Anxiety.

Anxiety is the worst thing we can experience as traders, and it can ruin us. When we as traders do well we increase our risk. And when we start losing day after day, then our anxiety goes up, too. This pushes us away from good trading, the kind that’s planned and based on rules, and pulls us towards the kind that’s emotional.

"The expert performer does not think positively or negatively about a performance as it’s occurring. Rather, he is wholly absorbed in the act of performing."*

"Thinking positively or negatively about performance outcomes will interfere with the process of performing. When you focus on the doing, the outcomes take care of themselves."*

We’re supposed to be doing what we've planned to do. Trading based on a plan and rules will never cause a trader to be overwhelmed with anxiety. If you do what you plan to do, and you do it no matter what the outcome, then you’re always going to do the best you can. By going over each trade we know what we did well or badly. By tracking bad days we can see what setup and what kinds of trades are not working, and this becomes our learning process.

"When you are your own trading coach, you want to get to the point where you actually value good trading ideas that don’t work."*

Each trade is a lesson. The best lessons are actually bad trades, but it’s up to us as traders to take something away from them and learn. It isn't necessarily always our mistake that made it a bad trade. It might be a change that occurs in the market. It might be the news, something that just happened and moved our trade from green to red. But, we must be prepared for outcomes like this every single time. That's why we have stops, plan and rules. They keep us from getting anxious and reacting emotionally.

"That good losing trade is either telling you something about the market, something about your trading, or both. Your task is then to take a short break, figure out the message of the market, and make an adjustment in your subsequent trading."*

*LESSON 18 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Fear.

Every single trader experiences fear. Some traders feel it all the time, some only experience it early on then get rid of it totally, and some feel it only at certain moments like I do. I generally feel fear only at the moment when I get into the trade or just before entering the trade. I don’t like this feeling. But I’m very curious about why I don’t feel fear before I get out of the trade or before I should decide to get out of the trade. I’m starting to see that I’m missing a piece of the puzzle. I feel like I should feel fear before getting out of the trade or just before I should get out of the trade. Let me explain why that is, both to myself and to you my readers.

I’m afraid when I’m taking a trade because of the risk of losing, but I do not feel it when I’m getting out of the trade. When I’m out of the trade on the stop loss I do not feel fear either. When I’m stopped on the green side of my trade, but not on the target I’m not afraid. When I’m stopped at break even I still don’t feel fear. But I should. Why? How many times has your trade been very green, and you, based on your rules and plan could only move the stop to b/e and then you were stopped? I was in a situation like this many times, but if I would have felt fear and realized what was going on, I probably would have gotten myself out of the trade, because of the fear at the green side. How many of you have been in a situation where you took a trade against the rules, but you didn’t get out of it because it was a little green, and then all of a sudden you were stopped? This was a moment when you should have felt fear and gotten yourself out, but you did not. Same here, I’ve done the same many times. Why?

"When we feel nervous in a trade or feel nervous about putting on a trade, it’s important to know whether our response is one of fear or one of anxiety."*

"Fear is the friend of trading when it points to genuine sources of danger: a felt discomfort with a trade will often precede conscious recognition of a change in market conditions."*

Feeling fear is very important and very helpful in my opinion. If I trade with no emotions I don’t know what I’m doing. We all have emotions in our trading, the point is to know how to use them. Nobody knows if a trade is going to work or not, NOBODY. The not knowing shouldn’t make you nervous because that’s just a given, but being active, being awake, being in the zone, that means experiencing emotions like fear. If during the trade I follow the market and my rules and plan, then thanks to my feelings I can trade to the best of my ability.

"When you are your own trading coach, your goal is not to eliminate or even minimize emotion."*

So what are we to do in order to start feeling fear as a tool, during the trade? How do we feel it and use it to be sure about still being in this trade or not? When we drive a car and any kind of light on the dashboard goes on, we don’t ignore it. Being awake and in the zone during the trade will allow us to see figurative lights blinking on the screen to keep us feeling fear when necessary, to help us get out of the trade when it’s right. This is what I’m missing. I have rules for when to get into the trade and when not to take a trade, but I don’t have rules, feelings, for when to see the warning signs. I need to hone my fear instinct to recognize that “Voila!” moment where I just notice something in front of me and it can trigger my need to reexamine my trade.

"When nervousness hits, the first thing you want to do is simply acknowledge that fact."*

"Fear is a warning light; not an automatic guide to action. It is our mind and body’s way of saying, “Something doesn't look right.”"*

I always work on talk-aloud mode, but that’s before I take a trade. Now, I think it’s time to be more fearful and look for "questions" that might lead me to get off the trade. I need to keep talking to myself and voice the “why” observations in order to recognize them as potential scary scenarios. Fear can be very helpful if it’s used properly, as long as it’s not turned into anxiety.

"You can use your fear as a cue to examine your trade more deeply and adjust your confidence in the idea, up or down."*

"If you can use fear in this way, even negative emotions can become trading tools and even friends."*

"Confidence doesn't come from an absence of fear; it comes from knowing you can perform your best in the face of stress and uncertainty."*

*LESSON 17 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

HANG IT UP!

This is just incredible how I've been feeling these last couple of months, and not in a good way. It’s incredible because this chapter is the next one to be covered in my blog, but it’s also just because of how I feel. January started the year off great, February was flat in my trading, and March put me down. It’s now just the second half of April and I’m asking myself, why not hang it up? Last year took a lot of hard work to get to where I thought I would love to be. I worked hard and put myself in a position that looked great for the future, but in March I took so many steps back that now I don’t know where I am anymore. I feel like I’m going nowhere. I’m tired of being wrong and of losing money. This chapter is so exactly about me that I just want to copy it and sign below.

"If you are meant to do something—something that speaks to your talents, skills, and interests—you will display a significant learning curve in the first year or two of effort."*

And today thinking about my last two months or so, and reading this chapter, I think about possibly hanging it up.

