The Enemy Within:
Self-Sabotage in Trading
How to Identify and Eliminate Self-Sabotaging Habits
It’s no secret that self-awareness is a trader’s superpower…
The ability to recognise when you’re in self-sabotage mode is the key to unlocking better discipline.
- Overtrading
- FOMO
- Holding onto losers
- Deviating from the plan
Psychologists will tell us there’s a reason for all of this.
Childhood, our relationship with money, past experiences, etc etc.
I’m not as smart as these guys, I don’t know why, I just know I want to identify and eliminate any whiff of self-sabotage in my trading.
THE BIG FOUR
These are what I consider the “Big Four”
The mega challenges that catch most of us out at one time or another
The twin saboteurs: fear and greed
Perfectionism: chasing the illusion of a perfect trade
The trap of comparison: staying true to your strategy
Impatience and impulsivity: the need for instant gratification
The good news? I think that all of these can be mitigated or at least reduced with some simple steps:
- Slowing things down – quick decisions are often based on fear, greed or wanting to be right. If you take time to consider your decisions, often that’s enough just to think more clearly about things.
- Observing the tone of your self-talk – Self-sabotage speaks a very different language from calm, collected market observations.
Listen to the tone of your inner voice, does it sound emotive or clear and rational?
That voice telling you to buy at the highs right now… Is it an objective assessment of momentum or emotional FOMO? - Accountability – It’s a lonely business, you can be the most seasoned trader with a lovely track record and still fall foul to the isolation demons.
Find a trading group, a trading buddy or a mentor. But choose carefully…
It’s tough, but worth it…