Self-Mentoring or Trading from your Couch

Self-Mentoring or Trading with OlympTrade from your Couch
Self-Mentoring or Trading with OlympTrade from your Couch

Are you aware of your physical and psychological state while you’re trading? While a trader works in the market, their brain is subjected to several different types of stress. A trader receives an overload of information as soon as they log into a trading site. He is forced to react to many changes instantly.

Deceptively Easy

If you imagine trading consisting of relaxed keystrokes. While you’re somewhere under the tropical sun on the shores of a beautiful sea. You mistaken

The sea or the sun simply can’t compensate for the emotional rollercoaster that a trader experiences while working. Although the control of emotions are quite often discussed as the solution to the psychology of trading. Getting rid of emotions is practically impossible.

How to Handle Your Emotions

A clear strategy for handling the emotional component of trading can reduce them substantially. It is not possible to eliminate them totally, nor is it necessary. It is in fact possible to use your emotions in a positive way. In this article, we’ll briefly touch on this subject.

We have all seen movies where an individual visits a psychotherapists. The script normally reads that the patient is asked to lie down on a couch. In order to make them as comfortable as possible. Once they have settled in, the patient then starts talking about their problems.

Your Inner Observer

The function of the psychotherapist is to help the patient access what is deep inside them. In his book “Psychology of Trading”, Brett N. Steenbarger suggests that the same approach can be used in trading.

His “trading from the couch” concept suggests. That when financial market operations are carried out, traders should analyze their emotional state. In the same way psychologists analyze their patients. Steenbarger refers to this process as the “activation of the inner observer”.

The Trading Mentor Method

Several interesting techniques are used to achieve this activation. An exercise known as “The trading mentor” is one example. This technique suggests. Transactions should be opened as if a beginner is being taught in order to help them become a successful trader.

If you imagine that any position that is opened or closed is the student’s position. You can then determine what you would tell the student if things go well. Similarly, decide what you would tell the student if a transaction is not profitable. What advice would you give the student about the exit, or if they want to hold the position?

A View from The Outside

What you’re trying to achieve here is to become an effective mentor for yourself. Once you have gone through the exercise of advising the fictitious novice trader. Compare what you told them with the inner dialogue you would have had before, during and after the trade. Applying the “trading mentor” technique will enable you to look at each trade from a different perspective. This will allow you to avoid mistakes you may have made. If you didn’t look at the trade from a mentor’s viewpoint.

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