Case Study II :How to Improve Trading Behavior

We are going to Discuss a Case Study (Previous one can be read here) of one of My Student How we were able to help him to get rid of a bad Trading habit as part of Psychological and Performance Coaching, Many of readers would also be facing the same trading problems can learn from the below case study and apply in there own trading.

Raj had been trading Nifty futures based on Gann Strategy for the past 5 years.  He was profitable, but often found he always exited the trade every early. He was never able to ride the trade and in most of the trades used the exit before his final target was achieved.

So I asked Him What are the reasons he is not able to ride the trade.Below are his answers.

  • Few Trade he tried riding and they went in Loss
  • Unable to carry overnight position due to fear of market going against me due to some black swan event
  • High Leverage he was working on

We did a Through Study of His Trades to recognize his trading behavior and what all needs to be changed to get rid of his Trading Problem and Proposed the Below Solution. Part of your plan for change is to know what will pose the greatest difficulty for you in carrying out your plan. We made him to think and Write his short and long term Goals and made a Framework which can be used to track his progress. We specifically told him it will be a long road ahead as When you confront your own challenging trading situations, be aware that this will be hard work. It is unlikely to come easy. This is to be expected because making changes from emotion‐driven trading actions to values‐driven trading actions is difficult. It took lot of session to keep him motivated and continue on the journey of correcting his behavior.

Raj  challenging situation: Cutting winning traders short
Raj Goals:

Short Term Goal: To reduce this nonconstructive behavior by holding onto trades for at least two additional points above my average on at least 60 percent of my trades over the next two months of trading

My longer‐term goal: Eliminate cutting winners short completely within five months and gradually increase my winning points per trade average

Plan for my initial goal: Practice mindfulness Exercise Learnt during training prior to trading.  After entering a trade, set my stop. Move it up
to breakeven when appropriate. Exit only after I have achieved two
points above my average or the trade gets stopped out

.
What will present the greatest challenge for me:
My fears that I will give back profit earned or suffer a loss. Tension in
my stomach, strong emotion, and negative thoughts.

How I will meet that challenge:
I will remind myself that the stress I feel is helping me meet the challenge
of interacting with the market and even though it feels bad, it’s
worse when the market continues to go in my direction and I’ve cut
the trade. I will strive to see my thoughts and feelings as temporary
and only an indication of my fears, not what is actually happening in
the market. I will also strive to put more attention on the market and
my trade and less on my thoughts and feelings, though I will also let
them occur without fighting them or running from them by closing
my trade until I reached my goal.

Overcoming difficult trading challenges takes time and effort. Developing a plan that incorporates our values along with mindfulness other techniques is an effective way to achieve our trading goals.

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