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.