Pithy Precepts of Trading Psychology

Over the years I have created and collected the following pithy “precepts.” These precepts are trading and investing guidelines that give a compass heading to trading integrity.

I offer them to you in their raw form. Some may make sense, others not. Please feel free to question, challenge, refine and edit with your responses. Some of these will end up as chapters in my next book.

• We are who we are and we start from where we start
• Each of us brings unique strengths to the markets
• Every morning we agree to play as delighted beginners
• Reality Pays. The more our minds model the market, the more in synch we get
• We build on our strengths and manage everything else.
• The outcome we have is the outcome we want
• If what you are doing isn’t working, first check your internal models
• Our internal process is more important than anything else because it drives everything else
• You have the resources to improve your mental trading game. Coaching just helps find them
• We begin our trading practice slowly and build it with flow and grace
• Lean into fear. Fear is a primary cause of failure
• If you are frustrated with the markets, you are more attached to your models than reality
• We increase the level of our awareness rather than the intensity of trading
• As we expand our awareness, our interventions will happen sooner and be more creative and effective
• We respect ourselves and celebrate our profits no matter how large
• If we can experience a new behavior for a moment, we can experience it for a minute, an hour, a week, a year
• Change happens when we experience a new behavior that is aligned with who we are, feels emotionally satisfying in the moment and takes us to where we want to go
• Avoidance is buying pain on credit with interest
• If self-criticism made us trade better we would all be rich
• We allow the markets to breathe through us
• The markets are messy, our information is imperfect, our systems will fail and we can still make money
• All trading systems are successful in some markets, all trading systems will eventually fail in all markets
• The markets don’t care about you or your position
• We seek the practice rather than the result
• Learn about yourself with the delight of an anthropologist finding a lost tribe
• We make internal maps of the market, but our maps are always distorted
• Our negative responses are created by our maps, not the market
• By changing our map, we change how we respond to the markets
• All our trading errors have an ultimate positive purpose or intention
• There is no “failure” just feedback
• You have all the resources you need, although some may be out of your awareness
• The more you fear, the less you see. The less you fear, the more you see.
• Every thing you want is outside your comfort zone.
• We react to our interpretations, not reality
• We do not believe because we experience, we experience because we believe
• Human events haven’t even happened until the frame has been selected and the meaning assigned

Feel free to add your own to the comments below:

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90 Day Trader Transformation program replaces reactive emotional trading with personal awareness, acceptance and new actions that support consistent execution and strategy confidence to get you to your trading goals. Traders Compass is now available for enrollment. Go here for more information.