Thursday Trader's Tip: Master Your Trading Goals with The WOPO Technique
Thursday Trader's Tip editions offer quick trading psychology advice that can be digested in 5 minutes.
Do you struggle to set trading goals effectively?
Are you so focused on the outcome that the process gets neglected?
In today’s edition, you'll discover a powerful technique to help you set and achieve your trading goals more successfully.
Related reads:
Written Version:
In 2009, a study explored the WOOP (Wish, Outcome, Obstacle, Plan) technique for enhancing academic performance among schoolchildren.
The study taught children to identify a meaningful, challenging, yet achievable academic wish, visualize the best possible outcome of achieving it, pinpoint the biggest obstacles, and develop "if-then" action plans to tackle them.
The results? Those who applied the WOOP technique significantly outperformed peers who had only identified and visualized a goal.
This approach can also be transformative for traders. Many traders set their goals and intentions for a session but often fail to identify and plan for the obstacles they might face.
By planning for potential obstacles, you remove the element of surprise that can trigger a fear response. Your confidence in overcoming and handling obstacles grows because you know what to do when they arise.
How can traders apply the WOOP technique for better goal setting?
I suggest a small shift: instead of WOOP, let’s call it WOPO, where we replace the “Outcome” with the “Planning.”
Wish
Define a process-driven goal. It is important to set trading goals related to the process—things under your control that you trust will lead to results.
Obstacles
Identify the obstacles to achieving that goal. For instance, if your goal is to eliminate impulsive entries in your trading, what obstacles might arise?
There are many emotional challenges you might face. You might struggle to manage your decision-making, get distracted, or fail to recognize your emotional state until it’s too late.
Some obstacles might be scary to admit and identify, but it’s crucial to do so because then you can plan for them.
Plan
Consider an obstacle like poor sleep, which can affect your focus and energy and lead to impulsivity. How can you plan for this?
If you're too tired to trade, you could skip it. If you still want to trade, you might take more breaks to recover focus, go for a morning walk to gain energy, or engage in non-sleep deep rest sessions.
Whatever your plan, make it objective and clear.
Outcome
Visualize after planning. Unlike the students, you should visualize achieving your goal and overcoming obstacles with your action plans. This acts as exposure therapy.
Close your eyes, calm your mind, and imagine a trigger for impulsivity arising. Then, visualize yourself executing your action plan and successfully overcoming the trigger. Repeat this visualization to strengthen the neural connections in your brain, and you’ll be effectively pre-practicing for real-time scenarios.
Setting goals for your trading is essential, but it needs to be done the right way, or it has the opposite effect.
Instead of using the traditional method of setting goals, implement each step of the WOPO process—wish, Obstacles, Plan, Outcome (visualization)—to increase your chances of succeeding.
Peaceful trading,
Sara
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Nice post, I like the part in “Plan.”
Keeping the mind and body sharp with good sleep, exercise, and diet is undoubtedly going to help you make better decisions in markets and life in general.