The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist

Preface xiii

Acknowledgments xvii

Introduction 1

Chapter 1 Change: The Process and the Practice 3

Lesson 1: Draw on Emotion to Become a Change Agent 4

Lesson 2: Psychological Visibility and Your Relationship with Your Trading Coach 7

Lesson 3: Make Friends with Your Weakness 9

Lesson 4: Change Your Environment, Change Yourself 11

Lesson 5: Transform Emotion by Trace-Formation 14

Lesson 6: Find the Right Mirrors 17

Lesson 7: Change Our Focus 20

Lesson 8: Create Scripts for Life Change 23

Lesson 9: How to Build Your Self-Confidence 25

Lesson 10: Five Best Practices for Effecting and Sustaining Change 29

Resources 32

Chapter 2 Stress and Distress: Creative Coping for Traders 33

Lesson 11: Understanding Stress 33

Lesson 12: Antidotes for Toxic Trading Assumptions 37

Lesson 13: What Causes the Distress That Interferes with Trading Decisions? 40

Lesson 14: Keep a Psychological Journal 43

Lesson 15: Pressing: When You Try Too Hard to Make Money 45

Lesson 16: When You’re Ready to Hang It Up 48

Lesson 17: What to Do When Fear Takes Over 51

Lesson 18: Performance Anxiety: The Most Common Trading Problem 54

Lesson 19: Square Pegs and Round Holes 58

Lesson 20: Volatility of Markets and Volatility of Mood 61

Resources 64

Chapter 3 Psychological Well-Being: Enhancing Trading Experience 67

Lesson 21: The Importance of Feeling Good 67

Lesson 22: Build Your Happiness 71

Lesson 23: Get into the Zone 73

Lesson 24: Trade with Energy 77

Lesson 25: Intention and Greatness: Exercise the Brain through Play 79

Lesson 26: Cultivate the Quiet Mind 83

Lesson 27: Build Emotional Resilience 86

Lesson 28: Integrity and Doing the Right Thing 89

Lesson 29: Maximize Confidence and Stay with Your Trades 91

Lesson 30: Coping—Turn Stress into Well-Being 95

Resources 97

Chapter 4 Steps toward Self-Improvement: The Coaching Process 99

Lesson 31: Self-Monitor by Keeping a Trading Journal 99

Lesson 32: Recognize Your Patterns 103

Lesson 33: Establish Costs and Benefits to Patterns 106

Lesson 34: Set Effective Goals 109

Lesson 35: Build on Your Best: Maintain a Solution Focus 111

Lesson 36: Disrupt Old Problem Patterns 114

Lesson 37: Build Your Consistency by Becoming Rule-Governed 118

Lesson 38: Relapse and Repetition 121

Lesson 39: Create a Safe Environment for Change 123

Lesson 40: Use Imagery to Advance the Change Process 126

Resources 130

Chapter 5 Breaking Old Patterns: Psychodynamic Frameworks for Self-Coaching 131

Lesson 41: Psychodynamics: Escape the Gravity of Past Relationships 132

Lesson 42: Crystallize Our Repetitive Patterns 135

Lesson 43: Challenge Our Defenses 138

Lesson 44: Once Again, with Feeling: Get Distance from Your Problem Patterns 141

Lesson 45: Make the Most Out of Your Coaching Relationship 144

Lesson 46: Find Positive Trading Relationships 147

Lesson 47: Tolerate Discomfort 150

Lesson 48: Master Transference 153

Lesson 49: The Power of Discrepancy 156

Lesson 50: Working Through 158

Resources 161

Chapter 6 Remapping the Mind: Cognitive Approaches to Self-Coaching 163

Lesson 51: Schemas of the Mind 164

Lesson 52: Use Feeling to Understand Your Thinking 167

Lesson 53: Learn from Your Worst Trades 170

Lesson 54: Use a Journal to Restructure Our Thinking 172

Lesson 55: Disrupt Negative Thought Patterns 176

Lesson 56: Reframe Negative Thought Patterns 179

Lesson 57: Use Intensive Guided Imagery to Change Thought Patterns 182

Lesson 58: Challenge Negative Thought Patterns with the Cognitive Journal 185

Lesson 59: Conduct Cognitive Experiments to Create Change 188

Lesson 60: Build Positive Thinking 190

Resources 193

Chapter 7 Learning New Action Patterns: Behavioral Approaches to Self-Coaching 195

Lesson 61: Understand Your Contingencies 196

Lesson 62: Identify Subtle Contingencies 199

Lesson 63: Harness the Power of Social Learning 201

Lesson 64: Shape Your Trading Behaviors 204

Lesson 65: The Conditioning of Markets 207

Lesson 66: The Power of Incompatibility 211

Lesson 67: Build on Positive Associations 214

Lesson 68: Exposure: A Powerful and Flexible Behavioral Method 217

Lesson 69: Extend Exposure Work to Build Skills 220

Lesson 70: A Behavioral Framework for Dealing with Worry 223

Resources 226

Chapter 8 Coaching Your Trading Business 227

Lesson 71: The Importance of Startup Capital 227

Lesson 72: Plan Your Trading Business 231

Lesson 73: Diversify Your Trading Business 233

Lesson 74: Track Your Trading Results 236

Lesson 75: Advanced Scorekeeping for Your Trading Business 240

Lesson 76: Track the Correlations of Your Returns 244

Lesson 77: Calibrate Your Risk and Reward 248

Lesson 78: The Importance of Execution in Trading 250

Lesson 79: Think in Themes—Generating Good Trading Ideas 254

Lesson 80: Manage the Trade 257

Resources 259

Chapter 9 Lessons from Trading Professionals: Resources and Perspectives on Self-Coaching 261

Lesson 81: Leverage Core Competencies and Cultivate Creativity 261

Lesson 82: I Alone Am Responsible 264

Lesson 83: Cultivate Self-Awareness 271

Lesson 84: Mentor Yourself for Success 275

Lesson 85: Keep Detailed Records 279

Lesson 86: Learn to Be Fallible 283

Lesson 87: The Power of Research 286

Lesson 88: Attitudes and Goals, the Building Blocks of Success 290

Lesson 89: A View from the Trading Firms 295

Lesson 90: Use Data to Improve Trading Performance 300

Resources 305

Chapter 10 Looking for the Edge: Finding Historical Patterns in Markets 307

Lesson 91: Use Historical Patterns in Trading 308

Lesson 92: Frame Good Hypotheses with the Right Data 310

Lesson 93: Excel Basics 313

Lesson 94: Visualize Your Data 317

Lesson 95: Create Your Independent and Dependent Variables 320

Lesson 96: Conduct Your Historical Investigations 324

Lesson 97: Code the Data 327

Lesson 98: Examine Context 329

Lesson 99: Filter Data 332

Lesson 100: Make Use of Your Findings 334

Resources 336

Conclusion 339

Lesson 101: Find Your Path 339

For More on Self-Coaching 341

About the Author 343

Index 345