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How To Dupe Yourself Into Creating Better Trading Habits

Updated: Nov 14, 2022

by Aaron Rentfrew


“Why the f*ck do I keep ______ when I know it’s a terrible trading habit?”


I get this a lot.


There’s nothing more frustrating than knowing your decision making is whacked and continuing to do it…over and over and over again. Despite desperately wanting to change - you find yourself stuck in a loop of repetitive mistakes that you’re unable to think your way out of.


This loop leads to self-doubt and limiting beliefs:


“I’m never going to make it.”

“Everyone else is crushing it; why is this so hard for me?”

“Maybe my Dad’s right, and I need to go back to my soul-sucking job.”

“If I do this again, I might just give up; there’s something wrong with me.”


I’m speaking of poor decision issues, such as overtrading, revenge trading, chasing moves

(FOMO), fading trends, anger trading, not trading your plan, etc. There are many more, but you

get the idea.


Like some of you, I’ve suffered from many of them too, both in trading and in life. I took my first trades in 1999 and came back to the markets off and on for many years. My worst mental break in trading came in 2012-2013. I blew up two accounts thinking we would crash after the

downturn in 2011 and fought the uptrend for over a year. I made every mistake in the book on

repeat until I had nothing left.


The odd part about it is that I got sober in 2009, so I had a lot of experience breaking bad habits and working with others on how to change. But, I never really considered applying those principles to my trading mistakes; it seemed like I should be able to change my decision making by simply “wanting to change.” But, that’s not the case.


I’m not saying you’re addicted to f*cking up, but it’s kind of like that.


The brain works on a rewards system. It’s an evolutionary process that guides us, conserves

energy, and assists in survival. When we were hunter-gatherers for a million years, this served

us well; this food gives me calories = good, that saber-toothed tiger ate Grok = bad, orgasm

helps reproduce = good.


All of this leads us toward pleasure and away from pain, a simple psychological concept known as “The Pleasure Principle.”


But, in our increasingly complex world and often conflicting signals, we can quickly get our

wires crossed as to what is healthy behavior and what is destructive. And in trading, this can be the difference between millions of dollars and complete and utter devastation.


“Just tell me how to stop f*cking up, Aaron.”


Ok, ok.


What we need to do is bring on the “felt experience” of trading your plan/executing the proper habit and have it be more positively impactful than the “felt experience” of whatever the bad habit is.


“WTF does that mean….?”


There is something about your bad recurring habit that is attracting you; it’s like an addiction.

Perhaps there was that one time you fought a trend, and you caught the bottom and got a

massive rush of dopamine and adrenaline, a big ego boost, and the feeling was incredible. Or,

you envision all the money you’ll make chasing this uptrend, you can literally FEEL it playing out in your favor, and you don’t want to miss that feeling. Maybe, you just need to be right and that future feeling of having that come true is an overwhelming reason to hold a loser into the

ground.


This is what I mean by “felt experience,” it’s your future projection of what it will feel like if you

do whatever shit behavior you’re about to do.


You’re currently wired to feel that executing that poor behavior is the goal because it will feel

amazing if it works out. Maybe it’s greed because you think you’ll make millions; perhaps it’s so you can tell your dad you finally made it. The reasons are individual, but if you dig a little, you can find it. (you can’t think your way out of that)


You have to flip the script and begin to reprogram your mind.


2-part strategy to habituating healthy habits around our decisions:


A) Diminish the current reward system perception that (insert the goal of the bad habit)

is the goal (for example: focus on how FOMO’ing into trades makes for a constant feeling

of failure, or that they bring down the win rate, get you trapped)


B) increase the reward system perception of what it would feel like to _____(insert good

habit) and trade to your full potential. You need to increase the perceived value of this

and how good that would feel. (for example: focus on how patience in execution and

getting in at an advantageous price would feel, how good would it feel to be fully in

charge of your performance)


With all habits, it’s like this, think about an addict that’s struggling to quit. You can’t tell

him to “just stop” - the drug activates the rewards systems very powerfully. When an

addict finally stops, they see the diminishing returns due to their behavior, and the

reward, on the other side after quitting, has a “felt experience” more significant than the

effect of the drug. Same is true of being addicted to unhealthy foods, there’s a strong

rewards system attachment to high calorie sugar rich foods. Your cave dweller brain still

views this as important for survival and we get a big fat dopamine hit when we smash

some cake. To change we have to look at the deterioration of health/weight gain - and

contrast it with the what it might feel like to be healthy, fit, and full of energy – and we

have to remind ourselves constantly until it’s habituated. But, once habituated, you’re

unstoppable. Ok, back to trading.


“That all sounds good, but how do I do this today?”


