6/28/2026 - A key element in positive trading psychology is ensuring that your trading process draws upon the values and interests that bring your greatest happiness and fulfillment. In other words, trading should be an expression of strengths that have already provided you with success, joy, and meaning.
Here's a personal example: What gives me the greatest well-being in life are long-term commitments to what I find meaningful: a romantic relationship; having children; raising my rescue cats; helping people as a psychologist. Being a significant part of the lives of others is the source of my greatest fulfillment.
At various times in my life I've tried very active, short-term trading. It has taken a very short time for me to realize that my passion lies elsewhere. I enjoy discovering and making good trades, but it feels as though something is missing for me if that's all I'm doing.
Conversely, I *love* research, finding new things, and sharing them with others. That brought me to the academic world and is a big part of what is driving my latest market project, which is detecting patterns of breadth and market movement that accompany big trend shifts in the stock market. That project is so interesting to me that I devote many hours each week creating and analyzing databases covering many years of market activity. Sharing my findings with others who are equally passionate in their discovery process is tremendously fulfilling.
And applying the research to participate in big market trends is immensely gratifying. Not because I love trading per se, but because I love discovery, sharing discoveries, and seeing discoveries validated. It's great to be passionate about trading; also great to be passionate about investing oneself in markets and sharing those investments with others who are immersed in creative discovery.
What makes us most successful and fulfilled in markets is an expression of what makes us successful and fulfilled in life.
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6/26/2026 - Why is it that top performing traders who lead teams or who describe their "setups" and trading style online--even walking people through their trades--can't produce the same level of success among followers that they have had? If trading can be boiled down to rules, patterns, and setups, why can't Market Wizard levels of success be replicated?
There is a parallel phenomenon in psychology. Leading therapists map out their therapy in workbooks and manuals so that patients can overcome their anxiety, depression, etc. using the best practices of best therapists. The problem is that it doesn't work. The advice is sound, the exercises are evidence-based, but there is something to live therapy that cannot be replicated in a self-help guide.
And how about simply programming the top traders' setups and letting the computer do the trading? Or programming the computer to take the role of therapist? Why doesn't that work as well as live performance?
So much of trading success is based on what people trade, not just how they trade it. So much of psychotherapy's success is based upon how and when it is applied. When there is true mentoring, a person learns to replicate not only what the mentor says, but *how* they apply it. The expertise of the mentor is captured in how they do what they do. A painter could verbally describe all their strokes and colors, but no one would become a world-class artist by simply listening to such descriptions.
We learn by copying the masters. We broaden our learning by working with multiple masters. We develop our own style when we integrate the lessons from those masters. Trying to learn on our own from books, videos, and websites doesn't work. If it did, we'd see many more Wizards and masters. No "trading psychology" can correct the injuries that result from learning a performance field the wrong way.
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6/25/2026 - Professor Ed Diener, in his above quote, points to an important insight from his research: Happiness is a process. It is not just an emotional state that we sometimes experience; it is something that we *do*. Happiness is actually a combination of two emotional states: joy and fulfillment. We are truly happy when we are immersed in what we love doing and in what is meaningful to us. This is why relationships are such powerful vehicles for happiness: they can make us happy and they are deeply meaningful.
Many of our problems occur when we lack happiness in our lives and seek "feel good" activities as a substitute. That is how we can end up eating and drinking too much, how we can become involved in drugs and other activities that feel good at the time, but are ultimately empty in terms of fulfillment. What is fulfilling is what speaks to our values: what is most important to us. It is what speaks to our souls.
Overtrading occurs when we lack fulfillment and turn to trading to fill our voids. It is not merely a lapse of discipline. Rather, we are missing something in our lives and are trying to make up for that by engaging in the thrills and profits of trading. Of course, that ultimately creates losses and an even deeper sense of emptiness. Conversely, many of the most successful traders I've known work closely with others--often in teams. They enjoy the challenges of trading, but they also find the rewards of teamwork deeply satisfying. For them, trading is more than exploiting setups and trade ideas. It is a way of connecting to the aspirations of others and sharing aspirations with them.
When we read the Market Wizards interviews, it becomes clear that the happiness they find in trading is not only a place; it's a process. They love to learn, they love to dig for opportunity, they love to learn with others and from others. Trading, for them, is more than a feel-good activity. It is a deep expression of who they are.
