Lessons from the Pros

Specialty Skills

The Three D’s to Getting Your Trading Back on Track

Have you ever sailed along in your trading for weeks doing everything right and then one day it happens…a fog descends around you and you lose all touch with reality; and before you know it you’re trading like a wild person smashing rules like cars in a demolition derby?!? And when it’s all over, you take a look at the carnage on your screen and wonder who was trading your account…while at once realizing that it was a “negative trader trance” where a couple of tough trade losses sent you spiraling downward until you lost connection with your highest-and-best trader and began to revenge trade…totally out of control? Even though part of you recognized that you were spinning towards that brick wall, you simply disregarded any semblance of good judgement and barreled ahead until the last trade was closed to another loss and your self-esteem and self-respect lay in a debris-strewn heap on the floor of your platform.

If this scenario in the above was you, then don’t beat yourself up, I was there once as well. In fact, many, many traders get caught in a spiral of issues that are driven by a bad pattern of thinking, believing and negative emotions that cause them to become inconsistent and they end up feeling like nothing can be done about it. You can’t change what you can’t face and you can’t face what you don’t know. You must gain awareness of your unconscious limiting beliefs that drive unconscious conversations, which motivate behavior that is not in your best interest. The fact of the matter is that you are only aware of a small part of what is going on in your brain/mind. The largest part of your thinking is out of your awareness, or unconscious. See, the mind is like an iceberg, the tip is the only part that can be seen above the water line and, comparatively speaking, it is a very small part of the whole. The rest of the iceberg is huge and it is below the water line. Your consciousness is very similar. Your conscious thoughts are but a small portion of the mind, the overarching part of you that controls all of your involuntary behavior like breathing, heartbeats, cell function, growth, immune system, etc., is the sub-conscious, totally out of your awareness and so, holding much of your thinking and beliefs. That is how it’s possible to have unconscious conversations that are driven by unconscious limiting beliefs. These limiting beliefs, for example, I’m not good enough or I don’t deserve to win;” drive unconscious conversations like “… I shouldn’t enter this trade – but I want to because it might go in my direction – and I’ll be right– and I’ll make money– and I’ll feel good.” You’ve got to root out the limiting beliefs that drive the unconscious conversations by becoming aware of them through self-reflective journaling and introspection, uncovering level by level to find what’s lurking under there.

One of the practices that can help is called the Three “D” Process. The first D is for Discovery. After you have identified an issue, like chasing trades; you can ask yourself: a) what emotion am I feeling? b) When this happens what am I telling myself? c) What belief is causing this emotion and/or feeling? After you have identified an answer, don’t stop there, keep inquiring and pulling back layers by posing additional relevant questions. Asking good questions is a valuable routine and use of your time as it uses journaling, appreciative inquiry and good personal research.

Free WorkshopThe next D is for Decide. Once you have the information about your internal thoughts, emotions and beliefs that are driving behaviors and in turn creating results that you don’t want, it’s time to analyze and decide on tools that could be instrumental in helping you to overcome and resolve these issues. For instance, there are many reprogramming tools available to you like hypnosis, changing beliefs tool (a Neuro-Linguistic-Programming method), emotional Freedom Technique ( a tool derived from acupuncture that can help you lower and, in most cases, neutralize emotional tension), and anchoring (another Neuro-Linguistic Programming tool that uses your own powerful experiences to handle errant emotions in the moment). All of these tools and the people who teach them can be found on the internet or in your bookstore. Also, OTA teaches these and other tools, techniques and concepts designed to support you in successfully addressing your issues once you have identified them.

The last D is for Design. Most people live by default; that is, they just allow their thinking and therefore their doing to just happen. Also, when negative things happen, many people react automatically which usually means that their behavior is driven by negative thoughts and limiting beliefs. When you do things automatically from negative thoughts and limiting beliefs, rarely do you get positive results. It is much more powerful to live and trade by deliberate design. Trading deliberately means that you identify what you want to accomplish; which in this instance involves personal change and addressing issues, then design your response by considering the tools you have available to you. Next, make sure that you know how to use the tool. Then devise a strategy for both the tools and when you will apply them.

Measuring your trading process, as with anything where you want to excel, is a requirement and it can’t be overstated. There are measurements of Mechanical Data (indicators, price action, time frames, money management and risk management, news, etc.) and as well, you must measure your Internal Data (your thoughts, emotions, limiting beliefs, biases, values and behaviors) both of which must be tracked and managed. All too often traders focus most if not all of their efforts on mechanical data and miss the fact that whatever you do begins with what and how you think. Negative thinking and uncomfortable emotions have a way of throwing monkey wrenches into your trading works. So, the Three D process is a very important way to keep your trading on target. Also, another way to help you stay on target is to read my book; “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading

Dr. Woody Johnson


DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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