"Let’s face it: for many, there is a time to give up trading. I know quite a few traders who have been at it for years and have never developed the skills (and perhaps who never had the talent) to simply reach a point of competence where they cover their costs."*

"If such a learning curve is not apparent, it’s probably not your calling. Hang it up and pursue something that genuinely captures your distinctive abilities. It’s not quitting, it’s not being cowardly. It’s cutting a losing position and getting into something better: a course of action that is as sound in life planning as in trading."*

The effort I put into trading is keeping me from acting on these thoughts and feelings. The goals that I set for myself and my vision of whom I’d like to become are stronger than the recent disappointment.

"Discouragement tells us that, at that moment, we perceive an unbridgeable gap between our real selves (who we are) and our ideal selves (who we wish to be)."*

"Our real selves are always distant from our ideals: the question is whether we perceive ourselves to be competent to bridge the gaps."*

I ask myself what is wrong. And it might be that my plan and the setups I trade are no longer present in the market the way they used to be. Perhaps the market patterns have changed, so what was working for me in the past is not creating the same potential today. And all these things that I’m experiencing and feeling tell me that maybe I should temporally hang it up. How many of you are in the same place? I was thinking about expectations as well, but this is not the problem in my situation. If you are looking to make money every single day, you will be severely disappointed within one week. Here this isn't the case with me, because I can wait for a good setup all week long, and take only one trade per week if there is just one to take. Another thought is that maybe I’m just overloaded. This is the type of situation that may put me into a psychological burnout.

"Burnout occurs when we feel that the demands on us exceed our resources for dealing with them."*

"Maybe it’s a reflection of changes in markets; maybe it’s a sign of unrealistic self-demands or a signal that life is out of balance."*

There’s nothing else for me to do but find out where the problem is. It could even be the market, so then the solution will be just reducing the risk.

"Reduce your risk, reassess your trading, and you preserve your capital and turn discouragement into opportunity."*

If the problem is connected with my expectations the best solution is to keep them low. This will make it easier to achieve each daily goal, by making it small and realistic.

But it can also be, and honestly I think that I've found the problem in this already, that I've put everything into trading and I miss having a life.

"An excellent strategy for achieving psychological diversification is to have significant life goals apart from trading."*

It is again time for me to embrace change. Change is the best way of staying positive and on topic, and having goals.... Change was the best way for me to get better as a trader, and now I have to change again in order to get back my good feeling about trading.

*LESSON 16 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

"trading under control instead of pushing"

I've been sharing with you how many and what kinds of mistakes I make as a trader. The worst, my most common, the one that put me into the biggest hole was to push myself to constantly trade. Yes, I am a trader and yes, I make mistakes, but this one is the worst. Trying too hard to make money, trading to find trades, is a terrible thing to do. I was doing this until I realized that it was working against me. It wasn't easy to figure out what I was doing wrong. It wasn't easy to understand why I was doing it, but as was the case with all of my problems and mistakes, thanks to all the psychological books, I got to the point where I knew what I had to change. As soon as I realized that I was trading without rules that should be used in every single setup given by the market, I stopped trading and moved to setting my rules. These were not only rules for when to enter and where my stop or targets are, as these are the easiest ones. The difficulty was with rules for when not to trade. Rules for risk management were the worst I had, and this was the main thing that had to change.
"When rules are repeated and followed over time, they are internalized and become mechanisms of self-control."*

"The right trading behaviors start as rules and evolve into habits."*

And they did change. I set up rules for all possible situations I might be served by the market. During my SIM trading the main thing I was trying to follow was not the market but my rules. And I finally stopped losing by making sure to check all my rule boxes every single time, for entry, stop, target and timing. I realized that I plan and trade well when I’m relaxed, not frustrated, and I don’t focus on trying to make money or trade to make money. I realized where the problem was, but also I realized that I started to change and was following my rules religiously and getting to the point where I was planning instead of pushing myself to trade no matter what.

Thanks to psychological books I knew what to do and when:

"1. Make a list of your most important trading rules."*

These are rules for preparation, entry, stop, targets, days when not to trade, moments where to take a break and the time or situation when to stop for the day. I have rules for good setup and bad setup. I have them on the wall close to my screen, so even though I know them inside out, I still look over and check every single time, whether I see a good setup or not. Rules for taking breaks are very simple, like when it’s lunch time I just stop - period. I go out and it’s that simple. I’ve decided that days when I used to lose the most in the past, like FOMC days, are simply days off for me. I love days off!

"You can’t expect to internalize trading rules if you haven’t first made them explicit."*

"2. Create a routine before trading begins to review the rules."*

Visualization - this is why we need to do it. I prepare my charts for the day, but then I prepare myself for the trading day as well. By wearing headphones that stream calm music I visualize my day, my setups and my trades. My eyes are closed, but my trading rules are front and center in my mind. By doing this is I check the list in my brain, I repeat them inside out, so I always remember them every single time I have to check them.

"The more you think about rules and rehearse them, the more they become part of you. Repetition creates internalization."*

"3. Create a break in your trading day to review your rule-following."*

My midday breaks are different. Sometimes I just have a break to check if I’m doing well during the day, then I check my actions so far and just simply take a lunch break. Sometimes the day is not the best, it’s already a losing day. If I met the rule of loss limit for this day, then my midday break turns into being done for the day. I then write my notes, and relax for the rest of the day. I will not sit in front of the screen and look at what I’ve been doing or what I’m missing, or what I did wrong. What’s done is done and can’t be changed. There is always the next day. Also, when by midday I’m green and out of my trade, this time becomes my end of the day as well. I have a simple rule - one good trade per day!

"4. Use the rules at the end of the day as a report card."*

This is the best thing to do, set a goal for the next trading day. Simply put, if you don’t know what your goals are, or what they should be for you, check your trading day. If you find mistakes, set a goal for the next day to avoid making the same mistake again. On the other hand, if you did great for that day set a goal to repeat the same good thing the next day. Goals are always supposed to be positive. Write them down with positive words. For example, if you took a trade today with too big a risk then your goal can be, “I will watch my entry place to have the smallest risk possible” or if you had a super trade today with very extended targets then your goal can be, “I love my target placement and I will wait for targets to be hit.”

