Self-deception: what do you tell yourself about your trades?

"It wasn't really against the plan", "the stop was too tight anyway", "I meant to take that loss" — the stories we tell ourselves to soften reality. Self-deception is the tax evasion of trading psychology.

Self-deception: what do you tell yourself about your trades? — drawdown and recovery diagram
An equity curve during a drawdown and its recovery

What's your story?

  • the rationalisation you catch yourself using
  • how you finally saw through it
  • the habit that keeps you honest
Self-deception: what do you tell yourself about your trades? — risk-reward diagram
A risk-reward ratio of 1 to 2

The journal guide makes the stories harder to maintain.

Comments

Log in to join the discussion. Comments follow the community guidelines.

Log in to comment

Loading comments…