Trading

TRADING PSYCHOLOGY

Trading InThe Moment

You don’t have choices regarding the past, but you do havechoices regarding your future. Here are some ideas abouthow you can change your perception of the future.

by Adrienne Laris Toghraie

hen a trader lets his imaginationtake hold instead of concentratingon what the market is actually do-ing, it can affect his trading deci-sions. Trading in the moment, with-out wishful wishing about wherethe markets may go or negativethinking, is the only way a tradercan get the support that he needs to

follow his own rules. You may be familiar with these mindsets,mindsets that assume an outcome because of some un-founded assumption or belief:

THE CASSANDRA SYNDROMEIn the movie Mighty Aphrodite, a Greek chorus watches andspeculates about the outcome of a modern man’s brush withFate. The seer Cassandra is full of fears for the future of themain character, creating all sorts of tragic stories that couldoccur to him. As these stories are mirrored in his own fears,we see that he is a modern-day Cassandra, consumed withdramatic and tragic foreboding. Having the benefit of dis-tance, we see the humor; but the character cannot because heis caught in the moment with his own limited viewpoint andhis own tendency toward gloomy predictions.

Many traders are Cassandras as they talk to themselvesabout what could happen based on past losses or futureexpectations. Are you a trader caught in this trap?

Anthony grew up in a disadvantaged neighborhood in alarge city, where the vulnerable were under constant assaultby the petty criminals who lived nearby. His family, whichwas long accustomed to tragedy and victimization, wouldalways assume the worst. If Anthony was late coming homefrom a date, his mother assumed he had been kidnapped,murdered, robbed or in an accident. It would never occur toher that he was late because he had been having a good time.This belief in the worst possible outcome was part of an

unwritten rule in Anthony’s world. This form of thinking andspeaking became an integral part of Anthony’s world view.

When Anthony became a trader, he brought this pattern ofnegative thinking to his trading. This attitude resulted indampening his energy and passion for trading. Even moreserious was the fact that it prevented Anthony from followinghis trading system. Even though the signals from his systemdictated that he should stay in the trade, Anthony would exittoo soon because all he could think about were the losses thathe was sure would occur if he would to remain in the trade.These negative thoughts prevented him from trading withconsistent stability.

In our private consultations, I pointed this problem out toAnthony and started on a course of action for him to get overit. What I did not anticipate was that this negative attituderepresented all the things that meant home, family andfamiliarity to him. Anthony wanted to hold onto the essenceof these things. Giving up this form of story-telling was notacceptable to him on an unconscious level. He was trapped inthe Cassandra syndrome.

WEIGHING THE PAYOFFSAs easy as it is to transform a negative behavior from the past,it is just as easy to reverse the change if the negative payoffis more important to the trader than the benefits of the change.What made Anthony so reluctant to let go? His father had diedwhen he was young, leaving his mother to raise him. By sheerdetermination, she managed to support the two of them andeven send him to college. Anthony promised her that hewould buy her a home and take care of her. Unfortunately, shedied before he was able to do so.

When Anthony and I began to work together, I realized thathis connection with his mother was more important to himthan being a good trader. So while neurolinguistic program-ming works for many people in the first session, in order forit to work for Anthony, the followup was extremely impor-tant. He needed to change some of his associations in order tosupport a new habit of thinking positively in the moment.

ALL IN THE FRAMINGI know a gifted picture framer who frames art pieces for majorsuppliers and buyers from all over the world. She can take amediocre piece of art and it can look like a masterpiece whenshe is done with it. Conversely, she has shown me great worksthat were so badly framed that they appeared not to be wortha second look. The trick, she told me, is in how you see thework and what you choose to emphasize in your choice offrames and mats.

Photographers use a similar technique. In the darkroom,they can perform their own version of reframing reality. Ifthey are working from a large negative, they can select onlythe most interesting part of the shot and print that. Thefinished photograph will be a beautiful scene taken from alarger scene with less to recommend it. The trick is to reframeyour view of the scene in front of you.

Just as Cassandras such as Anthony focus only on the

• Everything comes in threes. This has to be a good tradebecause two good things happened today.

• I’d better get out before the big boys hit my stop.• I’m always in the opposite direction of the right move.

