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Trading performance psychology and self-talk

Giv­en the stock mar­ket per­for­mance these days, Brett Steen­barg­er offers time­ly tips and resources for traders on man­ag­ing stress and self-con­fi­dence: Updat­ed Psy­chol­o­gy of Trad­ing Resources, includ­ing a list of rel­e­vant blogs such as Afraid to Trade blog, Trad­er Psy­chol­o­gy blog, the Head Coach blog, his Stock Mar­ket Psy­chol­o­gy blog and Smart Trad­er blog.

He also offers very good advice to build self-con­fi­dence, which can be use­ful to us all, no mat­ter our pro­fes­sion: When Traders Lose Con­fi­dence — Part Two: Chang­ing Your Self-Talk .

  • The key to chang­ing the self-talk is to become aware of when you’re doing it. Most often, the neg­a­tive talk is auto­mat­ic. Jour­nals are effec­tive because they force us to reflect on our think­ing and inter­rupt those auto­mat­ic pat­terns. Sim­i­lar­ly, I’ve had great results work­ing with traders who talk their thoughts out loud into a tape recorder and then play them back. It’s an excel­lent way to become aware of your think­ing, stand apart from it, and break the flow.”
  • Yet anoth­er strat­e­gy is to go through guid­ed visu­al­iza­tions of chal­leng­ing mar­ket sce­nar­ios while you’re calm and focused (before trad­ing starts) and then men­tal­ly rehearse the self-talk you’d like to engage in dur­ing those sit­u­a­tions. This helps to build new, pos­i­tive pat­terns of self-talk.
  • The key to all these strate­gies is rep­e­ti­tion: you’re train­ing your­self to process infor­ma­tion in new ways, and such train­ing requires prac­tice.”

You may enjoy our inter­view with Brett N. Steen­barg­er on Enhanc­ing Trad­er Per­for­mance. And learn more on oth­er tech­niques at Best prac­tice for top trad­ing per­for­mance: biofeed­back and solu­tions for Traders.

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5 Responses

  1. Robyn says:

    Hi Alvaro, you’ve list­ed some great strate­gies for traders to change their self talk. And the trick is to catch your­self at it!

  2. Alvaro says:

    Hi Robyn, yes, like any new habit, this requires practice…maybe keep­ing a jour­nal, or hav­ing a friend/ col­league ask us at ran­dom times, “what are you think­ing now?”

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