Thursday Trader's Tip: 4 Steps to Stop Repeating Trading Mistakes
Thursday Trader's Tip editions offer quick trading psychology advice that can be digested in 5 minutes.
Trading mistakes aren’t all the same.
There are two types of trading mistakes:
First-time mistakes
Repetitive mistakes
It is crucial to distinguish between the two and treat them differently.
Knowing how to approach repetitive mistakes is the topic for today’s edition!
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Written Version:
First-time mistakes offer the first opportunity to develop an action plan for the future.
Repetitive mistakes mostly come from deeply ingrained patterns or beliefs and require deeper work.
Traders come to me precisely because they’ve already tried everything in solving a trading issue: meditation, trade checklists, walking away from the charts, logic affirmations, etc — but nothing seems to work.
For that reason, today I bring you 4 simple practical steps that will help you avoid repeating that trading mistake you’re struggling with right now.
1. Recognize the change in mental state
What I observe, though, is that traders are too focused on specific plans of action while overlooking what should come before any — self-awareness.
Some think they hold an insane level of self-awareness when, in fact, it is that same belief that’s making them repeat the mistakes.
Self-awareness is not only about knowing you’re being triggered but slowly pushing the awareness ticker earlier and earlier until you can spot the early signs and manage them effectively.
2. Observe your mind without judgment
It doesn’t matter how early you could identify the problem pattern if you ask yourself, “Why am I feeling this way?” or “You should not be feeling this.”
This type of judgment will destroy your goal of breaking the pattern. If anything, it will only intensify your feelings of inadequacy.
The quality of your awareness increases with your ability to hold a non-judgmental view.
3. Interrupt yourself for 5 minutes
Delaying your mistake is way more effective than aiming not to do it.
Everything we want to stop doing or avoid just grows bigger. This is because “not doing” involves the same neuropathways that the mistake one triggers.
The brain doesn’t understand “don’ts,” only “do’s.” To suppress a neuro pathway, the brain needs to invoke it, which is counterproductive.
It’s just like the white bear concept in psychology — tell yourself not to think about a white bear, and all you’ll imagine is a white bear.
When you sense your emotions rising, kindly tell yourself, “You’re allowed to go for the mistake, but you’ll wait 5-10 minutes before you make it.”
What happens is that after those 5 minutes, the urge will have passed, and your logic will overpower the instinct, making it no longer tempting to engage in the problematic behavior.
So, aim to postpone instead of avoid!
Who would say that the way to stop mistakes is to be more permissible with yourself?
4. Replace the old behavior
Replacing the behavior is about intentional change. When you ask your brain to delay the urge for 5-10min, you want to get busy with something else.
No energy gets lost, only transformed. No habit can be eliminated without a replacement.
Choose a replacement task that calls to your strengths. It can be anything—writing, reading, or drinking water.
If there’s something I want you to bring with you from this post, that is:
Assume you are not as self-aware as you think, and humbly keep working on it.
Choose to delay your urges instead of avoiding them.
Go break that repetitive mistake.
Peaceful trading,
Sara
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Awesome post! Keep it up
I applied your 5 min Interruption technique today prior to executing trades - WOW what a difference in mind set it creates! Allows you to see clearly the setup or lack thereof and creates a stress free environment. Those times when the setup wasn't there it allowed me the time to re-frame the urge to be in the market. Many thanks for your valuable insights. Trading is a continual work in process.