The Daily Trading Coach by Brett N Steenbarger

Author:Brett N Steenbarger [Steenbarger, Brett N]
Language: eng
Format: epub
ISBN: 9780470456675
Publisher: John Wiley & Sons, Ltd.
Published: 2010-05-10T14:00:00+00:00

LESSON 52: USE FEELING TO UNDERSTAND YOUR THINKING

One of the best ways to identify the automatic thinking that could most jeopardize your trading is to track your strongest feelings. In the cognitive framework, how we feel is a function of our perception: how we see things and how we interpret what we see shape our emotional responses. When our interpretations of events are extreme, we’re most likely to respond with extreme feelings. Those occasions in which we look back at our behavior with embarrassment, wondering how we could have blown things so out of proportion, are most likely reflections of times in which we were controlled by the automatic thoughts from distorted mental maps.

If, say, I think about the times in which I most completely lose my temper, they would be occasions in which I want to accomplish something but find my path blocked for no apparent good reason. Perhaps I’m trying to get to an appointment on time and find myself behind a slow driver who is absorbed in a cell phone call. Or it could be a situation in which I’m trying to accomplish something with a trader at a firm, but find myself stymied by a bureaucratic response. The thought behind my temper outburst is, “I have to get this done, now!”

Often these are situations that aren’t life or death: they don’t truly need to be accomplished there and then. My schema says, however, that if something doesn’t get done now, that would be awful; it would be a catastrophe. I am responding to my own internal should and must, not to the objective demands of the situation. The exaggerated emotional response is a tip-off to an entrenched thought pattern that distorts my perception.

When we turn a desire into a demand, we mobilize the body and respond with stress.

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