I think the most important one (for me, anyway) is the last one on the list -- It's more important to be right than to make money. Making money means trading in accordance with my trading plan, using stops and sound money management, taking small losses (or gains) when the market isn't acting as I had anticipated, accepting that not every trade will work out, and knowing that winners will more than cover loosers.
This is actually paraphrased from a Marty Schwartz quote out of Market Wizards (or New Market Wizards -- I forget which one). I personally found his story to be quite inspiring, and his "flaws" very similar to my own.
I seem to always need to be right across a variety of different contexts. It's my upbringing, I'm sure. It's always hard for me to admit to a mistake. So, trading is particularly difficult because, as we all know, we can never bat 1000.
Now, I think it's very useful to list all this stuff; awareness is vital. The next question is: How do we keep it in awareness and how do we deal with it? I'm thinking it might be interesting and useful to talk about coping strategies?
Keeping something we want to change in conscious awareness is important because a lot of our behavior -- especially the not-so-good behaviors -- is done out of awareness. It's not that we're asleep, but we really aren't consciously awake. This is especially true when we are in the middle of a trade and we feel under pressure with lots of anxiety, muscle tension, racing thoughts, etc. I don't know about you, but the more anxious I become, the dumber I get. It's actually a pretty well-established principle of psychology. Performance suffers as anxiety climbs above a certain level (mild anxiety is helpful for motivation and, thus, performance, but too much anxiety negatively affects performance, including clear thinking). So, when under pressure, we tend to quickly loose our bearings.
So, one thing I did to keep this idea in mind while in the throes of trading was to tape it onto my computer monitor in a prominent place (like, right under my main chart -- I can't miss it).
It's a simple solution that can be quite effective. Someone mentioned cognitive dissonance somewhere above. Here's how that works in this instance:
First, I have become very committed to making money and firmly view this as more important than being right. I am very committed because I've lost too much trying to be right about the market. So now, when a trade isn't working out, I am committed to taking a small loss if necessary and exiting the market. I put the quote below my screen to remind me of this commitment.
Now, I'm in a trade and it ain't going very well. It doesn't matter why, it just isn't doing what I had anticipated. My stomach starts to churn, I start having negative thoughts (e.g., I'll never be a good trader), I feel tension all over, more negative thoughts (e.g., My wife is going to be upset that I've had another loosing day, etc).
But then, the market starts going in my direction -- for a bar or two. I start getting hopeful with a change in thought (e.g., Oh, this might work out OK; maybe I was right about this trade after all).
Then, I see the quote. I pause, take a few deep breaths, relax and try to think calmly about this situation. (Here's where cognitive dissonance comes in). I know I should exit immediately because the market clearly hasn't acted right. This is my desire as reflected in the quote -- to make money and not be concerned about being right. But, my behavior to this point has been to sit anxiously and turn to hope -- behavior that is aligned with being right, not with making money. My behavior is inconsistent with my expressed desire (to make money and be unconcerned about being right). This discrepancy causes cognitive dissonance (I know I should exit and not just sit here hoping).
If the desire of making money is strong enough, I'll exit the market and praise myself for acting in accordance with my trading plan. If my wanting to be right is stronger, the cognitive dissonance will dissipate and I'll likely end up with a large loss, beat myself up mentally, promise to be better next time, and start the (vicious) cycle all over again.
It may take a few times, but if you stick with this it will eventually work. The key is to be very, very clear in your desire (in this case) to make money. I would think about this each night after the market closed, sometimes just repeating the quote as if it were a chant. After a while, it was so burned into my consciousness that it really was dissonance not to follow it.
I don't know if this is helpful to others or not, but i would be interested in hearing from people about their coping strategies and methods they have used to create behavior change.
Whit
Working hard now to turn it around.