3/20/2026 - In his excellent book The Trader's Journey, Peter Robbins points out that most traders spend their time trying to establish an edge in markets--a "positive expectancy", but spend less time on "the second component of their edge, which is their ability to trade the strategy consistently and accurately" (p. 106). To change your trading, it's important to figure out whether your rules need adjusting or whether you need to work on the trading of those rules. A very valuable strategy is to investigate how your rules would have performed in different past market conditions. Often, rules that work in one kind of market environment fall down when trends, correlations, and volatility change. No rules work ideally in all market conditions. That is why it is important to first have metarules that tell you the kind of market we're in and then develop the rules that work in each market condition. Thus, you will have metarules that tell you when we're in a range market, a trending market, a topping market, a bottoming market, etc. Each market condition will have its own "playbook", enabling you to adapt to shifts in trading conditions. When you review your trading, you want to see if you indeed identified market conditions correctly and, if so, whether you made the adaptation necessary for that type of market.
Peter Robbins' observation about the ability to trade the strategy consistently requires that you be able to assess market environments consistently and adapt your trading processes to each market condition. Changing your trading means first identifying market conditions and then seeing if your rules for trading those conditions: a) were followed; and b) were profitable, if they had been followed. Every market day is like a new basketball or football game, requiring preparation for the contest and adapting decision making to the unique opportunities of the situation. Very often, traders lose money by doing what had made money before market conditions had radically changed.
========================
3/19/2026 - Successful discretionary trading is not subjective trading, just as successful discretionary medical practice is not subjective. The discretion of the professional is based upon rules and principles and those rules and principles are based upon research into what is helpful and what is not. The systematic trader automates those rules and principles; the discretionary trader adds to those rules and principles an element of judgment regarding the immediate situation. Thus, in my own field of psychology, there is a wealth of research regarding what people need to do to combat anxiety or depression. It is the discretionary job of the therapist to apply this research in the best way for a given client, keeping in mind what the client is ready for.
So how is this related to how we change our trading? Many times, we make subjective attempts to assess and correct what we have done, but none of it is grounded in rules and principles that have guided our past success. Every element of trading process should be rule-based and clearly written out: What constitutes an opportunity; how much capital should be risked on that opportunity; how trading that opportunity should be entered; how exits should be constructed; how stop loss levels should be calculated; etc.
Only once we have the various elements of trading process clearly identified can we then go back and see what we did well and what we could have done better. How can we be consistently profitable traders if we haven't grounded our decision-making in consistent rules? A big part of the learning process in trading is gaining enough experience, first in practice trading and then by trading small, to create the rules that bring you success.
We change our trading by first identifying what part of our trading needs to be changed.
========================
3/18/2026 - In trading, as in medicine, the right course of action to make improvements is to first diagnose the situation. If we're trying to change our trading, we first need to clearly identify what needs to be changed. The most basic distinction is: Do I need to change how I'm finding opportunity? (i.e., are my ideas wrong?) or do I need to change how I'm trading the opportunity that is there? (i.e., do I need to improve timing/entries/exits/sizing/expression of the idea/etc.?) How can we figure that out?
The key best practice is to examine closely what happens to your trades *after* you have exited them. Did your ideas generally work out, or were you right to get out when you did? Many traders examine their P/L and review markets, but they don't intensively re-view how they got into and out of the trade. As a result, they're in a poor position to truly know if they need to change how they come up with trades or whether they need to figure out how to better execute and manage the trades they initiate.
There's a principle in positive psychology that, when we make too much use of a strength, it can become a weakness. That was the case for my trading. I was so careful about risk management that I exited trades too early. Many of them would have worked out well if I had let them breathe. The answer was to initiate trades with smaller size and give them a good amount of room to play out. Then, when they started to work out, I added a second, larger clip to the trade that had a relatively tight stop. For instance, if we broke out of a range in my direction, I exited if we reversed back into that range.
