Brett Steenbarger: A Psychotherapist for Traders

Not being swayed by FOMO or FUD, or viewing trading as a mere pastime, doesn't spare one from the intrinsic anxieties of market dynamics. This is a sentiment echoed by Brett Steenbarger, a leading U.S. psychotherapist, as he identifies and addresses the deep-seated issues of the crypto community.

For clarity, Steenbarger's exploration of trading psychology predates the rise of Bitcoin. His initial book, "Psychology of Trading," was launched in 2003, followed by "Enhancing Trader Performance" in 2006. Both emerged from his close observation of stock market players. Yet, his influence grew when he started trading himself, serving as an informal pillar of support for peers facing psychological challenges. He now boasts two decades of hands-on trading experience.

With the surge of crypto's unpredictability, Steenbarger's expertise became even more sought after. Appointments for personal consultations with him are a hot commodity, often booked months ahead. 

He has evolved into a pivotal coach for portfolio managers and traders in the digital realm, authoring two more insightful books in the process: "Trading Psychology 2.0" (2015) and "Radical Renewal" (2019).

Steenbarger views his role as that of a psychotherapist for the psychologically sound. Rather than curing, he emphasizes understanding, given trading's reflection of life's broader emotional spectrum. The feelings stirred by market graphs, he suggests, are akin to those experienced when looking at a loved one: passion, emotional volatility, and a yearning for control. Yet, control remains elusive, often leading to emotional breakdowns and discontent. And, as commonly understood, love's complexities are rarely cured.

His profound insights? They're rooted in personal experience. To decode the psychological nuances specific to scalpers, he immersed himself in high-frequency trading, relentlessly tracking minute price shifts. This intense engagement, laden with emotional tumult, led him to extend a unique therapeutic discount to traders of this particular ilk.

It's unlikely that an average trader would take the time to dive deep into Brett Steenbarger's fundamental works on trading psychology. However, if you're skeptical about the idea that "Trading mirrors life," then you might want to read "The Psychology of Trading: Tools and Techniques for Minding the Markets" or "The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist."

Here’s what you'll learn:

Rule One: Start each trade with a clear understanding of what you're willing to lose. If the loss exceeds your expectations, it can cloud your judgment, leading to unpredictable actions.

Rule Two: Starting with very large trades can result in emotional volatility. Strive for restraint and consistency. Increase your trade sizes gradually, once you've built a stable foundation for your capital.

Rule Three: Don't aim to be profitable all the time; it's unrealistic. Constantly trying to please everyone is emotionally draining and can lead to burnouts.

Rule Four: The challenge with losses isn't just the financial aspect, but also how it impacts your self-confidence. Doubts and insecurities from losses can consume you to the point where you miss other essential opportunities for self-growth. View setbacks as valuable experiences. This perspective also applies to intimate relationships.

Rule Five: Don't make decisions on a continuous loop. You won’t lose opportunities by occasionally taking a step back to observe. It's essential to pause both in life and trading, giving yourself time to think.

Rule Six: If maintaining discipline is a struggle for you, perhaps you're not in the right field. A passionate artist doesn’t need to be disciplined to maintain interest in their art. It’s love and dedication that naturally bring about discipline.

Rule Seven: Treat every trade with the same seriousness as a surgeon approaching surgery. If you feel overly distracted or demotivated, consider ending your trading for the day. The same goes for intimacy: it's not enjoyable if your mind and emotions are elsewhere.