Peeling Away Those Bad Trading Habits


onion Recently, I had a coaching session with Alex (a made up name) who was keen to make a personal breakthrough. During our conversation, Alex brought forward an interesting topic – he was curious to find out how he could make permanent changes to his trading habits. As you can imagine, these bad habits were probably causing Alex to make unnecessary trading mistakes and, hence, trading losses, and he knows it. Yet, he is struggling to make those subtle but important changes.

At the end of the conversation, I assured Alex that making changes was possible and it can be easy once we understand how to do it. Long story short, it was during that coaching session that Alex managed to identify a workable methodology that helped him create long term and permanent changes in his trading.

I believe this is a significant topic and traders who are aiming to achieve similar trading success should, and ought to, consider this seriously.

Reading this now, you are interested to change your bad trading habits too, are you not? If you are, make sure to pay attention to today’s article because that is the topic that I am sharing today now – making permanent changes by Peeling Away those Bad Trading Habits.

Understanding Habits

Through a repetition of an idea inserted into our mind, it becomes a habit. A fixed idea is commonly known as a habit pattern.” – Bob Proctor.

Before I drill into the details of how to change a bad trading habit, I believe it is useful to understand the concept of how habits were formed in the first place.

As Bob Proctor puts it nicely, a habit is something that was built through repetition of ideas that were inserted into our mind either consciously or unconsciously.  This applies to daily habits as well as trading habits. And it is as simple as brushing your teeth with your left hand (instead of your right) or having a cup of tea (instead of coffee) after lunch.

As you can see, habitual activities are usually activities that you perform so often that that you probably forgot how it started. Yet, you belief (rightly or wrongly) that they are useful because someone (either your parents or people around you) gave you that idea when you were very young and they continued to repeat that idea for a long time until it became your habit.

Think about it, isn’t that how you teach a kid how to tie their show laces? Or how you would teach them to comb their hair?

Does that sound about right? If yes, then, in order to explain how habits are formed, I am going to use the analogy of an onion to explain this further.

Leafs on Onions

If each new idea presented to you can be represented by an onion Apex (see diagram), then every idea reinforced is represented by the Leaf. And if that’s a good analogy, then your life-long habit can be represented by an entire onion.

Just like an onion, each idea needs to be repeated several times before it becomes a habit. Hence, the more an idea is repeated, the more leaf will grow around the apex, and that’s how layers of onion can grow around its core.

Does this analogy make sense? I hope it does.

Now, imagine your life revolving around multiple ideas – which is true for most because you have different habits in your life and they relate to different aspects of your life too – say one for your career and two for your relationship, and etc. That means, you are very likely to have many onions in your life, probably of different sizes and shapes that are planted in different gardens (assuming each garden represents an aspect of your life).

Because the conscious mind can only manage a handful of information at one time, the chances are, you have many gardens in your backyard already. More often than not, these gardens are there are you are not aware of it consciously until prompted. For example, do you realise that you brush your teeth before you wash your face in the morning? Yet some people would wash their face before they brush their teeth. And many of you would not even think of this habit until you read this now. Right?

Peeling the Onion

In the past, I have mentioned about how easy one can make trading changes. In fact, I described making trading changes just like changing a software code. This idea remains true and effective since many traders, through coaching, have realised that they have different codes to change, and one can only find it with the help of a mentor or coach. However, once you find that code, making changes is pretty easy.

Today I’m offering another idea where you can make changes to your habits too and that may be applied when facing different trading issues (remember that everyone is unique and, hence, there is no one-size-fits-all solution?). Thus, we should remain flexible when approaching various challenges.

Why Peel?

Well, we were given various ideas since we were young. While our loved ones shared those ideas (with you) with their best intentions, some of these ideas may go against important trading principals that we face when trading the financial market.

For example, some traders cannot accept the fact that the market is random. My guess is that their early education revolves around building certainty and learning the fundamental of the market. That alone may have imprinted in them the idea of a bigger driving force behind the market, and that fundamental plays an important role in those drivers.

The chances are, that is absolutely true and that is how value investors make their fortune. However, this may not be applicable for short term traders.

Just to be clear, I’m not hear to defend the various methodologies used in trading. But I always believe that each methodology has its rightful place and, when used appropriately, each can yield substantial profit. However, the idea of having a random market has caused confusion for some traders.

On this occasion, the analogy of peeling layers of unwanted leaf can also be a powerful way of removing those conflicts and, hence, making permanent changes.


Making Permanent Trading ChangeOnce you understand the analogy of peeling the leaf of onions, and why you need to peel them, I believe you are in a good position to find those unwanted leafs. While some of these leafs are important principals in the financial market, some of them are less relevant to you. To some extend, these leafs can also cause our expectations to be wired in the wrong way and, thus, creating conflicting emotions.

I’m really glad that Alex made some dramatic changes during coaching and he is now enroute to trading success.

Do you want to see similar results too? If yes, I would invite you to take some time out to have a think about those onions that may or may not affect you. Where possible, write them out and a piece of paper and have a chat with either your trading buddy or partner.


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