*Caught in the Loop: How Inner Focus Sabotages Your Trading*
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was speaking to a trader today who couldn't accept their daily loss limit they came to me saying they had a risk management problem but I said it's not a risk management issue it's a thinking issue.
You know what to do, your just not doing it.
Once you hit a loss you become triggered by the event either through an automatic thought, feeling or image and instead of letting it go you end up in excessive inward mode, this is the state were you overthink, over analyse, and obsess over the incident.
And by staying in this mode you end up making the event even stronger and more relevant. You stay with the negative thoughts which lead to the negative consequences aka not respecting risk.
*Here's how it looks* ...
*Event > Triggered > Inward Focus > Negative Outcome*
The reason you can't accept a losing day is because you can't let the thoughts go, identify with them and you stay in your own head. Instead you need to be able to detach from the trigger and learn to deal with it more healthily. In other words you need to work on changing your 'thinking' strategy.
