Self-Awareness in Trading

By | August 20, 2020 4:22 pm

With 15 years of trying different things and hearing from others I made an important discovery that has shaped me as a trader and a coach.  What I found is that more people will improve using an approach to change that emphasizes expanding self-awareness and emotional intelligence.

The fact is that the majority of our thoughts and actions are on autopilot. This isn’t necessarily a bad thing either. Our habits, routines, impulses, and reactions carry us through our lives so we don’t have to stop and think about it every time we wipe our ass or start a car.

The problem is when we’re on autopilot for so long that we forget we’re on autopilot. Because when we’re not even aware of our own habits, routines, impulses, and reactions, then we no longer control them; they control us. Whereas a person with self-awareness is able to exercise a little meta-cognition and say, “Hmm… every time I see a Loss in Trading I do revenge trading. That might not be a coincidence,”

Very briefly, what I mean by expanded self-awareness is:

1) The recognition that our thinking and our emotions are intertwined and both influence our perception and judgment that leads to our decisions and actions (this view also happens to be consistent what the leading brain scientists are now saying)

2) Much of our motivation – the intertwined thinking/emotion that drives our behavior – is actually subconscious, e.g. we assume we are trading the market but on other levels we are also trading our P&L and our feelings about our P&L  (and what our P&L represents to us) is just one example.

3) When we understand (self-awareness) the underlying/subconscious motivation for our behavior we are in a better position to choose an alternative.

The key is that we need to be aware of our distractions.


  • Mindfulness is simply the practice of observing what is going on in your mind, body, and environment with focus, clarity, and, importantly, acceptance of what is happening.

    You must focus with some degree of concentration on what you are thinking and feeling at a given moment. Then you must clarify those thoughts and feelings: where do they occur in your body, how exactly do they feel—warm/cold, tight/open, exciting/fear-inducing etc.—are they fleeting or enduring, and so on.


    Keep a journal, start a blog, send emails to yourself, scribble in a notebook—however you do it, writing is a lot like meditating with an active brain component added in.

    That’s because writing has a way of forcing you to focus your mind and get clear about exactly what it is you’re thinking and feeling (see a pattern here?).

    As the author Flannery O’Connor said, “I write because I don’t know what I think until I read what I say.”

Obviously, nothing can guarantee change or improvement , but at least an approach that emphasizes expansion of awareness puts the odds in your favor.

And I have to play the probabilities here. Because more people tend to respond to a change process that includes an emphasis on self-awareness, I choose to use this  approach in my own trading and in my coaching….it simply has the highest probability of actually helping.

One thought on “Self-Awareness in Trading

Leave a Reply