Key Ideas From Trading Psychology 3.0

 

7/15/2026 - The book Trading Psychology 2.0, published in 2015, was an effort to take trading psychology beyond the usual themes of controlling emotions and avoiding impulsive behavior to a look at the best practices of the successful traders I was working with at professional trading firms.  A little more than a decade later it's time for an update.  A number of excellent books have come out during that time detailing trading success.  I've also learned a great deal about the specific trading practices that contribute to success and especially the overarching processes that help traders adapt those practices to ever-shifting market environments.

At the heart of the new 3.0 book will be a good old fashioned literature review.  In the academic world, where I've worked since the 1980s, one begins a research project with a review of all the important works that have been published, the answers they provide, and the questions they leave open.  The idea is that, in true science, knowledge is cumulative:  we build our understanding step by step, contribution by contribution.  Trading Psychology 3.0 will review a large number of books written by successful traders and successful trading coaches to highlight what we know about great trading--and what still remains to be discovered.

One key idea from the 3.0 book will be the degree to which profitable trading is process driven.  It is far more than searching for patterns to trade and setting stop loss points and profit targets.  Process oriented trading incorporates a set of routines that examine markets and track the evolution of opportunity and an entirely separate set of routines to review performance and track improvements that have been made and that need to be made.  It is the consistency and intensity of these processes--many of which are performed by teams in professional settings--that shapes profitability.

A forthcoming book by Brian Mazza, called Nothing Changes if Nothing Changes, draws upon the structure of physical development to identify what we need to do to train success in all areas of life.  The idea of developing our trading as a training process is a powerful one, where the goal is not just improvement but transformation.  If how we prepare for trading each day is not a true workout can we truly expect to transform ourselves as traders?