Barriers to Success Patterns, Part III

This is the final in the series (Part I, Part II). To date we have identified the barriers, and have suggested solutions for the trader who cannot pull the trigger. Today we have a look at solutions at the trader who enters without forming a risk management plan—before or after entry.

I find this type of trader the most challenging. Initially I used to think that the behaviour was caused by:

1. Fear of missing out and/or
2. Fear of leaving money on the table.

I used to think that the above explained the behaviour since I was viewing it from the perspective of the deliberative decision-maker. I believe that in his case, the explanation is true.

But since this behaviour has tended to exhibit itself mostly in the impulsive-decision maker, I have had to re-think the cause. (Since the impulsive decision-maker is already in the trade, he ought to have no reason to fear missing out).

To date I have failed to isolate it. What I have been able to do is have a measure of success in getting the traders to implement a risk-management process by:

1. Work through the Vision-Goals process to ensure the trader is passionately committed to his trading success.
2. Re-define success to mean: consistently implementing the trading strategy and risk management plan. To do this we adopt an 8-minute visualization process.
3. Adopt a pre-entry or post-entry risk management process.
4. Adopt an immediate feedback entry of (3) in the psychological journal. Note how much better is the Expectancy Return when the trader does this. Create an image of this improvement and use it in the 8-minute process.
5. Adopt a reward process for adhering to 2 to 4.

Neurology has found it is difficult to overcome ‘bad habits' . It is much easier to create new behaviour especially when using the subconscious as an aid. The above does this.