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6/24/2026 - In the Positive Trading Psychology book, I go into detail regarding the use of neurofeedback (real time feedback about our brain wave patterns) and its application to trading and trading psychology. The key idea is that, when we learn to identify the brain wave patterns that accompany focus and good trading, as well as the patterns associated with frustration and impulsivity, we can ensure that we truly only trade when we're "in the zone".
What makes biofeedback especially helpful is that we typically see changes in our brain wave patterns *before* we are consciously aware that we're losing concentration, becoming frustrated, etc. Once we see that our brain waves are no longer in our zone, we can step back and engage in exercises (such as meditation) that will return our focus. That is proactive trading psychology: working on our problem patterns before they actually occur.
I have also used real time heart rate feedback from the Fitbit watch as a way of monitoring calm vs. agitation. Increased variability in heart rate readings is typically associated with poorer cognitive focus. This often occurs at times of distraction and frustration, not always connected to markets. Starting the trading session with a meditation routine can be useful in defusing such frustration.
The smartwatch also measures the quality of sleep each night, which I have found to be correlated with my ability to sustain focus. These real time readings allow us to adjust our trading to our state, avoiding trading when we are not fully calm and focused. Real time readings also help us identify what we need to do to start our days in the zone. For instance, I know that drinking alcohol in the evening leads to lower sleep quality that night, which in turn leads to difficulty in sustaining concentration. I also have learned that going to bed an hour earlier than usual and waking up earlier leads to better sleep quality and improved productivity in my morning routine.
Traders are like athletes in training. We are most likely to perform at our peak if we keep our bodies and minds at their peak. We don't have to wait for FOMO, greed, and fear in order to work on our psychology, and we can improve our psychology even when we're not beset with FOMO, greed, and fear!
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6/23/2026 - One of the great tragedies in the trading world is that trading psychology has become equated with the psychology of beginning traders, thus focusing on such things as discipline, emotional control, fear, greed, and frustration. To use the analogy I often turn to as one who teaches at a medical school, it is as if we were to discuss the psychology of the emergency room physician in the terms that apply to beginning medical students. Of course the beginner in any field has doubts, needs, ambitions, etc. and those can color decision-making. What makes a professional a true pro is that they have moved beyond those initial self-doubts and concerns and now can focus on the challenges of peak performance.
An area of psychology that applies to the pros is the ability to access intuition in generating trade ideas. Intuition is implicit or tacit knowledge: it's what we know, but don't know that we know. It shows up as gut feelings and flashes of insight. Intuition comes to us; it's not something we can manufacture upon demand.
There are, however, things we can do to access and activate intuition. The more things we see, the more things we can connect. That is why, in the interviews of the Market Wizards, we find that so many of them spend hours and hours reviewing charts and markets. They are feeding their heads with example after example, confident that intuition will capture the patterns of strength, weakness, reversal, and continuation.
Because their review is conducted in a state of intense focus, the successful trader is not only seeing more things, but processing them more deeply. The quality of focus--its sustained intensity--fuels the generation of intuitive insights. To the outside observer, it simply looks as though the Market Wizard works harder than others. It's more than that, however. What makes the magic of a Wizard is how they work--and what that work generates in terms of intuitive learning.
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6/22/2026 - When a psychologist/therapist speaks with a person, the truly important themes emerge when there is a discrepancy between *what* a person says and *how* they say it. The mood and tone and body language suddenly don't fit with the meaning of the message. That is the first sign of potential conflict, and it signals an opportunity for the therapy. Growth occurs when we are physically, emotionally, and cognitively aligned. That is when we're most open to absorbing new meanings from life and pursuing fresh sources of purpose.
In markets, trends persist when there is an alignment between the behavior of the parts of the market and the market as a whole. When the components of an index begin going their own way, that is an early sign that the market sector is losing alignment. The tide is no longer lifting all boats; the winds are shifting. Changes occur within the alignment of the market before those changes manifest themselves as clear price reversals and new patterns of movement.
Listening to the market the way a therapist listens to a client--carefully gauging not only what is happening but how--allows for flexible trading. Conviction makes convicts: We become trapped by what we attach ourselves to. When we listen with an open mind, the subtle shifts in market behavior become clear.
The meaning of market action lies in *how* it gets from Point A to Point B.
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