This allowed me to get bigger in ideas that were showing promise, and it allowed me to not micromanage my trades. Most important of all, it changed the psychology of my trading. I now actually looked forward to my initial position going against me so that I might have the opportunity to get bigger in an idea I liked. This is a great example of how changing our trading can change our psychology.
======================
3/17/2026 - I'd like to take a step back and ask a question that comes before, "How can I change my trading?" That question is "Should I continue trading?"
I recently received an email from the spouse of a trader who was worried about the trader's history of emotional trading, blowing up, vowing to trade better, and then repeating the cycle all over again. That pattern was taking a toll on the relationship.
Please read the following closely: I have worked with dozens and dozens of highly successful traders. None of them has reached their success after patterns of emotionality and repeated blowup.
None of them.
Yes, successful traders have gone through painful drawdowns and, as we read in the Market Wizards books, they learn from those and turn their trading around. When risk-taking occurs again and again and again with emotionality and repeated losses, that is not a learning curve. That is not healthy. That is addictive behavior.
Do successful physicians learn by becoming emotional and killing one patient after another?
Do successful airline pilots learn by flying emotionally and crashing one plane after another?
Few people will tell you your trading is addictive. Not the person who wants you to hire them as their "trading coach". Not the person who wants to sell you their software or their trading seminars. Anyone who offers to "mentor" emotional traders who blow up again and again is something other than a mentor.
Trading addiction causes trauma. You can learn more about trading addiction through these articles and links and by asking these questions.
Changing your trading can mean changing yourself before you ever resume activity in markets. And maybe activity in markets is simply poison for you and your life and you should find work that makes you feel good about yourself and that helps you do good for others.
The worst trading loss of all is the loss of your happiness and the loss of those who care about you.
Do the right thing.
====================
3/16/2026 - How can we change the negative thought patterns that stand in the way of the solution-focused mindset described in the previous post? Fortunately, research in psychology provides us with ways to shift our mindsets. Craske and colleagues (2022) describe four exercises that research has shown increase our feelings of happiness and fulfillment. Those four practices are: 1) loving-kindness; 2) gratitude; 3) generosity; and 4) appreciative joy. In loving-kindness, we meditate on and rehearse the feelings of love and caring we have toward others. In gratitude, we rehearse feelings of appreciation for all that we have. Through generosity, we focus on bringing joy to others and through appreciative joy we find happiness in the joy of others. Many times, by focusing on who and what we love we can rehearse all four of these experiences. Spending quality time with my cats, for example, is a way of immersing myself in these feelings. The idea is to make these four experiences regular parts of our daily life.
There are many cognitive therapy exercises that help us combat negative thought patterns. It turns out, however, that we can best combat the negative by rehearsing and building the positive. It is much easier being constructive and solution-focused in our trading if we've been actively positive in our daily lives. It's also a great example of how building spiritual strengths helps us overcome negative tendencies. We best achieve a positive trading psychology when we bring positivity to our lives.
=====================
The first key to changing your trading is to prioritize the changes you want to make and focus on one change at a time. Change requires concentrated effort, and it requires consistent effort. When we try to change everything, the odds are good that this is coming from frustration, not from a sustainable plan.
As described earlier on the blog and in the Positive Trading Psychology book, the first step toward change is the solution-focused recognition that the odds are good that the change you want to make is already happening, but on occasions you're not recognizing. When your trading problems are not occurring, you quite possibly are doing something right and already making the change that you want to see more consistently in your trading. So that is why it is important to journal and analyze occasions when you trade well and figure out how you did that. For instance, a more focused preview of markets and preparation of your trading may have prevented you from overtrading. That is super important. Once you recognize this, you can turn the focused preview into a consistent daily process.
The solution-focused mindset is a game-changer. We don't have to make ourselves totally different. We simply need to be more consistent in being who we already are at our best. In the next post, we'll look at how you can achieve that consistency.