These are examples of issues that many traders face. They are meant to give you some idea as to what to expect, and how these issues may be dealt with during the coaching process. They are by no means a “cookbook” recipe for specific trading issues, which must be assessed and worked through individually, and may take on very different outcomes.
EXAMPLE 1 – THE EXIT DILEMMA
Our first trader is very upset about a profit that had evaporated on one of his trades. He had decided to hold the stock for a longer-term trend, expecting a pullback, but it reversed and he was stopped out at break-even.
After a little inquiry we learn that on his previous trade, he took profits at the top channel, only to see the trend continue. He beat himself for jumping off too soon, so this time, he avoided taking profits. Digging a little deeper reveals, that this pattern of switching between swing-trading and trend-following has happened several times before.
This trader is trying to trade two systems simultaneously, with conflicting exit rules. He is afraid of leaving money on the table, and this fear – fueled by his latest experience – causes him to switch exit strategies back and forth. In this case, there is a problem with both the trader’s decision making process (unclear exit strategy), and with his mindset (strong emotions following his previous action, affecting his next action).
In trying to figure out a solution, an important question might be “which pain is greater: watching the trend continue after you had taken profits, or having to give back all or most of your profits?”, to which the trader easily responds “Giving back profits. It twists my stomach for days. Every time that happens, I lose all confidence in my ability to ever make money”.
Once the trader faces his preference, he may decide, for now, to focus on swing trading (adjustment to his decision making process). He can then do a certain process to accustom his subconscious mind to detach mentally from the stock immediately after taking profits according to his rules, feel satisfied and not worry about what it will do next (adjusting his mindset).
The next time the same situation arises and he takes profits on a trade, he notices that for the first time he was able to detach immediately after his exit, feel satisfied, and watch calmly as the stock continued to move up without any attached emotion. He even likes this new approach, as the “stay or exit” dilemma no longer drains him of energy on every trade, and after a while his equity curve shows steady accumulation of profits.
EXAMPLE 2 – ENTERING WITHOUT A PROPER SIGNAL
A typical trading mistake is entering a trade too soon, before the signal is complete. Our next trader usually trades off daily charts, looking for a specific signal, and uses intraday charts to better time his entries. She finds herself stopped out of several trades in a row, and at first glance the charts seem to have something in common.
The trader does a walk-through process in which she re-takes the trades, bar by bar, recalling her thought process after each intraday bar. It becomes obvious, that in these cases, she is entering based on small signals on the intraday chart, before any indication has been given on the daily chart. Her actual entry situation is very different than the signal she had described on the daily charts.
Once this becomes obvious, the trader realizes she must set a clearer rule about what signal she expects on the daily chart, before turning to intraday charts. After doing a little research she comes up with a clear step-by-step process for this matter: Only after a strategic decision to enter has been made on the dailies, based on a specific daily signal she has now better defined, will she time the exact entry using an intraday signal. She writes it down, hangs that piece of paper on the wall near her trading station, and makes a point of looking at it before opening her software.
She also decides to make a change in her default screen settings: instead of holding both daily and intraday charts open side by side, she decides not to open the intraday chart until the daily signal is triggered. This should help keep her from being confused.
EXAMPLE 3 – FEAR OF TRADING
Mental blocks on trading can be a major setback. Fortunately, sometimes these can be dealt with very quickly and efficiently. One of the most powerful tools I use in such cases is PSYCH-K®, a set of processes for uncovering limiting subconscious beliefs and replacing them with more supportive ones.
Our next trader notices the following pattern: After a winning streak, he is reluctant to trade. He finds himself doing other things, avoiding looking for new trades. He tells everybody he’s “taking a break after a good month”, but knows that this is not the truth.
A short elicitation process reveals that actually, he becomes afraid to trade, because he fears giving back his profits. In the past, he had had periods of winning streaks followed by losing streaks, overall moving nowhere. Now, after having made a small profit, he fears what he sees as imminent – the next losing streak.
In fact, this trader has been so accustomed to the “win and give back” routine, he subconsciously accepts it as a natural cycle, like the seasons. In order to get back on the horse, he realizes he must free himself from that belief.
Our trader is asked to imagine the situation as he would have wanted it instead, and to describe it as vividly as possible. He describes himself closing for the day after a winning trade, and then starting afresh the next day, looking only forward. He describes in detail how he would look and feel. Using a very simple process which he is guided to perform by himself, he then “re-wires” his subconscious perception of the situation, to this new picture. After the process is completed, he feels relaxed, and willing to resume trading.
If you share my views on the coaching process, I look forward to working with you.
In order to make the most of your first session, I ask that new clients complete this APPLICATION FORM and send it to me prior to the session. It also contains important technical information about the coaching process.
You can contact me HERE if you have any questions about the process.