Breaking Bad & Building Good Habits: The Gateway To Trading Success

Habits are the mainstay of the human’s existence. We have habits for everything, from the time that we get out of bed till the time we get back in. That also includes sleep habits. And, by-the-way many or most of them are unconscious. We cannot escape it but, conversely, must embrace the process and begin a systematic purging of the bad and identifying, nurturing and building new empowering habits, especially as it pertains to trading.

The trade is one of those places that attracts habits like honey attracts flies. But the question often asked is, where do habits come from? and how can I change them?. Briefly, let’s look at how most habits are formed and how they operate in plain sight often rendering the poor individual feeling as if they are in a bad movie that can’t be turned off.

Experiences are what affect neurology and psychology, kicking the process off. In other words, when you are met with a highly impactful experience that is painful or euphoric, the brain takes a neurological snapshot by encoding all sensory information in a state-bound way. What this means is that not only will you interpret the experience/event as being good or bad, you will be triggered back into that emotional state whenever you encounter a situation that is similar.

For example, let’s say that in violation of your rules you moved a stop and, as a result, had a much larger loss which not only hurt financially but emotionally left you feeling angry, sad, doubtful and incompetent. These emotions begin to ignite other thoughts that may eventually lead you down a rabbit hole of misgivings about whether you will lose all your money and become homeless. Now granted, this is an extreme example; however, you may be surprised to know that these thoughts are in the background of many traders’ minds after they have violated rules and felt the sting of loss. It’s just that these extreme thoughts are operating out of awareness and are outgrowths of limiting beliefs about you and your abilities. After you engage in the rule violation a few times it becomes a default or automatic action. In other words, it has become a bad habit.

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