"Good self-coaching is the ability to correct trading problems. Great self-coaching is to develop routines to prevent problems from occurring in the first place."*

*LESSON 15 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Journal.

I've shared about my journal before, but this post will be very specific about why I have a journal and how I keep it. I had always taken notes from the very beginning of my trading days, but those notes were about stocks I was watching, price patterns, price action, trends, and many other things based on viewing charts. Now after over three years of trading I recall that this type of journal really wasn't giving me anything, it was a total waste of time. Thanks to the last few years of experience and thanks to many books that I went through, I started to learn how a journal is supposed to look and why I need it. And this book* had the biggest impact on my trading journal. I realized that my journal has to be something that both helps to find my mistakes and the problems with my thinking, and also helps me fix those problems. So my NEW journal started to have info about the market and what was happening based on my plan and rules. It had info about my feelings while watching what’s happening as well as at the end, and included all the consequences of that day’s thought patterns and of my actions.

Having a journal like this became very helpful with going through the day. I found that I love to use it with many aspects of trading. First off, I check myself on each and every single setup. I control my emotions, and work based on what I see not what I feel. Secondly, my new journal has helped me very much with my goals. After setting a goal for the day, week, or even month, I now have a way to check if I’m consistent in doing things towards achieving it. And thirdly, a journal like this happens to be the best way to check every single trade, the setup I was considering or did take, and whether I’m really following my rules and plan. There is no other way I would remember on Friday what I was doing on Monday. During the weekends I always review my journal and check myself. Why was the past week as it was, what was wrong or right, what am I supposed to do in order to correct myself and/or keep doing well.

"The psychological journal is a tool for developing your internal observer: learning to recognize what you’re doing, when you’re doing it."*

Thanks to this book* I started a very specific journal and with it I began to see what I do and when I do certain things. The journal I use is made of columns. The first column is about what I see on the market, what kind of pattern is unfolding on the chart. And based on what I see I study my rules to be prepared in case a pattern will show up so I’ll know what to do. As soon as my first column is filled, I move on to my second column which is about my feelings. In here I write about my feelings as I watch a pattern unfolding on the screen. Working on my notes allows me to see that I’m not doing anything against my rules, that I am following my plan, and that there’s nothing to worry about. It’s immediately evident there are no emotions connected to the situation. And after all this, I start the notes in the third column. If there was a trade, I use this column to record the resulting consequences, and if there was no trade I write why I didn't take it. If there are things that I did wrong I always go back and have a clear understanding of what I saw, thought and did then. I make mistakes, and by having notes like this I can see what they were. Sometimes it’s bad reading of the market, or I can be emotional, or it was bad execution. By going back over my notes I can correct it the next day or even the next week without any confusion.

"When we clearly link maladaptive patterns to negative consequences, we develop and sustain the motivation to change those patterns."*

"You cannot change something if you’re not aware of it."*

*LESSON 14 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Conquering Threats

Anxious, frustrated and afraid, but thanks to all my teachers, never reluctant. Yes, I have to say that all of these feelings were surfacing whenever I was looking for a trade, waiting for a trade or was in the middle of a trade. But thanks to all my teachers, and not just the "pros" but many of my trader friends, I never felt reluctant. I feel that this is because I didn't make all the possible mistakes. So many times others have told me, "been there, done that..." Mistakes like exiting the trade too early, taking a trade because you just saw something, and entering the trade too soon were happening to me often. But, I never traded without the stop or with the thought to move my stop and wait for the market to move my way. By moving back to SIM account I finally realized all of my mistakes, because somehow I was totally not seeing them by trading live.

"The key to longevity is making those mistakes early in your development, before you have too much on the line."*

Perhaps if I had found all of those mistakes sooner, I could have shortened my path of learning just a bit. All my mistakes came down to one biggest problem I realized during SIM trading - Overtrading. I was leaving the trade that I didn't allow to hit my target, so I was trading brake outs, and it ended up to be a loser. Or I was taking a trade without good planning, without even checking my rules and setup, and repeating this over and over again. Each loss I kept trying to make back and trying again and again, with only more frustration and anger.

"In order for a market event to generate a negative emotional response, we have to view it as a threat."*

I am a day trader and my style might be different than yours, my dear reader. But by remembering my rules and plan I do save my time in trading and my money as well. What do I mean by that? Rules that govern when I can take a trade are the key information for me even at the moment when I’m looking for a trade. There are many times that the market is doing nothing and thanks to those days I can save my time and do many other things instead sitting and watching with no opportunity to trade. In the past I would click my mouse like crazy and end up with a big lose, now I accept days that I can use my time to save my money. Being a day trader set me up with a very limited type of trading based on my rules, and if there is no setup there is no trade. The best I thing I can do is to wait for a setup, and check it with my rules. Then, and only then, do I take the trade. With clear rules there is no way to view the market as a threat.

“Every time you experience a distinctly negative emotional reaction to a market event, consciously ask yourself, ‘How am I perceiving the current market as a threat?’”*

Reading the market during the day can lead to many thoughts. When it’s trading without me, I’m thinking I lost an opportunity. But on the other hand, since I don’t take this as a threat or dwell on it emotionally, I don’t care where the price is. I care only about seeing my setup and my way of participating in the market. Whatever the market is doing I’m doing my job. Being alert in front of the computer puts me into the zone of planning and drawing. As soon as I see a good opportunity I trade; as soon as I realize the market is not for my rules today I walk away from the screen. This way of thinking and planning puts me in a calm and relaxed mood for the day.

"When you think about your thinking by adopting the perspective of a self-observer, you no longer buy into negative thought patterns."*

There are many ways to read the market. I look for trades based on three types of technical measurements. If there is nothing to see I simply wait. Otherwise I become nervous about why there is nothing to trade. If there is a moment that the price is approaching my setup I simply wait for the price to give me a stop placement and an entry place. If this doesn't happen first then there is no trade for me. There are tons of moments during the seven hours of waiting for the trade that a trader can read the market as a threat, lose money or get nervous. During this time, while measuring and possibly trading I write a journal about anything that is happening and it helps me to either wait or act appropriately.

