Thursday Trader's Tip: Replacement Activity
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Voiceover
Welcome to Thursday Trader's Tip — the free edition of The High-Performing Trader newsletter. Each issue presents to-the-point trading psychology advice that can be read in under 5 min.
This week's post revolves around the replacement activity for breaking a habit.
Habits can’t be eliminated, they can only be replaced.
When trying to break a trading habit that’s been undermining your execution, you need to choose a replacement activity—an action you execute to substitute the old behavior.
When traders solely aim to break the undesired habit they incur the risk of replacing it with an equally bad one.
I'm sure you know someone who has tried to quit a bad habit like smoking or alcohol, but instead replaced it with other harmful habits such as over-eating, over-shopping, or over-working.
They succeeded in quitting smoking, but their choice of replacement activity was unsuccessful.
So how can you ensure that you choose the right replacement activity for yourself?
There are four requirements for the replacement activity:
It must be healthy.
It must be stimulative.
It must be easily accessible.
It must generate positive emotions.
Take the example of a smoker—choosing reading as a replacement activity might lack the necessary stimulation. Instead, replacing it with an energetic sport that pushes his interest is more likely to keep him out of boredom and alleviate his stress (triggers for smoking).
The key is to know your triggers very well.
Trying to stop impulsive decisions with positive affirmations might not be enough in trading. But doing push-ups could be a better replacement—it interrupts the pattern and gives you a burst of positive energy. Plus, it's as accessible as finding a spot on the floor.
So choose the replacement activity you’ll use to break your bad habits and then, intentionally repeat it every time you spot yourself being triggered.
Happy trading,
Sara
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