I’m going to make it stupid simple because that’s how I need it also. The first thing you

need to do is be more mindful of how you feel when making these mistakes. Please

write it down, document how it makes you feel.


Next, I would ask you to start doing some visualization practices. For traders, I like to

run the visualization of a chart, envisioning the ups and downs of the two different paths

good habits vs. bad habits.


We must attach feelings to these mistakes (which I’ve labeled for this example but use

your own if they don’t match):



This is where we can begin to diminish the deeply held reason we continue to repeat

poor behaviors and increase the positive future felt experience of performing the proper

behaviors.


Sounds hokey, I know. But, there is a ton of neuroscience backing this up, and it has

proven very effective for me and all of my clients, so I’m confident that it’ll work better

than simply “wanting to change,” which is what most people do.


IN PRACTICE: (don’t set timers, go as long and as detailed as you can in the

visualizations)

  1. Sit down in a quiet, comfortable spot where you won’t be disturbed for a while.

  2. Take deep breaths into your belly, allowing the diaphragm to push down and fully expand into the gut.

  3. From the top of your head to the bottom of your toes, I want you to slowly move your attention downward, with each breath allowing muscles to relax, releasing the muscles behind the eyes and in the scalp (you can probably feel them straining right now).

  4. After 5 minutes or so, begin to visualize the charts below (or build your own, which is better as it makes them easier to memorize).

  5. Start to run through the downtrend and how these mistakes make you feel, mindful that they rarely lead to positive feelings. The more honest you can make the feelings, the better. We’re trying to imprint the emotion without having to make a ton of shitty trades and lose a bunch of money.

  6. After 5-7 minutes, turn your attention to the uptrend, think about how great these attributes would feel, literally FEEL them, consider how proud you and others would be.

  7. When you feel like you’ve concluded the visualization, start from 12 and slowly count backward to 1. With each exhale releasing some of the negative feelings from the poor decisions, each inhale breathing in good feelings from the positive habits.

  8. Slowly allow your eyes to open. There’s no rush.

  9. Be mindful of the first few thoughts that enter the mind. Please take note of them.

  10. Repeat as often as you see fit but a minimum once a week (I do visualizations daily for a range of things).


One thing that bears repeating, make the visualization as real as possible, really allow yourself

to feel the range of emotions. Fill in the details of the situation, the scene, the situation, the

aftermath, etc.


Trading is hard enough without the mental warfare that goes on between your ears. You must

find ways to beat your weaknesses without crushing your P/L and going broke. This simple visualization can be built on, adding layers to attack many things in trading and life. Get creative and make it your own.


You can be successful at this, and you can change your behaviors over time. Mastery in any field takes time, attention, and resilience. It’s vital to understand that growth is a process and that you can make it as long as you stay in the game and continue to grow and develop your

knowledge and skills - but most importantly – your understanding of yourself.


Be kind to yourself. Every trader I work with is fighting a battle they feel no one else

understands. You’re certainly not alone in this despite the plethora of folks on FinTwit that

attempt to appear perfect and never seem to make mistakes. (they all do)


I hope this helps, and feel free to reach out anytime if you’re struggling.




Aaron is the creator of Mind Unbound – Master the Trading Mindset Course


You can check him out on Twitter: @livingrightco



To chat about private coaching, you can book a call here (serious inquiries only):



8 Comments


Great read it hit me hard as if you were talking to me personally. Ill start working on these.

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Aaron Rentfrew
Aaron Rentfrew
Dec 06, 2021
Replying to

Happy to hear that Elias, give it some time and continue to work on it. Results take time but it's worth the prize!

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"One thing that bears.." Now here I was all relaxed and contemplative after those ten steps and then you had to go and get me wound up by bring up bears...


P.S. Good job!

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Just listened to the Bootsie interview and read this new blog instead of overtrading into the holiday. I can't get over how great this website and content is. I'm truly thankful.

Like
Horse
Horse
Nov 25, 2021
Replying to

Thanks Boog! We're still early, and I appreciate you being an early supporter. I've been very humbled by the number of great traders that have reached out offering to contribute. There's some fun stuff coming!

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Horse
Horse
Nov 24, 2021

Awesome job Aaron! This is great stuff. Really like your writing style too, it flows well. Very conversational. Can't thank you enough for sharing with us!

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Karim Dandashy
Karim Dandashy
Nov 24, 2021

You rock horse! Thank you for this, took a decent L last week and has me in a tough spot at the moment. Will work on this. That said, if I can ask, how do you feel about intraday low volume nodes?

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Horse
Horse
Nov 24, 2021
Replying to

All LVNs are decision points for the market, in my opinion. That's typically where the battle takes place.

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