participants.

11/18/2025 - An interesting and valuable exercise to change our trading--and our trading psychology--is to shift our perspective on trading opportunity.  A major danger for active traders is that, in their desire to achieve, they do more and more and wind up overtrading, over-managing positions, and basically getting in their own way.  They clearly see a trading opportunity, but have trouble simply holding onto the idea or the position.  One thing I've observed over the years is that we tend to trade whatever timeframe in the market that we're actively watching.  Inevitably we see patterns forming and find ourselves reacting to those.  Thus, if we have a bigger picture view and watch the market tick-by-tick, it's easy to overtrade that view and miss out on our original idea.

The exercise to change our trading is to limit the number of trades we're allowed to place each day or week.  For instance, suppose I'm an active trader and now only allow myself to place one trade per day.  Wow; that pushes me to focus on my very best opportunities and my very best ways of trading those.  With only one trade available to me, I have to make sure it counts.  That prods me to truly allow the trade to set up, and it pushes me to avoid overtrading.  

The real perspective changer is to see how our P/L actually changes as the result of trading less and staying less glued to screens.  In my case, the profitability of trading has risen noticeably as I've let my ideas (and positions) breathe.  There is a big difference between the need to trade and the need to be profitable.  Often the first interferes with the second.

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11/17/2025 - How we manage our positions and our risk ultimately shapes our trading psychology.  Sound trading process builds a sound trading mindset.  Here's an important way in which that happens:

As I've worked on my trading, I've found it helpful to follow the lead of some of the best portfolio managers I've worked with and make a distinction between initial positions that I take in an idea and subsequent positions that get large in that idea.  The first position is small enough to weather ups and downs without getting stopped out.  There is a stop, but it's not close to the market.  The first position is my "investment" in the idea that I've researched.  It has a target, but also not close to the market.

The subsequent position is much larger and leverages the initial position once I've determined that the market is rewarding the original idea.  It has a much tighter stop and is based upon the market flows that are telling me that the idea is playing out.  Thus, if I have an initial long position and the market opens strongly with very positive TICK, I might go with that early strength and set my stop for that added piece (and perhaps the entire position) below the morning low.  There is a short-term target for this larger piece based upon the levels that I believe we should be able to take out intraday.  Those take-profit levels are entered into the market, allowing me to let the position ride.

What I've found is that, if my ideas are wrong, they're usually wrong pretty quickly.  I'm sized smallest at the outset and only get larger once the market confirms my view.  That keeps me in an opportunity mindset and keeps my losses contained, even as I pursue significant gains.

The important thing here is not to copy what I do, but to understand that trading psychology is something you can work on by shaping your trading process.  How you trade reinforces how you experience your trading.

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11/16/2025 - A measure I have found helpful on an intraday basis is an indicator typically viewed on an end-of-day basis:  the number of stocks across the NYSE universe that are advancing on the day versus declining.  (On the Sierra Chart platform, the symbol is $NISS).  When the market makes a new high or low or tests recent highs or lows, it's worthwhile seeing if the strength or weakness is confirmed across the universe of stocks.  Often, the largest stocks are the ones displaying the directional movement, but many shares are not confirming the move.  This can also be seen in the NYSE TICK statistic, which will show that a broad range of shares aren't confirming a move by trading on upticks or downticks.  Once again, the edge here is finding market participants who will be trapped when the buying/selling is exhausted.  Too often, traders are so focused on trend and momentum on the chart they're watching that they fail to look at broader market context and what is happening across market participants who ultimately move markets.

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11/14/2025 - We see with the recent price action in the U.S. stock market a sequence referenced below:  The market rises toward new highs (or may make marginal new highs), but a number of segments of the market fail to show meaningful strength.  Looking sector by sector, we can see that large-cap stocks (DJIA) made new highs recently, but small caps (IWM) lagged and many sectors stayed below their recent peaks, including the former leaders, technology shares (XLK).  This rotation and failure to broadly make fresh highs was a sign of exhaustion and now is playing out in active selling.  We will need to see some sign of the selling bringing in fresh buyers before we can think about any resumption of the upside.  The balance in the NYSE TICK numbers will give a good short-term clue as to whether lower prices attract higher time-frame, larger participants.

The broader point is that, when we look inside price action, we can detect the first signs of whether a move is likely to continue or reverse.  When we look across segments of the market, we can detect whether a move is broadening out or simply turning into a reallocation of existing positions.  How we trade needs to be a function of the type of market we're seeing.  Updating our perspectives each day--and sometimes within the day--allows us to trade flexibly and knowledgably.

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11/13/2025 - So often, the views we trade start with conviction and end in staleness.  We become anchored to our conviction and thus become less able to pivot when markets change.  A great trading process is to look at what you're trading with fresh eyes daily.  For instance, I recently transitioned to a small short position in the S&P 500 index market.  During the day and especially at the end of each trading day, I study the charts of the component sectors of the index, such as technology (XLK), consumer discretionary (XLY), etc.  I also study other equity indexes, such as the Russell 2000 small/midcaps (IWM); the NASDAQ Index (QQQ); the Dow (DIA); etc.  I use the Barchart website to identify how many stocks are making fresh one-month highs and lows and three-month highs and lows, and I use the StockCharts site to track the number of stocks producing buy and sell signals across various technical indicators.  In short, I want to see the market from many perspectives to see if my view is gaining or losing support.  In updating my view, I become prepared to hold my position, trim my position, add to my position, or exit my position.  

Looking at the market from multiple perspectives ensures that we can adapt to the ever-changing flows in markets.  The goal is to prevent your conviction from turning you into a convict.  Our views can imprison us, or they can evolve and help us navigate opportunity.  A key trading psychology strength is open-mindedness and the flexibility to strongly believe something and to be very prepared to shift that belief.