"Identify the perceived threat; turn the perceived threat into an opportunity: that is a two-step process that addresses the true cause of emotional reactions that distort trading decisions."*

*LESSON 13 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

What do you expect?

"To no small degree, our emotions are barometers of the degree to which we are meeting or falling short of our expectations."*

"A Good Day Is a Winning Day."*

I say: “A No Trade Day Is also a Good Day.” Not only profit days are good. There have been lots of great days in my trading career that were not green days. I’m happy and proud of myself at the end of the day if I go back and see that I followed my rules and plan. I’m very proud of myself when I see that I executed my trades based on my rules for the setup. The most important days are those when I follow my rules about risk management. And as weird as it may seem, equally important are the ones when I manage my risk poorly. Even though I always trade with a stop placement, I make mistakes and then I have a lot to learn from them. By setting a goal for each trading setup, for each day, week, I can tell if I did well and if that was a good day. Now I've had enough experience to expect days when I’ll know not to trade.  I know to follow setup with my rules in order to have losing days as little as possible. So I know that not all Good Days have to be Winning Days, they just have to be days that work for me.

"Never set a goal if you’re not in full control of its attainment."*

"Working Harder at Trading Means Trading More Often."*

Nothing can be worse than over trading. This is the first key to good risk management. I was doing anything to trade and make money. This was the biggest mistake I ever made during my trading career so far. If I only knew, and I hope I can inform somebody out there who is starting their learning process from a risk management point of view, I would never have allowed trading more and harder. Of course I could have avoided this problem, my mistake, but my trading started with learning about the technical aspect rather than risk management. If only at that time I had listened to the "pros," I would have stayed on SIM a lot longer in the first place and probably would have never fallen into the hole I did. Today I follow risk management for each and every single trade, for each day and week to make sure I don’t spiral into hard-and-often trading that would only dig me a deeper hole than before.

"Success Means Making a Living from Trading."*

Ooh yeah, this is the statement that got me into trading. The worst statement I ever heard. It came to me very quickly that this is not the goal to focus on in the beginning, but my family was "watching me" and expected nothing else but this. Thinking about making a living from trading is a good thing to do after at least 3-5 years of being bitten by the market, especially if you don’t have any idea what you’re doing. This amount of time is just necessary to get it all right and you can start making money after that. And again, if I only knew that this statement is the worst ever made, I would have saved myself a lot of frustration.

"There is no path to expertise that doesn't first require time to develop mere competence."*

If you’re looking for a way to make the process of acquiring expertise smoother and faster, the best advice I can give is to start with a journal, then make a plan and rules, learn to set goals, practice good risk management, and follow it all religiously.

"By focusing on risk-adjusted returns, not just absolute profitability, we blend process and outcome goals."*

*LESSON 12 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Stress.

I always thought that my stress was killing me and my trading. It was always the one thing I was afraid of, that was stopping me from trading, but the truth is that it’s not. While reading this book I realized that stress isn't the problem but again rules, mistakes and me. How many stressful situations I've had over these last few years of trading is just impossible to say, to recall. But I do remember why they where stressful for me. 

Firstly, I remember myself trading before the news, and I don’t think I need to explain what that did to me and my trades. These trades were never winners, but always very stressful situations. Next, I remember trades at setup that I just saw. Those were made in a rush with no planning, thinking or even realizing what market I was in. And again those were putting me down as well. And last but not least, I remember the trades that were taken because somebody else took them. All my trades that were not planned were the most stressful of all, because in those situations I didn't know what I was doing, and I was getting pissed at another person who took the same trade, or worse, at the market. Now I know that it’s not the stress that’s the problem, but me and my rules. I know I didn't make all of the possible mistakes, but those three were enough to put any trader on the red side or in the hole for a long time.

So what was wrong?  Well, my rules weren't specific enough. Since I've found what was wrong, I now have rules like: “Never trade before the news,” or “If you just saw it, don’t do it.” Since then I've had them stuck around my screen and I follow them religiously.

"Stress is a mobilization of mind and body; it can facilitate performance."*

As I've mentioned several times before, I never traded without a stop, but I did make other mistakes; we as trades always do. All those mistakes were causing stress, but on the other hand if not for this stress I would have never known what was wrong. When I started going over all my trades that didn't work and were very stressful, they gave me an idea of what was wrong. It was truly and only my fault that they were losers. So I learned to set up all kinds of rules for myself that continually keep me trading with a lot less stress, but I also learned a valuable lesson in that, stress can be very helpful and I need to be alert when I trade so I can recognize the source of my stress and use it for my further growth.

"Position size limits, trading plans, and stop-loss levels are like snow tires on your vehicle: they may not seem to do a lot for you when things are going well, but they certainly help you deal with adverse conditions."*

Having rules is one thing but following them is a totally different thing. This is where I need stress. I feel alert during setup and I quickly go over my check list. Thanks to my stress I feel like I’m working. I’m doing well because I do check my rules and I make decisions based on those rules, not based on my feelings. Rules are sometimes big like, “Do not trade at all before the news,” but some are smaller like, “Swing size that I can read is a good signal in my setups.” So, having rules is one thing, but checking them every single setup and trade, every single day, is the thing that keeps me on my toes. And again, thanks to stress I know what to do.

"Preparation and familiarity keep stress from becoming distress, because they enhance your sense of control."*

For me, trading was always a lot of work, not because it was hard, but because I wasn't prepared. I now spend many hours doing my homework, sometimes in the morning, but more often in the afternoons, and for the next day I am always prepared and know ahead of time what I will do “if.” When “if” happens I’m ready to check my list and act, and the stress is gone as soon as I check the list. I know what I see and I trade what I see. It’s that simple.

"That doesn't mean repealing stress; it means creating active firewalls between stress and distress. Risk management is one of the best psychological firewalls of all."*

*LESSON 11 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Knowledge.

