Getting Your Mental Game Together

Carl looked at the chart with interest and some trepidation. He had been here many times before. He was playing the NQ E-mini. The 60-minute chart showed what to him was a strong demand zone and he had placed his limit order to buy just below the top of the zone, and placed his OSO order to put a stop just below the bottom of the bottom of the zone. Subsequently, he was filled as the price action dipped into the demand zone that he had drawn. The trepidation that he felt had now become full-blown anxiety, especially as the price took a turn to the downside and was coming perilously close to his stop. Just then, Carl remembered to squeeze the part of his hand between his thumb and index finger. He was “firing his anchor,” a technique designed to access and activate internal resources. This was an anchor that had been linked to a powerful memory where he had run a touchdown for his high school football team and as a result had won the championship game by one point. This memory always filled him with confidence, well-being and a laser sharp focus and now all he had to do to regain that focus, well-being and confidence was to squeeze his hand. He had learned this process in a special peak performance class that he felt would help his trading … and it did. Before he learned this tool, he would invariably succumb to the discomfort of the anxiety and either move his stop, or take it out altogether. Of course, this kind of behavior usually ended in losses, and once in a while, these losses were devastating to his portfolio, his stomach lining and his self-esteem.

What Carl used was a Neuro-Linguistic-Programming tool that is called anchoring. Neuro-Linguistic-Programming essentially is using the power of your brain (neuro) through special techniques and language (linguistic) to change your behavior from the inside out (programming). NLP was founded in the 1970’s by Richard Bandler and John Grinder at University of California Santa Cruz. Anchoring is the process of linking a special behavior, sight or sound (like squeezing the flesh between your thumb and index finger) to a very positive and powerful experience in your past. By linking a special behavior that you can then “fire” (initiate or engage) at any time, you can bring back the emotional state associated with the original event (memory or experience). The beauty and elegance of the anchoring tool is that once you link it, you don’t need to try to remember the experience; and the state can be accessed and activated in literally seconds. This tool is especially useful when, like Carl, you find yourself with very uncomfortable emotions that if left unchanged, will more than likely cause you to do something that is not in your best interest; for instance, moving stops.


It has been my experience that major losses and extreme draw downs are not due for the most part to a lack of knowledge, but to a lack of effective planning and a lack of follow-through with rules and commitments. How many times have you found yourself doing well, only to sabotage your efforts by chasing trades, prematurely exiting positions, moving stops, putting on more size than is appropriate or any other rule violation? When you are in the throws of a trade, this is when the majority of emotional distractions play havoc on your execution. Emotional distractions are caused by your thoughts. Also, did you know that many of those thoughts are not in your awareness…they are unconscious conversations. An example of an unconscious conversation would be looking at a price move and not having a trade plan, but desperately wanting to chase the trade; underneath the surface, you might be saying to yourself, “I’ve got to get in on this trade, that is money lost,” or, “If I don’t jump in on this trade, I’ll be stupid.” Now, the other thing to know is that limiting beliefs about yourself and your trading motivates out-of-awareness thoughts. Beliefs come from everything you have learned or experienced in your life. They are beliefs about your ability, your intelligence and your worthiness, for instance. Also, many are deeply held core beliefs, and they motivate thoughts, both in and out of your awareness. The unconscious conversations prompt feelings associated with the thoughts; feelings like anxiety, fear, self-doubt, self-loathing, greed and anger, to name a few. Herein lie the distractions that distort your judgment and often have you seduced by illusions that you think you see in the charts. As soon as you feel any of the many uncomfortable emotions, you reach for temporary relief because you are out of your comfort zone. Temporary relief is behavior like those mentioned in the above, such as chasing trades and moving stops. So you see, there are many things going on underneath your mental surface that you must get a handle on and begin to change if you are going to get different results.

Mastering your mental game is what you must be concerned about. Trading is a 100% mental game. You are preparing, analyzing, processing or executing; all of which require mental and emotional tools. Trading without mental and emotional tools is like driving without a steering wheel – you’ll not only lose your way, you will crash and burn without them. There are thousands of traders just like Carl all around the planet. They are caught in a spiral of behaviors that are giving them consistent, unwanted consequences in the form of ongoing losses. And, they don’t know how to end this out-of-control pattern. You can find Neuro-Lingustic Programming information quite easily. The point is that if you are not disciplined and you cannot complete your plan or follow your rules – that is if you have them – then you will not succeed as a trader; so get those tools if you don’t already have them. The good news is that we teach tools, techniques and concepts like anchoring and many others in our Mastering the Mental Game On-line, On-location and Extended Learning Track (XLT) courses. We are committed to helping you find and keep your “A” Game (a requirement for consistently successful traders) in order to begin getting the results that you want … by design; not the results that you’ve been getting by default.

So while you are getting your mental game together, a happy trading from me Woody Johnson.