Psychology

Build processes that reduce cognitive load and maintain discipline under uncertainty.

Routines

• Pre‑market: plan scenarios, levels, risk for the session.
• During: checklist‑driven execution, no social media, fixed review times.
• Post: journaling, metrics, one improvement for tomorrow.

Protocol after losses

Hard stop after daily cap, short walk, review last trades, only resume if composure is restored.

Case Study: Revenge Trading Recovery

Situation: Trader loses 3R in morning session (3 consecutive stops). Daily cap is 3R. Emotion: frustration + desire to "win back".

Wrong Response (Revenge Trading)

• Ignores daily cap, doubles position size
• Takes marginal setup without waiting for quality
• Result: Loses additional 4R → Total −7R for day
• Account damage: $14,000 → $13,020 (7% drawdown)
• Next day: Fear sets in, over‑cautious, misses good setups

Correct Response (Discipline Protocol)

• Step 1: Close platform immediately (automatic alert at 3R loss)
• Step 2: 15‑minute walk outside, no phone
• Step 3: Review last 3 trades objectively — was execution correct?
• Step 4: If yes (bad luck), accept it. If no (mistake), note lesson
• Step 5: Resume only next day, same rules, no "make‑up" mentality
• Result: Losses capped at 3R, account $13,700 (3% drawdown)
• Next day: Fresh mindset, catches 2 good setups → +4R
• Net result: −3R + +4R = +1R over 2 days vs −7R if revenge traded

Emotional State Management

Pre‑Trade Checklist

• Am I calm? (1–10 scale; if < 7, skip)
• Did I sleep 7+ hours?
• Have I eaten? (low blood sugar = poor decisions)
• Is this setup from my plan or FOMO?
• Can I accept a full loss on this trade?

During Trade

• Set alerts for targets/stops; avoid watching screen
• If feeling euphoric (big win), reduce next position size
• If feeling anxious (recent loss), check if fear is justified or emotional

Journal Template (Psychological Section)

• Emotion before entry: Calm / Anxious / Excited / Confident
• Emotion during trade: Same scale + note changes
• Emotion after: Relief / Disappointment / Pride / Regret
• Did emotion affect execution? Yes/No + details
• Action for next time: One specific improvement