4/15/2025 - A bit later this week, I'll be returning to the Syracuse medical school where I teach and introducing psychiatry residents to research-backed ideas on how we can accelerate changes in thinking and behavior. A key concept from the research literature is that we cannot make lasting changes while remaining in our normal, habitual states of mind and body. Emotional arousal and fresh experience open us to change. A major shortcoming of our trading psychology efforts is that we review performance and set goals without transforming our consciousness. In upcoming posts, I will share my experience with intensifying focus/concentration and processing trading lessons while in a sustained switched-on mode. I strongly suspect that just as important as what we rehearse is the state of mind of our rehearsals.
4/14/2025 The best way to work on your trading psychology is by cultivating your intentionality: your ability to sustain purposeful action. The mind is like a muscle, and it becomes fatigued. When our minds become overloaded, the result is distractibility and the inability to efficiently pursue goals. Becoming emotional is often a result of this problem, not the cause. By dividing your trading day, week, and month into discrete units, setting goals relevant to those units, and refreshing as you move from one time period to the next, you maximize your brain's ability to stay focused on your best trading processes.
What would happen, for example, if you were an active trader and divided your trading day into morning (NYSE open to 11 AM ET); midday (11 AM ET - 2 PM ET); and afternoon (2 PM ET to NYSE close)? Each of these time units would be treated as a separate trading "day", with their own preparation, review, and goals. Most important, there would be time in between these trading "days" to refresh attention and focus, learn from the most recent action, and reset. If each trading "day" had its own, unique P/L, then twice daily you would reset P/L and frame fresh goals. Breaking up the day in such a fashion, frequently resetting/reviewing, and setting new goals, how likely would it be that you would lapse into emotional trading and go on tilt? How likely would it be that any such lapse would extend through your day? When we make time intentional, we build our intentionality and gain greater control over our trading--and our trading psychology.
4/13/2025 - For traders, the best mindset is a set mind. Notice that I'm not suggesting that the best mindset is a *settled* mind. The idea that successful traders trade in a Zen-like mindset of peace is contradicted by everything I've observed while working on trading floors at hedge funds and proprietary trading firms. A set mind is a highly focused mind, a highly intentional and alert perspective. That is the mindset of any competitive performer; it is the mindset of the best military units. Switched on, processing and responding quickly. From that perspective, what you do during your morning preparation for trading can either set your mind or distract it. What would happen if traders made use of brainwave biofeedback exercises to sharpen their perception and thought before entering markets? What if the brain needs warm up exercises every bit as much as the body before an athletic contest? Among professionals, trading psychology is never about controlling emotions. It's about sharpening focus and achieving the mindset of a set mind.