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When Thinking Too Much Stops Your Trading Success

Posted by Tradeguider Team on Tuesday, June 21, 2022
Tradeguider Team

In the legendary sports psychology book The Inner Game of Tennis Timothy Gallwey talks about how he observed his tennis students had two selves: one that is critical, judging, coaching and the other that just did the tennis playing.

He found that people played better tennis when the first is paused and the second is allowed to flourish. This could also be described as overthinking versus being in the zone.


What is overthinking when you are trading? 

‘The more you think, the more problematic the trading can become’, says Gavin Holmes, Chief Executive Officer of TradeGuider.

It’s important to be thinking enough that we’re following our trading plan, reading the signals properly, evaluating our options, but we don’t want to be thinking beyond that.

If we have too many charts open or paralyze ourselves by referring to too many different trading methods then we can stop our trading from flowing.


So what is the flow state

You know when you’re doing something that you enjoy or find rewarding, you feel capable of doing, and you get on a roll, focused, compelled to carry on? This is often something with a repetitive nature to it. We are completely focused and time flies and we feel like we are accomplishing something. That’s the flow state.

When we’re in it we get absorbed in doing the activity and the self-critical or self-coaching self is quiet. We’re not judging how well we’re doing, or being indecisive about how to do it, we’re just doing.

How does it apply to trading?

Once you have got to unconscious competence with your trading - you have practiced and internalized the process - you can enter into this automatic way of doing.

This doesn’t mean being mindless: you will still be analyzing what you see on the chart, employing discipline and patience (so therefore using some reasoning). But not doing any unnecessary questioning or thinking.

How to get in a flow state

This isn`t going to happen until you are familiar and confident with the process and trust yourself to follow the rules and procedures for your level of trading at the moment. Then:

  • You need goals that are a challenge but are achievable
  • You need to be in a headspace where you aren’t worried by distractions
  • Don`t multi-task - uni-tasking is essential
  • Be in a stress-free state
  • Make sure the physical space in which you trade is conducive to being focused

Make the right things be automatic

Our minds have an invaluable ability to process many things - as well as run the many functions of the body - automatically. But this can also be problematic as it facilitates many of our unhelpful habits, whether physical, emotional or cognitive. The brain also tunes out things it has learnt aren’t important, whether rightly or wrongly.

So a key step is to become aware of what is automatic or invisible for you, employing some mindfulness or non-judgemental awareness:

  • What kinds of thoughts are you thinking when you think about trading, when you sit down to trade, when you execute a trade, at the end of your trading session – are they helpful?
  • Do you get so into the flow state that you overdo it, for instance, forgetting to eat, drink and putting off trips to the bathroom or sleep?
  • Have you been ignoring any physical discomfort at your trading station, for instance, is your chair uncomfortable or are you holding your neck in an unnatural way to see your screen(s)?

Mindfulness is both a formal and an informal practice and there are many ways to engage with it. The main thing to remember is that it is a skill to practice, it is simple but might not be easy, and the goal is not to clear your mind, but just to develop an ability to observe the mind and body in a very present way. It helps us become aware of our habitual actions and ways of thinking as well as physical sensations: the first step to changing them.

How to change

So once you’ve developed an awareness of any unhelpful thought patterns, how do you change them?
Here are some examples: 

  • For a week or two, note your thoughts and feelings alongside your traditional journal or log. How relevant, helpful or logically sound are they?
  • Thoughts and feelings are not facts. Research cognitive distortions and see which ones you are entertaining.
  • Use thought-stopping techniques.
  • Practice relaxation skills whether through mental exercises or physical treatments like massage or reflexology.
  • Make sure your biochemistry is helping you here: get a professional practitioner to help you optimize your diet and any supplements to reduce the stress response and negativity biases.



The mind is a malleable thing as are your habits, providing you believe and expect you can change. So in the same way that you track and fine-tune your trading performance for optimal profits, make sure you do the same with your trading mindset.

We’ll be talking more about developing the optimum mindset for trading at our Mastermind event this week, covering the practical details that are just as important as belief systems and mindset techniques. 

Tradeguider is the home of Wyckoff VSA. Our mentorship programmes cover more than just mindset – we include virtually every aspect of becoming a successful trader using Wyckoff VSA. You can find out more by going to our Mentorship page.


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