Info!! How To Interruption Our Worst Trading Habits

Surveying the traders at SMB, Bella recently reported that the number i work they had during the past times twelvemonth was forcing trades.  That is, they failed to hold back for trades to properly laid upwards too instead tried to front-run the patterns they were trading.  Bella hence offered iii ideas for traders looking to amend their patience too trim their forcing of trades.  Those ideas include journaling, studying your "Playbook" of best trades, too taking breaks to speak amongst other traders.  Note how all of these strategies involve getting one's olfactory organ out of the screen, stepping back, too gaining perspective.

What the traders are working on is self-control.  Generally, here's what happens when traders forcefulness trades:

1)  A province of affairs occurs that the trader personalizes inwards about manner.  The marketplace moves too the trader blames himself/herself for missing the move.  Or the trader is stopped out too is concerned almost taking a loss.  The province of affairs gets the trader P/L focused too self-focused too no longer marketplace focused.  This is really important.  Psychological problems inwards trading typically stimulate down amongst a shift of focus too a loss of marketplace focus.

2)  The personalizing of the province of affairs leads to an emotional reaction.  Generally that reaction is i of frustration, fear, or overeagerness/overconfidence.  That emotional reaction represents the body's struggle or flying answer to a perceived emergency too leads us to human activity rather than rest patient.  Once nosotros personalize a situation, it's no longer almost the trade.

3)  The emotional reaction leads to reactive decision-making.  Out of frustration or fear, nosotros take away keep trades nosotros shouldn't, abandon expert trades, etc.  Many times, when nosotros review the province of affairs later the marketplace close, nosotros wonder how nosotros could take away keep been hence foolish.  The trading conclusion was non made for trading reasons; it was made to contend the crisis that nosotros had talked ourselves into.     

Once nosotros empathise this three-step sequence, nosotros tin laissez passer on the axe larn to a greater extent than aware of our ain patterns too disrupt them earlier they atomic number 82 to misfortunate decisions too actions.  For example, I know inwards my ain trading that in i trial I'm thinking almost myself, my rail record, my P/L on the day, I'm non inwards the zone.  At that point, the focus needs to shift from the marketplace to my ain processing of events.  By taking deep breaths, slowing myself down, placing the province of affairs inwards perspective, too returning to the marketplace amongst fresh eyes on opportunity, I forestall the initial work from cascading.

Very often, nosotros recognize our work patterns past times identifying signature negative thoughts and/or feelings:  ones that recur inwards marketplace situations.  It's almost every bit if a script is playing itself inwards our heads.  When nosotros thought the script every bit the problem, non the market, nosotros non solely opened upwards ourselves to patience; nosotros too exercise a province of affairs where nosotros tin laissez passer on the axe purpose our patient fourth dimension to reinforce novel too constructive ways of processing marketplace outcomes.

Further Reading:  Perfecting the Pause inwards Our Trading
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