In our last email we showed you how Benchmarking calibrates you and your trading personality to the markets you trade with the system or trading approach you use.

If Benchmarking calibrates the relationship between you/your markets and your trading method, wouldn’t it be great if you had more control over your own trading personality and those troublesome automatic reactions that get you in trouble?

Want to stop revenge trading? How about analysis paralysis? Those are flip sides of the same coin. A typical conservative trader can freeze up after getting triggered by a significant loss or series of losses. That’s what we call analysis paralysis.

More aggressive traders feel a strong urge to try to overcome these losses by rushing into more trades, hoping they will finally get back to being profitable. Revenge trading typically results in digging a deeper hole.

Aside from having auto-trading software that totally takes the emotions out of trading (there are significant disadvantages to auto-trading software), professional traders first rely on a true Boolean logic mechanical system to remove all subjectivity and discretion from their trading. The TradeSafe System is that type of system.

Even with a mechanical trading system there are external components that are not part of the system itself, and which can influence the outcome of a trade. In an earlier blog post, we addressed these conditions which are referred to as contextual variables.

Aside from the typical contextual variables such as support and resistance, etc. an often-overlooked variable that can have a significant impact on a mechanical system’s consistency is the actual mental state of the trader. Often referred to as trading discipline, this topic of trading psychology is the last frontier of trading because very few traders pay close attention to their emotional state when placing a trade.

There are many methods touted in this industry that claim to manage or control trading discipline. Most of them are useless. This is because they do not address the actual origin of self sabotaging behavior in trading.

Traders who believe that their emotions don’t have any impact on their trading are deceiving themselves. Also, traders who claim that they don’t feel anything when they trade are also deceiving themselves.

It’s easy to understand why a trader will claim that they don’t notice any emotional response when they take a trade or after it is over. This is because the source of their emotional impulses resides out of their awareness, in their subconscious.

So how do you identify and correct behavior that originates out of your awareness? Traders make the typical mistake of assuming that their subconscious automatic reactions are a result of their trading activity itself.

Actually, trading is not the source of their automatic behavior, but rather a stimulus that triggers “programming” embedded years before in their subconscious. Therefore, trying to address emotions connected to a particular trading condition misses the point. You need to address the underlying fundamental emotional response that was first created years before – typically, as a child.

This blog post is not meant to address how to psychoanalyze traders. Instead, now that you understand that trading itself is not the problem, but merely a trigger for a stimulus-response reaction, let’s examine a useful tool that can neutralize self-sabotaging behavior.

A powerful tool that has documented proof over the last 30 years, first used to help treat PTSD in our returning troops after the first Gulf War, it has become more widely accepted since then. Professional athletes have discovered how this tool can support them in overcoming counterproductive behaviors. In essence, the goal would be to maintain a high level of excellent performance under stressful conditions. Trading would qualify as such an environment.

Essentially, there are two parts to the process of using this tool. First, is identifying the underlying emotion or feeling itself and then assigning a numerical strength value to it from 1 to 10. Next, simply following the mechanical steps that lead to lowering the numerical strength value of the emotional reaction – often down to zero. At that point, the behavior no longer will occur as an automatic reaction to any stimulus that would have originally triggered it.

The technique is simple enough for a child to use successfully. It can be applied to any condition where you experience an automatic reaction or behavior that is counterproductive. For traders, this brings you closer to being a neutral trading machine.

Rather than attempt to teach the basics of this technique here, it would be more effective to direct you to other resources. Once you investigate them, please do so with an open mind. Remember, this technique has a long and proven history, so take it easy and give it a fair chance.

An authoritative resource for this technique can be found at . There are many resources on that site, including a free manual that you can download.

It is recommended that you start slowly and try it out on simple behaviors that you wish to change. Don’t make the mistake of trying to use it right away on your trading.

Once you are up to speed with it, you will discover it has universal applications to virtually all areas of your life. As the saying goes “try it on everything.”

Stay tuned for our next installment!

To learn more about TradeSafe, please click HERE

To watch a Replay of a recent online workshop about the TradeSafe Mechanical System, please click HERE

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