Finding Solutions - Finding Solutions: How Traders Can...

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Finding Solutions: How Traders Can Become Their Own Therapists Brett N. Steenbarger, Ph.D. Note: This is a draft of an article that appeared in the January, 2003 issue of Stock, Futures, Options (SFO) Magazine. The original article can be accessed at . In recent years, brief therapies have demonstrated their effectiveness for dealing with a number of normal life challenges. Unlike traditional psychotherapies, which may take months or even years to show results, these short-term techniques often help people change persistent problem patterns in as few as several sessions. Even more interestingly, these therapies can be learned by the motivated layperson, allowing individuals to become their own therapists. This is particularly useful for traders of futures and options, for whom time is the essence. In the October, 2002 issue of SFO Magazine, I presented a brief, intensive method for overcoming anxiety and impulsive behavior patterns known as exposure-based therapy. In this article, we will turn the tables and explore a set of methods used to cultivate positive trading behaviors. Known as solution-focused therapy, it is one of the briefest and most powerful of the “therapies for the mentally well”.
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How Problems Are Constructed A cornerstone of the solution-focused method is the idea that problems are constructed by the human mind: they represent ways in which we view ourselves. An example might help illustrate this somewhat unusual idea: John is a trader of S&P e-mini futures contracts. He has had several losing days in a row and on two occasions failed to honor his stops, wiping out several weeks of profit. The night before his last busted trade his sleep had been fitful, and he attributed his lapse in discipline that next day to fatigue. The next evening he vowed to get good sleep, but found himself mulling over the day’s poor trading. As a result, he could not fall asleep and woke up even more fatigued than the previous morning. Fortified by coffee, he vowed not to make the same errors, but now found himself hesitant in taking his normal trades. Cursing his “sleep problem”, he decided he would take an over-the- counter sleeping aid and go to bed early that night. When he still found himself replaying the day’s missed opportunities in his head, however, he started to worry that he would never recover his sleep. Frantically, the next day he called his doctor and asked for help with his insomnia. The problem, from a solution-focused vantage point, is not simply that John cannot sleep. Rather, he has drawn a conclusion in his mind that he is an insomniac; that he has a sleep problem. This construction of a problem-based identity helps to maintain many negative patterns of thinking, feeling, and acting. Once people label themselves as “bad traders”, “insomniacs”, or “depressed”, they tend to react more to the label than to their initial difficulties. John begins with a normal sleep disruption that, sadly, contributes to a lapse in his trading discipline. Instead, however, of viewing his problem
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This note was uploaded on 10/21/2010 for the course BUSINESS 19450 taught by Professor Goldberg during the Fall '10 term at Saddleback.

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Finding Solutions - Finding Solutions: How Traders Can...

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