Brett Steenbarger of the Trader Feed blog consistently offers some of the best insights into the link between psychology and trading behavior. With the goal of helping traders reach their goals, Brett has kindly posted the 10 Core Ideas of Trading Psychology. Below are the top three ideas:

1) We are most likely to behave in inhibited or impulsive ways, violating trading rules and plans, when we perceive events to be threatening;

2) What we perceive to be threatening is a joint function of events themselves and how we think about those events;

3) A key to gaining control over trading and maintaining consistency is to be able to reduce the threat associated with market events and process adverse outcomes in normal, routine ways;

As Brett points out in Ideas #4-10, it is not just that traders need to keep a careful eye on their psychological and emotional reactions to market events - they must also set specific, measurable goals and commit to a system of feedback and correction in order to meet those goals.

[image: Dr. Melfi and Tony Soprano via Daylife]