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  Indeed, being stressed is no treat!  Stress typically occurs when we perceive threat.  That places our bodies in the classic flight-or-fight response, mobilizing for coping with the threat.  That mobilization draws blood flow away from our brain's frontal cortex, leaving us least grounded in our center of planning and reasoning just when we most need our rationality.  This becomes a particular problem when stress turns into distress:  anger, frustration, anxiety, etc.  As I emphasized in an earlier post , our first response to stress should be to identify where it is coming from.  In general, there are three sources of trading stress: 1)  Markets have changed, no longer behaving in ways that match our expectations.  In such an event, our stress represents information.  Just as we might feel uncomfortable if we should walk from a safe place to a high crime area, our stress in the new market environment alerts us to potential dange...

  A lot of trading wisdom repeated by traders is surprisingly unintelligent.  A good example is the mantra that it is important to "have a process" for your trading and follow that process religiously.  Sounds great--until markets change and the process that worked in one kind of market no longer works.  If a business repeated a process endlessly, it would never adapt to changes in consumer tastes, new opportunities, etc.  Similarly, a singular focus on "discipline" is shorthand for a failure to innovate. Which brings us to yet another piece of common wisdom that masquerades as wisdom:  Be patient and only put on your very best trade ideas .  Sounds great!  Don't overtrade and wait for the really good "A+" opportunities. Not so. In the most recent post , I outlined my approach to trading, highlighting finding opportunities in which detecting market cycles allows for good risk/reward entries in established trends.  What is interesting about th...

  If you were to listen into the conversation of a basketball coach with a player, you would hear quite a bit about how to play the game.  The coach might talk about getting back on defense or working harder to get position on rebounds or taking the high percentage shot, but the conversation would be about playing better.  Whatever needed to be addressed in terms of psychology would be embedded within the coaching regarding the playing .   For example, if the player is not taking the high percentage shot at the top of the key (a failing for which I vividly recall being taken to task), the coach will address the psychology by making it abundantly clear that he believes in you and that you will never be blamed for missing a high percentage shot.  The coach might also include a ridiculous number of top of the key jumpers in the next round of shooting practice.  Such coaching *very* much addresses psychology, but in the context of actual playing. Oddly, tr...