- Published on
Trading Psychology
- Authors
- Name
- Rakesh Tembhurne
- @tembhurnerakesh
Core Principles
- Trading gods don't care about your beliefs - Market operates independently of personal convictions
- Animal Brain vs Thinking Brain - 8-million-year-old survival brain overrides logic when money is at risk
- Money = Survival Threat - Primitive brain equates losing capital with death, triggering fight/flight responses
Emotional Control
- Automatic responses bypass thinking - Market movements trigger instant reactions before conscious thought
- Emotions are biological action potentials - Don't push them away; understand them as data
- Emotional regulation through breathing - Diaphragmatic breathing neutralizes fear and anger
Mental Framework
- Separate self from thoughts - Brain is a "community of rival emotional programs" competing for control
- Inner Critic vs Adaptive Voice - Destructive self-doubt vs urgency to prove oneself - both harmful
- Thoughts = electrical impulses - 225 mph normally, slows to 50 mph during self-talk (control opportunity)
Trading Mindset
- Illusion of control - Can't control market outcomes, only the mind you bring to trading
- Focus on performance, not winning - Execute your plan well; winning is just probability
- Euphoria is dangerous - Winning streaks create overconfidence → blown accounts
Probability Thinking
- Embrace losing - Landing on wrong side of probability ≠ personal failure
- Self-compassion after losses - Separate performance from self-worth
- Gender differences - Men: temper testosterone with caution; Women: overcome hesitation with assertiveness
Practical Application
- Overconfidence vs Hesitation - Both stem from "need to be right" - embrace probability instead
- Smart work > Hard work - Systematic approach and psychological understanding > brute force
- Power of process - Well-defined process provides discipline when emotions run high
Ultimate Wisdom
- Release need for certainty - Markets are inherently uncertain; embrace the unknown
- Trading = self-mastery journey - Forces confrontation with deep beliefs and behaviors → personal growth
Quick Action Steps
- Practice breathing exercises before trading
- Create pre-trade checklist
- Set mandatory breaks after wins
- Journal emotional states with trades
- Focus on process metrics, not P&L