I've already touched on how change started happening for me. It was all in stages; it wasn't just in one day, week or even a month. Change is not only about the moment we decide to trade in a different and better way, because change also happens with our state of knowledge. For me one example of change was learning the market profile (MP). It took me a lot of time, don’t ask how long because I don’t even remember, but I do know that it took me at least three rounds of studying to grasp it. I got the book and I was trying to read it, and oh my, it was hard and it sounded like Chinese to me. I breezed through it and didn't understand a word. After a while I tried to read it again with the same results, but my third attempt was the charm, total success. I just wasn't ready for it before then. I ended up reading three books about MP really fast, I watched the best seminars I could find about MP, and I also read a lot of articles about it at real time of market action. This was how the market profile became the base for my rules.

"You will change when you’re ready to change, and you’ll be ready to change when you recognize that you need to change."*

I wanted so many things to happen simultaneously. I was reading a book each about market shapes, MP and psychology all at the same time. And it was too much. I knew that psychology was the most important topic I should get into, but since I lacked belief in my plan and rules I decided first to study more and then make my final planned change, which was to focus on the psychology of trading. I went through books about shapes, then MP, and finally ended up and still continue to read only psychology books. And with that approach self-coaching became a lot easier for me. Day by day I was setting up goals to achieve. Some took longer to reach as would be expected, but some were easier and helped me feel successful. Goal by goal, I got to know myself, how I trade.

"Work on that one goal intensively and daily until you make and sustain significant progress; then move to the next change."*

"When you coach yourself, focus your efforts and let one success fuel others."*

The first thing I learned from working with my new coach (Me) was that I was missing goals. I saw that I made progress and that I was trading better, but it was very easy to make mistakes, to over-trade, to question myself twice about a trade instead of checking my list of rules. Since I started to work on myself, I realized that setting a goal and following it for a period of time until it becomes my habit is the best way to stay positive and focused on my rules. Doing the same good thing over and over again built sustainable change and made me want to continue doing it day after day, week after week.

"We've seen that the enemy of change is relapse: all of us too easily fall back into old patterns if we’re not making conscious and sustained efforts to build new ones."*

"Successful coaching means working as hard at maintaining changes as initiating them."*

Change came to me because my situation was bad, it was really bad. I knew I was doing something wrong and repeating the same, old, bad patterns every trade/day/week. It took a while to understand my mistakes and even longer to stop making them, but the next step was to get things right and start doing it all the right way. Realizing your mistakes is a big step, and stopping yourself from making them is another.  But this shaped me to do good things, and by repeating the good I became fearless, less stressed and a strong believer in my rules, plan and strategy. By setting goals and working towards them for a long period of time, until it became second nature, I started to see trades clearly, plan them slowly and take them with no possible anxiety. The most powerful goals for me were to be patient, to check my list of rules before taking a trade and to take photos (screenshots) and notes.

When finally I got things right, I saw that it was working and that I can do it. There was nothing left to do but continue the same to get consistent in my successful choices.

"If you’re trading well, that’s one of the best times to coach yourself."*

*LESSON 10 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Self-confidence.

Trading is a very lonely profession, at home alone. If I hadn’t joined a trading group then I’d end up talking to my charts all day. When I have one good day after another I like to share my excitement, and when I have a bad day, losses piling up, I get frustrated, but this is when you have to remember the keys for self-confidence. Having targets before even entering the trade, having stop loss placement at the same time I enter the trade, and most importantly, having rules that dictate why I’m looking for a trade and why I’m taking this trade.

"The key to regaining self-confidence in such a situation is to turn the focus from making (or losing) money to the actual process of trading."*

"You control how you trade; the market controls how and when you’ll get paid."*

Rules come first. They must be strong, logical and smart in accordance with successful trading practices. Only then can I focus on following those rules, and not on my daily/weekly P&L. Rules must make sense being there because only then will I be able to measure my success, and by following my rules I can tell I’m working on my success. My choice and action to follow those rules is the one thing that I can control every trade, every day. By controlling this and showing myself that I can always follow my rules, I have proof, evidence that I am a successful trader. This control of my success, this self-mastery, is what gives me more and more confidence as a trader, thus leading to more and more success.

Good Sound Rules Are Followed Every Trade = Confident Successful Trading Process = Eventual Profits

What helps me grow self-confidence is to work on my charts, notes and trades daily and weekly on a consistent basis. Repeating over and over the same plan and rules builds self-confidence. When I see that I have followed my rules every single day I want to continue the pattern the next day and next week because it makes me feel good about myself, like I’m a strong trader.

"Self-confidence is not expecting the best; it’s knowing, deep inside, that you can handle the worst."*

Trading without a stop is unthinkable. I need to know where my risk is. If a trade is not working, what will I take as my loss? I know I can manage only that loss. Many times we as traders tell each other "I've been there, done that," but thanks to this book I started to say to myself:

“I've been here; I can handle this.”*

"Confidence doesn't come from being right all the time; it comes from surviving the many occasions of being wrong."*

So why do I need a journal? To build my self-confidence I go and read my notes over and over again. Thanks to my notes and pics I can find what I did right and what I did wrong, so I can stop making mistakes and do great the next time. If I didn’t take pics or notes I would never remember what happened earlier in the day, let alone at the end of the week. What I was looking for or how I traded would be impossible to keep track of after a week. Knowing your own mistakes will stop them from happening again, and being aware of what I do well will allow me to make it happen over and over. I use my journal as an essential tool to keep focused on my rules and plan. All my positive notes help me stick to my path.

"Every trader needs a plan for losing. Your stop-loss is your plan for a losing trade."*

"Your losing trades and losing periods are your trials by fire that build resilience and confidence."*

*LESSON 9 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

You are your role.

As you might have figured out by now from my previous posts, traders (me included) aren't likely to start helping themselves to change until they get to a serious drawdown, in other words a huge loss in the trading world. Unfortunately it often takes this kind of very stressful frustration and extreme situation for a trader to see that they need help. It was the case with me, but even though I went through a lot of painful realizations I am very happy that at least I didn't make every possible mistake there is. I have the consolation that I never traded without a stop, and I never moved my stop to make a loss bigger. But still, my biggest mistake, my biggest issue was trading to make money no matter what. This was my first biggest mistake that became apparent once I stepped away from live trading and went back to SIM.

