There is no need to reiterate that when ti comes to trading psychology, Brett Steenbarger is one of the best not only because he has worked for top hedge funds but more because he makes such a complex subject very easy to be understood. In today's blog post I want to share his latest writings:

"If markets were perfectly ordered and static, we could discover a trading edge and exploit it for all time by doing the same thing. Because markets are not static, doing the same thing ensures that we will eventually become dinosaurs. Adaptation--the ability to change in response to market environments--is essential to longevity in markets.

Traders typically recognize the importance of learning and growing in their work. The need to focus on markets and the wealth of market-relevant information often means that we spend far more time managing positions than managing ourselves. Like a business that is executing well in the present but not preparing for the future, many traders convince themselves that following a routine makes them "process focused." Sadly, they lack a process for innovation and adaptation.

So how can traders become better change agents? Here are three processes that can enhance fresh, creative thinking:

  1. Process Old Information in New Ways: Write out your thinking in stream of consciousness fashion, not censoring or editing any of your thoughts. Let yourself jump from idea to idea without worrying about whether the connections make sense. If you aren't comfortable with writing, you can talk your stream of consciousness aloud into a recorder. Very often you'll discover new connections and associations that will lead to fresh ideas. Many times talking aloud or committing thoughts to writing helps us become aware of things we know but don't know that we know. It's a great way to bring intuitions to the surface, so that we can act upon them.
  2. Process New Information: It is easy to fall victim to tunnel vision. Look at markets other than the ones you're trading: what story are they telling? Look at sectors within the stock market; look across different commodities and currency pairs. Very often we can pick up patterns once we survey the broad range of financial markets. The same principle applies by looking at time frames other than the ones we trade: what looks like a trend at one level of resolution could look quite different when we zoom out and examine the bigger picture.
  3. Turn Learning Into a Social Process: I am continually impressed with the bright, creative, and talented traders I meet through the blog and across trading firms in my coaching. There are many, many people we can learn from and many who can benefit from interaction with us. Social media has made interactive learning more readily available than ever. By observing what others do well, we can create models for our future development.

We can become better traders by becoming more creative traders, more able to spot opportunities. Many problems of trading psychology occur when our rate of change is slower than that of markets. The answer isn't simply to control our emotions; it's to expand the scope and flexibility of our thinking. "

If you haven't added his blog on your daily readings, you're missing quite a good opportunity to improve not only as a trader but also being a better person.

Here is the source: Becoming a Better Trader by Becoming a Better Thinker

Best Regards,
Daytrader21
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