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  There is a very important difference between acting on desire and acting on commitment, as anyone in a successful long-term romantic relationship can attest.  If a relationship is only about desire, it quickly burns out and fails when circumstances call for commitment.  Successful relationships translate desire into commitment:  it is because someone is incredibly emotionally special to me that I am committed to them. Many traders begin with a desire for market success, but never get to the point of commitment to the practices and processes that lead to ongoing profitability .  They love trading, but are not in love with markets.  As a result, they never put the time into truly understanding markets and their dynamics, which is a vital component of trading success. In a recent Economic Times article , Anupam Nagar reviews ideas from my books and stresses the importance of achieving trading success by building upon one's strengths.  It is not enough t...

  It was great getting back to SMB Capital and being part of their first ever annual trading event.  I was especially impressed with the expanded mentoring being offered to developing traders.  This includes virtual "office hours" meetings to discuss trading in real time; intensive step-by-step teaching of successful trades from Lance Breitstein ; and detailed modeling of winning options strategies from Seth Freudberg .  It was especially rewarding to see traders I knew as developing professionals who are now successful and offering mentoring to the newbies, including Garrett Drinon , Justin Spero , Carlton Bryan, Jeff Holden, and Max Ganik .  Congrats to Steve Spencer and Mike Bellafiore for their work in building an impressive learning culture.  My greatest takeaway from the event, however, was the tremendous enthusiasm and interest in learning among the participants.  There was an electricity in the group, as traders were eager to network, learn ...

  *  Setting just one goal for change and working on it consistently for at least a month:  it doesn't lead to revolutionary change, but it creates the evolutionary change that lasts. *  Very interesting research from Concretum Research regarding time of day when SPX tends to make intraday highs and lows.  Not too surprising that highs and lows for the day are made when market participants are most active.  This sets up valuable research on relative volume, intraday trends, and probability of trend days.  Would be interesting to see how these stats look for individual stocks, particularly ones with lower institutional participation. *  Following the observation of Mike Bellafiore , it's so, so, so important to experiment, experiment, experiment when learning trading and see what makes sense, what grabs your interest, and especially what you do well.  Too often, traders are so eager (and needy) to make money that they cut their learning pro...

  We internalize what we do consistently. If we consistently avoid effort, we will internalize lack of initiative.  If we consistently reach out to others with love, we will internalize warmth and caring.  Change begins with doing .  Simply shifting goals or mindsets will not produce lasting change. Notice how athletes work out in structured routines.  Surgeons learn their craft by following evidence-based procedures and following these faithfully.  Performing artists master their craft through feedback and repetition.  When practice and performance are process-based, something important happens psychologically:  We internalize a sense of discipline and self-control.  Consistency of preparation and practice creates consistency of performance . To change ourselves psychologically, we can start with just one improvement we wish to make and create a routine for implementing that shift every single day.  If I want to internalize a sense of p...

  *  Every trade plan is an opportunity to work on our psychology , training us to act on opportunity and not react to fear;  *  Lance Breitstein does a great job of explaining why success in trading requires investment in ourselves; *  Such a valuable point from Adam Fiske :  What indicators/signals do you track regularly to tell you *not* to trade? *  Jeff Holden from SMB Capital observes that we need to work on proper bet sizing --and understand the relative degrees of edge we have in trades--before we start betting big; Have a great finish to the week! *

  It's one of the great paradoxes of psychology that when we run from something we fear, we are most likely to encounter it.  The important principle here is that we internalize what we do.   When we act on a particular premise, we reinforce that premise in our minds.  Thus, when we run from a feared outcome, we end up reinforcing that fear. An experienced trader recently reached out to me regarding the fear of not being right when in a trade.  Psychologically, that means we're taking being wrong as a threat.  The threat of being wrong can become so strong in our minds that we take off the position before it has a chance to be right! Every trade plan is an opportunity to work on our psychology.   When we set a stop loss for a position, we want to use that stop to intensively mentally rehearse what we want to be doing if the order is triggered.  Very often, we can get stopped out of a trade, but nothing happens to invalidate the idea behind the tra...

  The right mindset won't substitute for a rigorously developed edge in the markets, but the wrong one can certainly undo all our training and experience.  Here are some valuable trading psychology perspectives that can help you make the most out of your experience: *  It's not enough to control our emotions and stick to time-tested processes.  We have to actively develop a positive mindset if we're going to maximize our creativity, productivity, and performance. *  Akil Stokes offers a diverse trading psychology podcast for developing traders. *  Valuable trading psychology videos and tweets from Yvan Byeajee . *  Here are two valuable books on trading psychology:  The Mental Game of Trading by Jared Tendler and Mastering the Mental Game of Trading by Steven Goldstein . *  This is the focus needed for successful trading.  If we need to make money, markets control us. Have  a great finish to the week! - Brett

  Working on mastering the psychology of trading is different for beginning/developing traders and for experienced traders.  I have worked with rookies at proprietary trading firms, and I have worked with experienced money managers who guide large teams.  The psychological challenges faced by the two groups are entirely different.  What you need to do to master your trading psychology very much depends upon where you are at in your learning curve . Here is an analogy that might clarify things.  Freud's revolutionary contribution to psychology can be found in his dictum, "Where id was, there ego shall be".  The id represents our basic, primal instincts: our flight and fight tendencies.  When we are triggered by past, unresolved conflicts, we tend to regress to our instinctual mode.  The purpose of psychotherapy is to help a person process their issues and feelings in the medium of a helping relationship.  This enables them to gain perspective ...