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Becoming your own Trading Coach


In a blog titled Letting Profits Run: A Guide to Becoming Your Own Trading Coach Brett Steenbarger from Naperville, IL says:
quote:
We set our profit targets and trade strategy while we are in one state of mind but then, as the trade progresses, we enter an entirely new state. That new state very often involves worried thoughts about losing unrealized profits or having gains turn into losses. It generally brings an elevated heart rate, increased muscle tension, and more rapid and shallow breathing. As we become aware of the nervous feelings, that helps to perpetuate the negative thoughts and altered physical state, which in turn can amplify the anxiety. Very often, cutting positions short before profits can run is simply a coping device to manage this anxious state. We exit the position for emotional relief, not for reasons of sound strategy and money management.

I think that he sums up one of the psychological problems in trading very well and states in eloquently. I hadn't thought about it like that before but it makes a lot of sense.

If I draw parallels to my own experiences I can see that happening to myself. For example, when I was at school I found that I did much better in real exams than I did in mock exams. This was probably because I was in a different frame of mind for the two different types of exams. One would presume that my heightened sense of urgency or adrenalin in the real exam helped me focus and perform better.

When comparing simulated results to real results you may find that the difference in performance can be attributed to a similar shift in your mental state.
Nice!!! he definitely has one of the most readable trading blogs.