Trading Psychology Edge: We Share What Works For Us // Ep. 7

In This Episode

• Tools for upgrading your trading psychology
• What works for Walter and Hugh
• Why you should use a manual trading journal

Here's Our Trading Psychology Edges

Learn what we think is our trading “superpower” in this episode of the podcast.

We also talk about trading journals, awareness and how to find the sources of your behavior.

Read the Transcript:

Hugh: Hi, Walter! What do you think your psychological edge is? I know we always talk about trading systems and having a trading system edge but what about a psychological edge? What do you think yours is?

Walter: That is a good question. So the way I look at it is that, a lot of traders — especially the ones that are kind of new to the markets — those are kind of like the easy ones to take money from because this isn't really kind of an area for them.

In a lot of cases I guess and so my edge really is that I realize that this is where I need to focus on. Do you know what I mean?

Hugh: Yeah.

Walter: So that means doing whatever I can to be — there's two parts — aware of what's going on psychologically and then to improve my Psychology. There's lots of different tools for that and lots of methods for both.

If you want to become aware, there's journaling. There's meditation. They are just like becoming more mindful. I know that's like a buzz word nowadays but that kind of thing. That's a little bit easier I think for introverts because introverts are — which I classify myself as because — introverts kind of, we think more about, we like time alone and time to decompress.

We think more about what's going on here. So I think being aware of it and then having a plan to improve those are the two things I think that everyone needs because if you don't have awareness then you know, you've got nothing.

So that's how I see it. What about you? What is your take on that?

Hugh: I think the biggest gains have come from awareness basically. Just trying to pinpoint what the issues are and then finding out the true reason behind those issues or the true cause of those issues, and not saying, “Oh, this is just you know I am just revenge-trading.” So why are you revenge-trading?

Are you mad at your mom from when she was like you know yelling at you and your kid or something? So just getting digging into that I think really gave me that awareness. I think for me at least, awareness is the number one thing also.

Hugh: Hey there! I hope you find this episode useful. I just want to let you know that Walter and I give away something valuable every month that helps traders improve their skills. You can enter to win by simply leaving an iTunes review and leaving a comment on our YouTube videos.

At the end of each month, we'll look at the comments and reviews from the month and we'll pick a winner at random. Each comment and each review counts for one entry during the month that it's pitted.

So, if you're interested in that, be sure to enter after this podcast is over. Alright back to the episode.

Walter: Yeah, that is so true man. You just really need to start at awareness. It's like a kid you know when they are growing up. They first got to get their motor development down. If they can't use their voice and walk and use their legs and their hands and their fingers, they’ve got to get that first.

And then once they get that then they can become you know like a star tennis player or whatever, expert on AI. Exactly and so that's it. I am totally down with that. For most people journaling is going to be the easiest thing but I think you have to be careful because journaling is something you know people think and I thought — I did this — when I first started doing my journals.

All I really did was, I would take a screenshot of my trade. I actually found my old journals from 2004 or something, no. 2005, 2006 and so all I did was I took a screenshot of my trades. I printed them out and then I wrote what the trade was. What system. Why I took it, do you know what I mean?

So I had a before and after shot of all my trades and that was cool but that's not really what we are talking about. We are talking about what you think. So it's more of almost kind of like a diary of your trading development and that's really good. I have those too but that's kind of the key I think, is for awareness.

It is to dig into that and it's so much better if you write it than type it. I know everyone wants to type and to some people maybe it makes sense to speak it. There's enough voice to text things software out there that can do that for you but it's really tricky to do it right. Because it's so easy to say you have a trading journal but that might be just kind of like a trades journal, do you know what I mean not a trading journal. So there's a difference.

Hugh: It's interesting you mentioned that because I've been going over mine right here and it's just kind of like a little notebook that I check off. These are the trades I took. This was the result. From there I put it into a digital journal but I found that like just marking it off. This really helps me at least through my trading.

Walter: It activates different areas of the brain and you'll remember it better and all that. It's so easy to get sucked into the fancy online tools and stuff. They are great trading journals out there but I think that's the way to do it for sure.

Hugh: I think part of it is also discouraging. When these journals are too complicated and you have to fill too many forms. I was like, screw that and you just stopped doing it. Alright, cool. Thanks, Walter.

Walter: Thank you.

Hugh: All the information in this podcast is for educational and informational purposes only and is not trading or investment advice.

Enter the Monthly Contest

We give away a trading prize every month, so be sure to enter to win.

You can win by doing one or more of the following:

• Leave a comment on YouTube
• Leave a review on iTunes

Each action counts for one entry in the month that it was posted. We will pick a winner at random from the entries that month.

The giveaways can include books, coaching sessions, trading tools, or surprise gifts.

It will usually be something that will help you improve your trading psychology. 

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