Despite a little setback a little after 10:00 when I seemed to be beside myself for a brief period of time, I managed to come back and hit my Net Daily Goal for the day. It is hard for me to describe the mental shift that takes place during those periods of time when I seem to make a series of bad decisions in quick succession.

Dr. Brett Steenbarger talks about it in his book that I am currently reading “The Psychology of Trading” and this week I have really been trying to take the message to heart and make the necessary changes in my own trading.

Basically, it boils down to each one of us not being quite so, shall we say, unified as we’d like to believe. Instead, there are different aspects of our personality fighting for dominance at any given time, with each taking up residence in different portions of our brain. When X happens, it triggers section D of our brain eliciting personality #1, but when Y happens, the pathways along E are triggered brining out personality #2. That’s what is meant when we say that we “feel besides ourself.”

Bottom line is that the key to improving our emotional stability during trading is recognizing who is currently present, which means being able to take a step back and look at our own actions/thought patterns/personality from an objective perspective. Only then can we take the actions necessary to bring about those aspects within ourselves that are most conducive to a positve PnL statement.

Of course I’m way over-simplifying all this here, but you get the point. Anyway, I have really been trying to catch myself in non-ideal trading mindsets this week so that I can use them as a trigger/reminder to get back into a more positive frame of mind. And while it is way to early to tell, it seems to be working. I HAVE caught myself in bad behaviors this week that previously could have easily spiraled downwards to the point of hitting my daily stop limit. But by taking appropriate action, I was able to get myself back on track and stem the losses and accumulate gains in each case.

If you find that your own losses tend to clump together, I’d highly recommend the book, as it may be just what the doctor ordered!

Consecutive Days Hitting Net Daily Goal: 2
# Days Hitting Goal out of Last 20 (with goal of 16/20) : 14