I had an interesting chat with a trader today. He has what it takes to make it, he’s just a bit stuck. From where I sit – it seems that if he could just iron out his “off plan” game, he’d be profitable.
Partly – this is exactly what you’d expect it to be. He does not overtrade – he’s got the discipline to wait. He just goes off plan sometimes. This is normal. Pretty much every trader has this to work through.
In our chat today, an interesting thing came up that I hadn’t noticed in our earlier chats. He mentioned getting into a state at the end of a losing day where he wanted to give up. He was beating himself up after performing badly. Now – every approach will have losing days, that’s a given. Not only that – seasoned traders will ABSOLUTELY have highs and lows. Mostly when results are exceptional. None of us are robots. But to be in an emotional and negative state of mind because of something that is inevitable – this is where things get tricky. When we repeatedly experience that same frustration after a losing day, it creates a feedback loop. The more you beat yourself up, the more you internalize those losses as personal failures rather than part of the game. Over time, this can lead to diminished confidence, reluctance to take necessary risks, and ultimately, a decline in performance.
The Hidden Costs of Self-CriticismWhat many traders don’t realize is that this constant cycle of self-blame can affect not just your trading but your overall mindset. Every losing trade becomes an emotional event, not just a financial one. And while it might feel productive to analyze every mistake, there’s a fine line between healthy reflection and damaging self-criticism. Eventually, this mindset seeps into the rest of your life, increasing stress and even leading to burnout.
This is where it becomes essential to look at what’s happening on a deeper level. The problem isn’t the losses themselves—it’s how we react to them. If you find yourself stuck in this cycle, it’s time to explore strategies that can help you break free.
NLP and CBT: Rewiring Your MindsetEnter Neuro-Linguistic Programming (NLP) and Cognitive Behavioral Therapy (CBT), two powerful tools that can help traders manage their emotional reactions and develop healthier ways of thinking.
NLP is a method that helps you reprogram your mental patterns. When a trader goes off plan or suffers a loss, NLP techniques can help them shift their perspective. Instead of focusing on the pain of the loss, you can learn to refocus on what went right or what can be improved next time. NLP techniques like anchoring, where you associate a positive emotional state with certain actions or thoughts, can be especially helpful in these situations.
I’m no expert in NLP – but I have been on NLP courses and they did make a huge difference. There was one pivotal exercise. I was asked to sit in a chair, opposite an empty chair. I was me, the other chair was money. I was asked to talk to money. Then I switched chairs. Now I was money, talking to me. I am not ashamed to say that the realization of my own mental blocks in that moment, was earth-shattering and I cried like a baby. I was programmed that money could only be earned through hard work. Not intentionally programmed, but it was still there. I was uncomfortable making money if it did not come with an increase in workload. The more I made, the worse I felt and without knowing – I self-sabotaged.
Look – I’m no expert – but to me – this stuff is real. This is not a recommendation, more of an anecdote.
CBT is another approach, focused on identifying and challenging those negative thought patterns that can spiral out of control after a losing trade. For example, after a bad day, a trader might think, “I’m a failure” or “I’ll never get this right.” CBT encourages you to challenge these thoughts—are they really true, or are they just emotional reactions? By recognizing irrational beliefs and reframing them into more balanced and constructive thoughts, traders can build resilience against the inevitable ups and downs. I don’t have experience with this – but I do know people that have.
And you know what – ask around – maybe people you know have had positive experiences with a local practitioner.
Long-Term Solutions for TradersThe beauty of these techniques is that they don’t just apply to trading—they help retrain your overall mindset. If you find yourself beating yourself up after every loss, here are a few steps you can take right now:
Recognize the Pattern: The first step is awareness. Notice when you’re starting to spiral into negative thoughts.
Reframe Your Losses: Instead of seeing them as failures, view losses as part of the learning process. Every losing trade contains valuable lessons if you look closely enough.
Use Positive Anchors: NLP can help you associate calmness and focus with certain triggers—like deep breathing or a specific phrase you tell yourself before trading.
Challenge Negative Thoughts: When a thought like “I’m no good at this” creeps in, ask yourself if it’s really true. Replace it with something more balanced like, “Today was tough, but tomorrow is a new opportunity.”
If you’re curious to learn more about how NLP and CBT can transform your trading mindset, check out these helpful resources:
NLP Resources:NLP Comprehensive’s Free Articles: https://nlpco.com/category/beginning-nlp-articles/NLP University’s Library: http://www.nlpu.com/Articles.htmCBT Resources:GetSelfHelp UK: https://www.getselfhelp.co.ukPsychology Tools – Free CBT Worksheets: https://www.psychologytools.com/professional/free/
Brett Stennbarger:
– part 1: https://traderfeed.blogspot.com/2018/05/cognitive-behavioral-techniques-for.html
– part 2: https://traderfeed.blogspot.com/2018/05/cognitive-behavioral-techniques-for_14.html
– part 3: https://traderfeed.blogspot.com/2018/05/cognitive-behavioral-techniques-for_16.html
Books:
The Chimp Paradox: Although this book it not trading related, it explores the mind’s inner workings using a model that distinguishes between two parts: the “Chimp” and the “Human.
https://chimpmanagement.com/books-by-professor-steve-peters/the-chimp-paradox/
By embracing tools like these, you can start to control the emotional rollercoaster that often accompanies trading and get back to what really matters—executing your strategy with clarity and focus.
