1995issue C011

Evaluating emotional overrides in a rule-based decision procedure

A psychology self-audit is useful only when it tests whether live entries, exits, and sits-out still match the written rules. The historical workflow asks whether results would more closely match the system's expectations if those rules were followed, and whether major losses have to be recouped after they were not.

Editorial reading: treat the person running the book as part of the decision procedure, and use a self-audit only to test whether live entries, exits, and sits-out still match the written rules.
One self-check asks whether results would more closely match the system's expectations if the written rules were followed, and whether bodily discomfort appears on a regular basis.
A further self-check asks whether major losses repeatedly have to be recouped because rules were not followed, a loss recoup after a rule departure.
The same sequence of stress, outburst, and outcome can repeat as a recurring negative pattern, with held tension after the episode.

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Current trackTrading psychology process376 readings

The person running the book

The historical workflow places psychology self-checks next to the written rules. One self-check asks whether results would more closely match the system's expectations if those written rules were followed.

TradersWeek editorial reading: treat the person running the book as part of the decision procedure. Entry, exit, and abstention rules are evaluated together as one process. A self-audit is useful only when it tests whether live entries, exits, and sits-out still match the written rules, or whether an emotional recovery loop has replaced them.

Company, body, and self-attack

That same self-check asks whether others enjoy the trader's company and whether bodily discomfort appears on a regular basis.

It also asks about criticism of self and others, ongoing disappointment from unmet expectations, feeling unappreciated or unloved, and a wish to retaliate.

It includes a question about self-destructive behavior, with smoking, drinking, drugs, and gambling given as examples.

Loss recoup after a rule departure

A further self-check asks whether major losses repeatedly have to be recouped because rules were not followed. This article calls that a loss recoup: trading meant to recover a large loss after a rule departure.

It asks whether family and friends show discomfort or insecurity because of the trader's actions, and whether someone has named a problem that was then dismissed.

Held tension and recurring negative patterns

The further self-check asks about excused mood swings, how often excessive blowups occur, and how long tension is held. This article calls lasting tightness held tension: physical or emotional tightness that persists after a trading episode.

It asks what happens before and after those episodes, whether negative experiences repeat as patterns, and how severe a fall must be before a problem is admitted. This article calls that repeated sequence a recurring negative pattern: the same sequence of stress, outburst, and outcome repeating across episodes.

Educational research material, not investment advice. Historical source context does not establish present-day performance.

15 of 89 in the Trading psychology process track

19951-4 pp.Next on Trading psychology processConstruct centering into entry, exit, and abstentionA usable procedure is described as committed objectives, management of emotion and fear, and adherence to a written strategy.

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By fieldDecision process416 readings By year1995126 readings

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