“Trading requires a mind free to process data and select appropriate action. But we no longer have a free will if we are mechanically reliving scripts from the past.”*

In the book I read:

“One trader I worked with grew up in an overprotective and controlling home. He rebelled as a teenager and subsequently found himself chafing at any constraints on his behavior. His violation of rules in relationships (monogamy) and trading (the risk-management rules of the firm) led to one failure after another.”*

I felt like I was reading about myself. If I had only known about this connection from the beginning I would have worked on myself a lot sooner, and I would have looked for behavior that was hurting, not helping at all. My life experiences as a kid, teenager and adult added a lot of stress to my trading. Being a very sheltered kid, a rule breaking teenager and a totally impatient parent is reflected in my trading. Having been sheltered saved me for some time and it helps me now when I finally have a set of rules to follow. The teenage rebel in me contributed to my losses by insisting that I always make money no matter what. And now in my life I have kids that force me to practice my patience. Trading on SIM account showed me what I do wrong and also what I do well, but most importantly it helped me to realize who I want to be. Reading this book gave me the great recipe for becoming that person.

“Create the roles that mirror your desired identity; live scripts of your choosing.”*

*LESSON 8 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

"allow the viewing to affect the doing"

At the very beginning of my trading days there were many things distracting me, for example my playing kids. On the screen there was so much happening like the tick by tick price movement, TICK & TRIN action, cash market action and lots more, that I don’t even remember now. I used to watch TV a lot more years ago than I do now in order to decide if I’m taking or not taking a trade. One little thing that I remember being a big change for me then was the color choice of my candles. My trader friend had told me that red and green have too much in common with our money thoughts, so I changed the colors to blue and yellow. It looked and felt better right away. I mention it just to give you an idea of how even the smallest things around us can affect our trading, and why we need to be more consciously aware of our surroundings and habits.

My most prominent feeling while trading was always and still is anxiety. And this shows up at every possible moment. I feel anxious before a trade because I’m thinking if I should take it or not, then during the trade because I’m looking at the profit and thinking about money that’s left on the table. Anxiety might even show up around our good thoughts as well as bad, and fighting that feeling is very hard.

“...it’s not the thoughts of performance that take you away from your focus, but your identification with those thoughts.”*

During so many trades that I took, and while going through them afterwards again I looked for both my mistakes and good behavior. The biggest step forward was setting targets for each and every single trade before I was even in it, and of course having a stop placement as soon as I was in the trade. Here I gladly admit that I’ve never traded without the stop, and if you – the reader – are trading without it then you should take a break from trading until you understand what you’re doing. This is probably the biggest mistake you can ever make! It’s said that you can manage only your risk, never your gains, and for me this is the biggest truth I ever heard and understood.

“Many traders’ problems show up in how they handle opportunity, not loss.”*

Since I decided to change my trading habits I’ve developed a list of tasks to get done every morning before starting a trading day. During the morning hours of most days I have to prepare my kids for school and of course each of us traders has things to do before the bell that require our attention. Afterwards, to prepare myself for the day I need to go over all my charts, review my main rules and then set my brain for positive thinking. For me this is meditation, quiet time when I choose the things I’d like to forget and those I’d like to continue doing or do better than yesterday. Music, slow breathing and a comfortable sitting position helps me to switch my brain into the relaxed mode of a positive-thoughts trader in the zone. For me it has become very important to be ready, to get everything set that I need before I start looking for trades. Luckily, since I don’t trade before any kind of news, I sometimes have a lot more time, because the news often comes on at 9 am Central Standard.

“Negative thoughts are inevitable; the question is whether you buy into them.”*

*LESSON 7 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Goals.

Everything starts when we are kids. The way our parents educate us and deal with us, is the same way we will treat ourselves as adults. After our parents, another big relationship in life is with a lover. And although they don’t formally teach us as our parents did, we still learn lessons through loving and being loved. The significant personal relationships throughout the course of our lives all contribute to building us as people. And this person that you have become constantly talks to yourself the way you learned from others.

"Our self-talk is born of just such early life conversations: we internalize the voices from significant relationships."*

The way my parents raised me will never help me to be a good trader, to make money. And now as an adult I have a lot to wish for about my husband, that he could be more supportive while I work at being a trader, but trading is my choice. Everything we bring to our lives from our family homes and our lovers shapes us, whether it’s going to help us as traders or not. If you choose to be a trader you have to decide what part of your programming is good for you and what is not. Since I started to coach myself I’ve realized that this is the only help I can get. Work that I put towards myself is the best thing I can do to improve my trading.

"When we make goal setting an ongoing feature of our self-coaching means, we continually construct opportunities for powerful, self-affirming emotional experiences."*

Successful people usually have one thing in common, that they’ve gotten into the habit of focusing on goals.  A few of them were lucky enough to learn this practice from their parents or other loved ones, but everybody else has had to learn it much later in life. Goal setting for me was like understanding how to learn from losing trades. I finally “got” the idea of goal setting last year, but it was like pulling teeth to wrap my head around how it works. Why? Well, because I wanted to achieve something, but I wasn’t doing anything to get there. I didn’t know how to do it. I wanted to be a good trader so I suppose that was a goal, but I had no idea what to do with that goal.

"Your goals should set yourself up for success and a building of confidence."*

It is easy to say... a little harder to do. It took me a while before I started to set goals for the day, week, month, or even the year. It started, of course, all thanks to this book. I started to set positive goals for the things I would like to achieve, and I also started to check my progress with each part of my goals. This positivity is the key. A goal must be positive because it is meant to build confidence if you see progress.

But, the progress is not about money. They say, money will come, stay positive and focused, go with your plan and rules, and money will come. And this of course was not easy for me to get either. Simple goals like waiting patiently for your setup, taking notes consistently, and never trading before the news, were all small steps that got me started.  Similar goals can work for you as well as a platform for learning how to use goal setting.  Day by day I learned from my goals as I have learned from the relationships in my life.  Each smaller goal that I’ve set and achieved has led me to plan my next bigger goal, and they all continue to help me form and follow my trading rules to continue achieving these goals.

