10/30/2025 - Maybe the most difficult question we have to tackle after our trading blows up is whether trading truly is meant to be our path. We might not truly know that until we take the steps below, get proper training, undergo intensive practice that builds positive habits, and truly internalize sound trading processes. What we find during this re-education is that the right kind of trading either interests us and gives us energy or is a drain on our mental and emotional resources. Each of us possesses signature strengths: abilities that capture who we are at our best and that inspire us. Trading may not capture our greatest strengths and might even thwart them. If we're wired to be emotionally connected with people and help them or if we're wired for physical challenge or creative, artistic expression, trading will likely frustrate who we are as people and prove to be unfulfilling even when we make money.
The goal is not to trade.
The goal is to follow your bliss, because that is the path that will open your doors in life.
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10/29/2025 - If you hope to return to trading after a traumatic blow up, the key will be to return in a new way and in a safe way. This means beginning afresh, with training and mentoring and exploring markets and ways of trading markets that actively engage you and that fit with your interests and strengths. Very many times, traders blow up because they put their capital at risk without the proper training and guidance. They have not learned from mentors, so they don't possess edges in different kinds of markets.
Once you get the training and mentoring to trade in new and promising ways, it is important to begin trading in simulation mode and then with small size so that you turn good trading into habit patterns. Only repetition and practice can accomplish that. To repeat the point below, the idea is not to try to make yourself disciplined, but rather to make good trading so habitual, routine, and automatic that you won't need to impose discipline on yourself.
If you're trading because you need to make money right away or because you need the thrills of risk-taking, then you're likely to put yourself on yet another blow-up path. Trading out of need is a formula for overtrading and impulsive trading.
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10/28/2025 - So what is the next step in recovering from blowing up our trading accounts? Once we step back from trading and deal with the hurt we've created--connecting with others, taking care of ourselves--we have to come to terms with what we've done and why we blew up. It's not coincidence that every major spiritual and religious tradition addresses the issue of repentance. To repent is to look at what we've done, truly acknowledge the painful consequences of our actions, and vow to never repeat those mistakes. Our emotional/impulsive/tilted trading may have hurt our relationships, our health, and of course our financial well-being. Facing all of that and experiencing the pain and regret from our actions is a powerful motivator for change. In essence, we hit bottom and get to the point where our priority becomes "Never again".
It is only after we come to terms with the consequences of our faulty trading and make amends to those who have been impacted by what we've done (and how we've done it) that we can even consider returning to markets. More important than returning to trading is committing ourselves to never make the same mistakes that brought us to this point.
And how can we prevent that? By making sure there are always things in our lives more important to us than P/L. By making sure we have income and savings to cushion us if trading loses money. By making sure that we have a trading process so well learned and internalized that it becomes second nature. It is not discipline that can successfully bring us back to markets; it's the power of habit--and turning our best trading into our most automatic routines.
We can only start over if we retrain ourselves.
More on this to come...
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10/27/2025 - Let's take a look, step by step, at how people recover from trauma. Trauma occurs when people's lives are shaken up. Their security is lost; their future is threatened. Painful outcomes intrude in their day to day thoughts and feelings, disrupting mood and outlook. Trauma is a word we associate with stress. A traumatic stress is one that occurs when our normal lives are threatened.
It's important to understand this, because it helps us understand why the first step in trauma is to remove ourselves from the immediate situation causing us stress and placing ourselves in the most supportive, secure environment possible. Connecting with those who care about us; re-establishing a normal routine in life; focusing on activities that are rewarding and fulfilling: all these help us return to a state of greater security.
When we have helped create our traumatic stress through addictive/impulsive trading, there is something else that can begin our recovery. It is not a coincidence that the first of the twelve steps of recovery among alcoholics is "honesty". We need to own up to our roles in creating our problems and our hitting bottom. No excuses, no avoidance. We take responsibility for our actions at the same time that we seek support and routine. Ironically, that can be the hardest step in bouncing back, but also the most promising one. Once we take responsibility for what we've done, we re-establish the sense of control that allows us to bounce back and turn things around.
More to come...
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10/26/2025 - I have received a number of emails from traders in crisis. They have lost money, and they have lost their dreams of success. Instead of providing fulfillment, their trading has led to pain and anguish. A large part of this pain is due to the fact that they blame themselves for their failure. They recognize that they have not followed their rules and they feel that they have betrayed themselves. In reaching out, they ask the difficult question, "Should I stop trading?"Here is where being a practicing psychologist is different from being a trading coach. A trading coach typically tries to help you with your trading. A trading coach is invested in you continuing your trading because that continues your work with them. A psychologist is focused on your health and well-being and that may or may not include trading.
Suppose we replace the term "trading" with the term "drinking". A person could say, "I've tried to have a good time drinking and I want to go out with my friends. I've had too much to drink at times and so I set rules to limit and control my drinking, but lately I've broken all my rules. I wrecked my car and lost my job. Should I stop drinking entirely"?
Well, that puts our trading problem in a new light. We can become dependent on anything that produces big highs--and that dependence can create deep lows. Indeed, our dependence on trading can create traumatic consequences for us, as this post points out. In the case of drinking, it's clear that we need to take two steps: 1) stop drinking; 2) get help for the traumas our drinking has created. That first step of stopping drinking and getting help is always the hardest. That's why people with drinking problems who have hit bottom often reach out to groups such as AA--for support as well as advice and encouragement. Connecting with others in healthy ways replaces the drinking.
So, if we've been trading impulsively and addictively and breaking all our rules, should we continue to trade with ever more vows of "discipline"? Of course not. We need to give ourselves time to heal from the traumatic consequences, and we need to find others who can support us in that healing. Only after that period of healing has occurred should we consider returning to markets in a different and healthier way. The goal is not to trade. The goal is to live a happy, healthy, fulfilling life.
The first step is the hardest, but it can also give you energy, because it can be the first step toward a new life.
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