A Trader's Self-Evaluation Checklist

By Zachary West,2014-04-16 14:27
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A Trader's Self-Evaluation Checklist

    A Trader’s Self-Evaluation Checklist

    Brett N. Steenbarger, Ph.D.

    1) What is the quality of your self-talk while trading? Is it angry and frustrated;

    negative and defeated? How much of your self-talk is market strategy focused,

    and how much is self-focused? Is your self-talk constructive, and would you want

    others to be talking with you that way while you’re trading?

    2) What work do you do on yourself and your trading while the market is closed?

    Do you actively identify what you’re doing right and wrong in your trading each

    daywith specific steps to address bothor does your trading business lack

    quality control? Markets are ever changing; how are you changing with them?

    3) How would your trading profit/loss profile change if you eliminated a few days

    where you lacked proper risk control? Do you have and strictly follow risk

    management parameters?

    4) Does the size of your positions reflect the opportunity you see in the market, or do

    you fail to capitalize on opportunity or try to create opportunities when they’re

    not there?

    5) Are trading losses often followed by further trading losses? Do you end up losing

    money in “revenge trading” just to regain money lost? Do you finish trading

    prematurely when you’re up money, failing to exploit a good day?

    6) Do you cut winning trades short because, deep inside, you don’t think you’ll be

    able to make large profits? Do you become stubborn in positions, turning small

    losers into large ones?

    7) Is trading making you happy, proud, fulfilled, and content, or does it more often

    leave you feeling unhappy, guilty, frustrated, and dissatisfied? Are you having

    fun trading even when it’s hard work?

    8) Are you making trades because the market is giving you opportunity, or are you

    placing trades to fulfill needsfor excitement, self-esteem, recognition, etc.that

    are not being met in the rest of your life?

    9) Are you seeking trading success as a part-time trader? Would you be seeking

    success as a surgeon, professional basketball player, or musician by pursuing your

    work part-time?

    10) Can you identify the specific edges you possess over the many other motivated,

    interested traders that fail to achieve success in the markets? Do you really have

    an edge, andif sowhat are you doing to maintain it?

    Brett N. Steenbarger, Ph.D. is Director of Trader Development for Kingstree Trading, LLC in Chicago and Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY. He is also an active trader and writes occasional feature articles on market psychology for a variety of publications. The author of The Psychology of Trading (Wiley; January, 2003), Dr. Steenbarger has

    published over 50 peer-reviewed articles and book chapters on short-term approaches to behavioral change. His new, co-edited book The Art and Science of Brief Therapy is a

    core curricular text in psychiatry training programs. Many of Dr. Steenbarger’s articles and trading strategies are archived on his website,

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