When traders think about trading psychology, they think about the negative – things like fear, greed and other unwanted emotions that impair trading or limiting beliefs that work against reaching goals. Certainly, trading psychology deals with unconstructive emotions and thoughts. However, there is another side of trading psychology, the positive psychology that can help traders develop the mental skills needed for trading. This is what I call High Value Actions.
High Values Actions (or HVAs) are actions that bring high values to traders. HVAs are actions that:
- are under the trader’s control
- relate to the process of trading
- help expand the trader’s ability to read and trade the market
- put the odds of making successful trades in the trader’s favor
- help bring about trading confidence and more positive emotions to traders
In a nutshell, HVAs help the trader keep attention and focus where it needs to be – on the actions most important to trading – not on the negative emotions and thoughts that pop up sometimes automatically when making a trade. By knowing and concentrating on the actions that have high value for traders, traders can improve their ability to trade well and eventually reach new levels of success. Far too often, a trader’s focus is misplaced. When attention is placed on worrisome thoughts and uncomfortable emotions, traders are distracted and trading becomes a struggle with emotions.
HVAs come directly from the affirmative aspects of sport, human performance, and positive psychologies. HVAs are powerful tools developed specifically to help build the trader’s personal trading skills. They lead to worry-free trading, put traders “in the zone,” and so that traders can reach a better understanding of what is happening in the market.
There are many HVAs a trader can master in the process of becoming competent and successful. We can break down HVAs into three main trading areas:
- high quality preparation
- effective execution of trades, and
- accurate assessment of trades made and trading actions taken.
High quality preparation HVAs that get you ready for trading would include developing a trading plan, locating areas of potential trades for the next day, setting performance goals and practicing performance-related mental skills. Execution HVAs involve such actions as identifying the trade, assessing risk-reward, entry techniques, and trade management, among other activities. Accurate assessment HVAs include evaluating trades and noting where improvements in trade setups and trading performance can be made.
Below are the links to several tools that can help you develop HVAs:
