At the core of my coaching with my trading clients is a process involving three key elements – reflection, insights and action.
Reflection is the process of reviewing their trading decisions, market experiences and performance, assessing what has gone well and what could be improved.
Insights arise out of the reflection process, are a manifestation of the learning that comes from reflecting, and are in essence identified opportunities for potential action.
Action is the process of putting the insights into practice. This is where new mindsets and new behaviours are practiced and developed, where performance is improved.
I have often found in my work with traders, that outside of their experience of being coached, not much time is spent deliberately engaging in the process of reflecting, looking for insights, and consciously turning these insights into concrete and specific actions.
Traders self-improvement is often more of a random affair beyond their formalised training period, and often assumes and relies on learning through experience, by being at the screens. However, simply trading, does not ensure learning or improvement. As John Dewey said, ‘We do not learn from our experience … we learn from reflecting on our experience.’
“We do not learn from experience... we learn from reflecting on experience.” ― John Dewey
A good trading journal provides space for traders to reflect on their trading experiences, to review what they have been doing well, what they could have done better, to look for learning and insights, and to identify opportunities for taking action that will improve their trading performance. Journaling, and specifically psychological (mind) journaling, engages traders in the process of self-coaching.
Coaching seeks to improve a trader’s self-awareness, self-regulation, and to enable self-improvement. A well-structured journal can provide similar benefits, increasing self-awareness through self-reflection, providing self-regulation through the practice of writing about their trading experiences, thoughts and emotions; and facilitating self-improvement by encouraging traders to set goals – and particularly learning and developmental goals - and to create plans for taking specific action to achieve those goals.
Steve Ward