"It is not enough to set goals; you need ways of tracking your progress toward those goals and feeding that information into future goals."*

*LESSON 6 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Emotions.

It’s hard to describe all the different emotions I felt during my beginner trading days. The most common were anger, frustration, anxiety and fear. During every single day it was the same over and over again. After each good trade I would feel happy, excited and confident, but as soon as a loser trade showed up it was back to fear and frustration. In my everyday life I am admittedly a sensitive person who very easily gets emotional. You could say I wear my heart on my sleeve and my emotions all over my face, but the only thing I can say to that is:

“It’s just the way I am.”*

However, being the way I am, emotional and sensitive, doesn't make for a profitable and consistent trader. But, after starting to work on myself I noticed that all of the feelings were showing up in my trading less often or for shorter periods of time. I realized that I was doing three things regularly to get to this point.

1. Breaks: It is rule #1 for me to take a break after each losing trade. This break is essential to give me time to take notes, and to quickly realize what I did and what happened. The thing is that not every trade will work and moreover there will be more losing than winning trades. During my break I study the trade I took, looking for the answers to why I did take it, and also looking for all the things that I did both well and badly. Breaks are a must for me after losing periods that prevent me from trading anymore for the week, based on my rules of course.

2. Relaxation: I accomplish this through deep, controlled breathing then by gradually relaxing my arms and legs. The tension that was getting into my body during the trading day, especially during losing periods, was terrifying and heavy. Learning how to let go of it properly took me months, but since then it’s become just a few wonderful minutes to get me to a calm and relaxed state while waiting or being in the middle of a trade.

3. Journal: I had a “journal” from the very beginning, but did I really know how to journal my trades when I started, definitely NOT. This process of learning how to use my journal as a trading tool took me years to perfect. Today my journal shows me everything and it teaches me how to work on myself while trading. The steps I take to make good journal entries are to start with recording what I see, then how I feel and finally by describing the situation as it really happened.

These three things, whether all together or just one at a time depending on the situation, are what calm me down back into the mode of a focused trader so I can be in the zone. I’m able to use my emotions instead of letting them control me.

..."a great place to start is with the perspective that feelings contain information."*

*LESSON 5 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Taking breaks.

I was home alone with my laptop on the dining room table; alone, with no help, no understanding, continuing to make the same, old mistakes. It is very hard to be a trader by yourself. Working hard every day on my notes and charts was giving me nothing. I was not seeing any good come out of the work I was doing. The learning process is long, they said – no kidding. No one but another trader could understand that I kept hearing the same things so many times, but nobody was able to help me. My work and I were chasing each other around in circles, never changing.

"The greatest enemy of change is routine."*

"In familiar environments and routines, we operate on autopilot. Nothing changes."*

Even though there was no big change happening to me and my trading day to day, I realized that being alone was not going to help. One day during an online class I met a person who suggested I join a big group of traders. This was a big step forward for me. I was very interested in how others see the process. I could talk to traders in real time during the day about what I saw and what they saw. We shared views on the markets, but that was not all. Online lessons became clearer, and I started to understand more and more of the technical side of the trading scene. This was all because I now had other traders to share with and talk about markets.


This wider view, the lessons and reviews with many traders, were steps for me to know more about trading rules, plans, and strategies. But, it was still hard and painful. I started building a set of simple rules for myself to trade better. It was far away from the stage where I am now, but one lesson was crucial - breaks. I know I’m straying from today’s topic, but I want to get this out there as soon as possible now that I’ve thought of it. The best decision I ever made in trading was to take breaks. Since I started this habit, I've become more relaxed and more prepared for the next day. My breaks are small ones during the day, or big ones after a bad day.  I also choose to take a whole day off on days when the markets are not so good for trading, and of course just for time with my family or friends. It doesn't do any good to tie yourself to your computer on a forced schedule because you end up making mistakes. One of the best breaks that I ever took was my decision to go back from live to SIM trading in December 2012. It was a break from losing and from stressful trading. It allowed me to move on and work on myself as a trader, instead of focusing on the money.


"When you act as your own trading coach, your challenge is to stay fully conscious, alert to risk and opportunity."*


But, I digress. After a long time, a very long time, I started to get the feeling that change was about to occur. The change was with how I see the market. It’s not about the technical picture, but about me being able to control myself, my actions and reactions, based on my rules. I finally saw that I would be able to achieve success because I started to plan with strategy and risk management. I realized that rules and patience were the keys for me to get this right.  If only I had some of this insight from the beginning, I would have saved myself lots of stress and tears.  That’s why I hope I can help you all to start your own plan sooner rather than later. 


"In short, it’s the mental routines—the mental environment—that we most need to change to break unwanted and unprofitable patterns of thought and behavior."*

*LESSON 4 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Mistakes.

My friend Teresa has always told me, “Learn from your mistakes, learn from your losing trades.” She still says this any time I or somebody else shares about a bad trade. And in response to her I always asked myself, “How the hell can I learn from my red trades? What the hell she is talking about?” But, I never asked her for more of an explanation, never. And I never learned from my mistakes until I found how to do that in this book. It became so easy to understand, to read and look for mistakes after I read lesson #3, amazing. Who knew?

"Consider embracing your flaws: every losing trade is there to teach you something."*

Ever since I embraced the idea that I should work on my losing trades it got so easy and simple to go back and look for my mistakes. Sometimes I found very big mistakes that I was a ashamed of, but other times I saw that I missed something and I learned. I found some little mistakes that I kept repeating with every losing trade, and this discovery led me to correct some of those small mistakes.  This made a huge difference for me. By checking these moments, I also learned to make a better check list for future setups. Every single trade since then has been checked to see if I missed something, or if I was pushed to do something that I shouldn’t have done. From that moment I realized what Teresa meant by learning from your mistakes, what she was trying to teach me.  I guess it’s better late than never, right?

