How to use conditioning to improve your trading (Part2) | stockbee

1/25/2011

How to use conditioning to improve your trading (Part2)

Using Conditioning to improve your trading daily

Thought conditioning is a tool used to condition your behavior. Thought conditioning works by changing your thinking. To do successful though conditioning you need to constantly remind yourself of the thoughts that need conditioning.
Thought conditioning works by changing thinking sequences. Techniques like checklist, constant reminders, visualization, simulation are used to condition your thinking. In workplaces though conditioning is used to reinforce certain behavior. Good example of thought conditioning is in hospitals and restaurants where a constant reminder of "Wash your hand" is used to condition employs. Similarly in aviation sector constant thought conditioning is done about SA, accident avoidance, safety, suspicious behavior etc.
There are many ways to do thought conditioning and as usual advertising industry is at forefront of using thought conditioning to change your behavior. And we will look at some of the techniques used for thought conditioning and how they can be incorporated in to your trading.
Right mind frame is critical to your trading success. A right mind frame allows you to identify market opportunities quickly. It allows you to make quick decisions. It allows you to avoid big losses and respond to market changes quickly. If you want a quantum leap in your trading, you need to condition your mind to be in trading mode. To do this successfully you need to develop a method to constantly keep your conditioning aligned to the market opportunities. When the mind and market is aligned you will be in winning streak. When the alignment breaks down you will have frustration and losses.
One of the ways I use thought conditioning is by using series of checklist every day. These are tools for conditioning the mind to think of issues before open.

Are you bullish, bearish or neutral on the market?
What is your plan if your view is bullish on overall market?
What is your plan if your view is bearish on the overall market?
What "method" is driving your bullishness or bearishness
Is it logical or based on questionable premise or second hand information.
What is your pre market trading plan
What data sources you must monitor in the morning for that
If you identify a good opportunity in pre market how will you enter it
Have you thought of where you would put stop, how much you will risk on them
What will you do if after entry it does not act as expected
What is your plan for managing :"each" of your position
What is driving that decision
If I am going to use EP in the morning everyday am I organised for it
Is there a set routine for it
Is my broker/software set up for it
Do I really understand what is involved in trading EP
If I am going to use STIB everyday am I organised for it.
Is there a set routine for it
Is my broker/software set up for it
Do I really understand what is involved in trading it.
Like this I have series of conditioning prompts and scripts . There are conditioning paragraphs that I have developed for myself based on issues faced in trading. 
Another example of thought conditioning is about keeping drawdowns small. I shared an example of that on members site:

Thought Conditioning: Drawdowns

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Every day think of this table.
What can you do to keep your drawdowns below 5%.
What stops you from cutting losses quickly?
Why is this table important?
Why should you look at this table 10 times in a day?
How can you develop a conditioning script to constantly remind you of this.
Advertisers constantly use thought conditioning questions or prompts to help you act on their message.
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You are constantly bombarded with a conditioning message:
Ask your doctor about ED today.....
and as result billions of men go to their doctor and ask for the blue pill.
That is thought conditioning at work....

There are many ways to use though conditioning to align your behavior with your trading goals and I will be covering more of this topic in later posts. 

Related post:

How to use conditioning to improve your trading (Part1)

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