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Stocks & Commodities V15:4 (187-189): Trading in the Moment by Adrienne Laris Toghraie

Copyright (c) Technical Analysis Inc.

negative shots, there are traders who reframe their point ofview to focus on the positive ones. Brad grew up in a homewhere his grandfather was one of his caretakers. Granddadloved to tell stories about his past and Brad loved to listen tothem. Granddad’s stories consisted of highly exaggeratedspecial moments that stirred up happy emotions in Brad.These stories, which were so infectious that the whole familywould laugh, became part of the family’s verbal history.When Granddad would talk about an upcoming event, hewould create anticipation in such a way that it would be evenmore incredible when he talked about it after it was past.

With this experience in reframing, Brad entered trading

with the idea that everything would not only be okay buteverything would be exceptional. And that was the way it wasfor him. He chose to make the right decisions. In his mind,there was just no possibility that it could be otherwise.

While others came to my seminar to overcome sabotage orprotect themselves from the sabotage traps in trading, Bradcame to my seminar to learn about the psychology of trading.As the most positive thinker I have ever met, Brad brought thelevel of the seminar to a different dimension. And as a resultof this, I relearned a major lesson: While we talk about thethings that can go wrong in trading, it is actually moreimportant to direct our thinking to what can go right.

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Anthony’s life, the memory of his mother. Anthony had torecall that she did not want him to support her in luxury; shewanted nothing more than to see him happy. She wanted himto be confident in what he did and to expand his horizons farbeyond those of her own life. Fulfilling her dreams was oneway he could repay his mother for all of the hardships sheexperienced in order to raise him. Once Anthony had con-nected his new, positive thinking to the fulfillment of hismother’s dreams, there were fewer payoffs left in the old wayof thinking, and Anthony could move forward.

Like Anthony, the best way to stop the Cassandra stories isto connect your new thinking to something that is moreimportant to you than the payoffs you get from your oldnegative thinking. Here are some steps to help you reframeyour thinking:

1 Recognize the nature of all the stories you are tellingyourself and be willing to give up the perception ofthose stories.

2 Surround yourself with people who speak in a positivemanner and avoid those who are stuck in their ownCassandra stories.

3 Like the audience watching the movie, watch your ownmovie and that of others in life and find the humor in allthe negative tragic interpretations.

4 Attach the importance of something that you reallywant, like being a good trader, to positive thinking.

5 It is important to realize that while it sounds morebeneficial to be a good trader than a victim, you mustdetermine what the payoff is for the negative thinking.Write down what you think are the payoffs of negativethinking and positive thinking.

CONCLUSIONYou don’t have a choice about the past. However, you dohave choices about your perception of the past and what thefuture holds as well as the present. How you think in themoment will direct your trading results. Your thinking willeither sabotage your trading results or assist you in makingthe right decisions.

Adrienne Laris Toghraie is founder and head of both Tradingon Target and Enriching Life Seminars.

THE ICARUS TRADERSMany people come into trading with the fantasy that they aregoing to be multimillionaires. This is only a pipe dream,however, and not a deeply rooted belief that is central to theirbeing. These traders are like Icarus, who challenged the gods

S&C

You don’t have a choice about thepast. However, you do have choicesabout your perception of the pastand what the future holds as well asthe present.

by attempting to fly to the sun, only to realize too late that hiswings, which were put together with wax, would melt in theescalating heat as he rose in the sky. Inherent in this story forme is the suspicion that if the wings had been an integral partof Icarus and not an artificial, vulnerable attachment, the godswould have felt more inclined to forgive his arrogance and lethim succeed.

The same principle holds in trading. Beliefs in greatheights of success, beliefs that do not arise from a strongpsychological foundation, will harm you in the end.

Not only must a trader trade with a positive attitude towardthe outcome, the positive story must have a basis in thetrader’s inner strength, or he, like Icarus, will overreach hisactual grasp. This inner strength can come from many differ-ent sources — a certain knowledge of the rightness of theoutcome, a total commitment to the outcome, the knowledgethat the trader has done everything to prepare for a positiveoutcome, the repeated experience of having achieved posi-tive outcomes, and the belief that not only does he deserve tosucceed, but that success is inevitable.

REFRAMING THE STORIESWhile Brad’s mindset is unique, it is the norm among traderswho are successful; most traders lose because they haveAnthony’s mindset instead. To help Anthony overcome hisattachment to his Cassandra stories, we attached importanceto the new, positive way of thinking. And the best way to dothat was to link the new pattern to the most important thing in



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