"Either way, your losing trade is never a total loss as long as you embrace it and learn from it."*

At this point my journal started to have a lot more information in it. Not only about each trade I plan to make, but also information about what I see before and during this trade, and of course just after it is done. If this trade was a losing trade then I was looking for an answer to the question WHY, to explain why it was a loser. If it was a winning trade then I was looking for good things I did, to make them visible to myself and to be able to repeat them the next day, and then over and over again afterwards.

"...the research of James Pennebaker suggests that giving voice to stressful events—in a journal or out loud—for at least a half hour a day is instrumental in our putting those events into perspective and moving beyond them."*

*LESSON 3 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

You and Your trading coach.

As I said before, I started my change before I ever got to this book. It would have been easier if I had begun the process while simultaneously coaching myself, but it is OK for you to start coaching whenever rather than never.  Don’t wait for “the right moment.” At the time, I was only focusing on my trading and it was just harder to do than it is now that I've learned how to be my coach.  As soon as I started to talk to my coach it became a lot easier. By talking to my coach, I mean nothing else but keeping a good journal. This doesn't mean that I had no journal before; I did have one, but it somehow had less meaning for me. Once I started to keep specific notes about my trading plan, myself and trades (at the moment of, during and after a trade), it all began to mean a lot more to me. Putting it all on paper is one step and the second is reading it at the end of the day or the week.

"Research informs us that the most important ingredient in psychological change is the quality of the relationship between the helper and the person receiving help."*

With having a new journal entry for every single day, for every single setup and trade, I started to see what I was doing and how I was doing it. The thing is that, before I started keeping my new journal, I had no idea why I was anxious, nervous, happy or even excited. It was hard for me to write a journal during the trading day. I had been doing it after the day was done, after good or bad trades were done, and by that time I didn't remember my filings, my setups from the very beginning to the very end of the trade, and I wasn't even sure what I did right and what I did wrong. I was missing much of the information between the lines about my trades and myself.

"Many traders don’t really know what they do best; they’re invisible to themselves."*

So what was different in the new type of journal? I could say everything, but to be more specific it was because of four things. These were the time when I wrote in my journal, the way I organized the journal, commenting on it at the end of the day and finally, reading it at the end of the week. With having correct information at the correct time I was able to see what I was really doing throughout the trading day. I was able to see my mistakes, but also, and most importantly, I was able to see what I was doing well. I was getting information about things to avoid and also about things to repeat and do over and over again. My first goal and most important thing to do, and repeat every single day was to write in a journal. Once I had this goal accomplished I was immediately looking for the next little goal to add to the next day and the next week, and I repeated this process all over again and again, until it was my habit.

"Set a positive goal, based on strengths, to keep you in touch with the best within you."*

"Trading goals should reflect trading strengths."*

While working hard on achieving my goals I realized that I was doing great just by having control of myself and my action in relation to market action. I saw that I was making huge progress in making decisions as well in having more profitable trades. I was not paying attention to the trade itself, but rather, I was paying attention to myself, my action, my decision processes, my feelings and goals that were set for the day/week.

"The best relationship is achieved when goals are linked to values and express distinctive strengths."*

"...if you’re not keeping a journal, your coach is silent. What sort of relationship is that?"*

*LESSON 2 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.

Change.

In December 2012 I decided to stop trading. Why? Because I lost so much money that I could not allow my account to drain any more. I decided to move back to simulated account (SIM) until I get it right. I told myself it will take as long as it needs to take. I felt I needed to change, and at that moment, I was not even reading this book. If I had been, then everything would have been easier and quicker. Once I started it, it seemed like my experiences were always one day ahead of whatever section I read. I was reading things that already happened to me just one day earlier. Whenever I sat down to read, it was as if the chapter was written just for me.

"Many traders only get to the point of self-coaching after they have experienced harrowing losses."*

I wanted the change without even realizing that I was doing just that – making the change. The thing is, it’s very hard to start changing. It was hard for me. The decision to move back to SIM terrified me. I have to admit that I cried and it really hurt to be going backwards with my work.

How many times have you tried going on a diet? How many times did you start workouts for yourself to get into better shape or to feel better? How many times did you try to quit smoking or drinking? Me, I quit smoking many times, started workout programs as well, and diets too. I always had a good reason to go back to my old, bad habits. But finally, I reached the goals I wanted to achieve in those areas, but it took time and effort. It’s the same with trading.

"The easy part is initiating a change process. The real challenge is sustaining change."*

With my decision to go back to SIM, I realized that I needed to change and finally get it right before I would ever go back to live trading. I knew it was going to take time, time that I didn't have. When I thought back to how many times I had already gone back and forth from live to SIM trading, it scared me that this time would be the same with the same results. But I pushed myself, to stay on SIM and to work hard to make a change once and for all. The key is in the plan, rules and strategy all at once, to be followed every single day in the same way.

After 4 months of trading on SIM I finally got to the point that I saw I can really do it. I had fewer rules, but a more specific set of rules with the same plan and the same strategy. My pain and fear of trading changed to the driving force behind making me trade the same way live, because I did good based on those rules on SIM account. It was very important for me to do the same thing on the live account, so I set a goal for myself. My goal for 2012 would be to break even doing the same thing live that I had done on SIM.

"The secret to goal setting is providing your goals with emotional force."*

It is the end of the year, and I am very proud to say that I reached my goal; I broke even. Also, I have finished my first reading of Steenbarger’s book, which gave me a lot more than just information about what I was going through. With my own help, I got a new set of goals. And now I know I can reach them.

"It’s important not just to have goals, but also to directly experience yourself as capable of reaching those goals."*

Today I coach myself to continue my change. Every day I check on my work to see and feel my success. Reaching each and every single goal, and following my rules every single day is pushing me to do the same over and over again. I don't ever want to look back and think about the days before December 2012.

"Coaching is about making change happen, not just letting it happen."*

*LESSON 1 The Daily Trading Coach 101 Lessons for Becoming Your Own Trading Psychologist by Steenbarger, Brett N.