In this episode of Truth About FX, Walter gives two key points on how you can improve your trading habits and thus get better results from a psychology point of view. According to him ,it is always useful to get into the habit of writing your own journal. He also talks about how a hypnotherapist can help your subconscious into forming the correct habits.

Hugh talks about how his hypnotherapy session with Jorge has helped him improve his own habits.

Download (Duration: 07:34/ 9.1 MB)

In This Episode:

00:36 – rewarded for the habit

02:06 – kicking myself

03:13 – have a reminder

04:14 – spot of grass

05:08 – find a hypnotherapist

07:03 – get the recording

Tweetables:

Reward yourself [Click To Tweet].

Create a routine  [Click To Tweet].

You need a cue [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. How do I change a bad trading habit?

Walter: Change a bad trading habit, okay. I’ll give you two techniques. I am just going to look at this from a Psychology point of view. The first thing is you are somehow  being rewarded for doing this habit.

This is the behaviorism approach for anyone who has been through Psychology course. What you want to do here is you want to set up — and a really good book which I’ll put a link in the show notes is the Charles Duhigg book. I don’t know if anyone has read that one. The Duhig book about building habits.

I would definitely have a look at the “Power of Habit” by Charles Duhigg but the idea here is this: that you want to reward yourself for basically doing whatever you want to do, not the bad habit.

Let’s say for example that I have a bad habit of closing my trades before they reach the ultimate target, or before the trailing exit kicks them out, or whatever it is. I am just closing my trades too early.

What you can do is you can create a routine that, essentially, you get rewarded just like you know, you’ve heard. We’ve all heard of Pavlov’s dog. You get rewarded for doing the right thing.

Let’s say that I know that I usually take profit really too early. I don’t let my trailing exit get me out of my trade. Instead, I go “Oh, I think it’s going to turn around here and make it out.” And then, of course, sometimes I’m right and the market kind of turns around about that area but sometimes the market is just retracing and even my trailing exit would have been triggered and I would have been, you know, the market would have given me another 50% more profit. I’m kicking myself, right? “Why did I do that?”

What you do is you need a cue. When I take my trade, then I have to write it down in my journal and say, “Okay, why did I buy the Aussie-Yen right here? I bought it because of this…” You write it down in your journal and you say, on the exit, you give yourself a rating.