Bad trading habit correction

Have you tried to correct one or more bad trading habits which you identified after reviewing your past trading diary? How is the success rate? I tried, not only once, twice, but many times. The bad habit might go for a while, but it would come back and destroy my mental capital and real capital one more time whenever I thought I was ok to go further.

Why is so hard?

The progressive development of skilled automated habit patterns is hard-wired into human learning. According to Dodgson (1987), skill development typically follows these four sequential stages:

1. Unconscious incompetence (we are unaware of what we don’t know)
2. Conscious incompetence (we know what we don’t know)
3. Conscious competence (we can do it but only by consciously attending to each component or step of the skill)
4. Unconscious competence (we perform the skill in automatic mode, without conscious attention to each of the steps involved).

How do habit pattern errors arise? Many habit errors develop when, for some reason, e.g., misinterpreted instructions, poor quality instruction or self-taught efforts, the performer learns to do things wrong and this learned error progresses, through practice, to the autonomous stage of performance (Pyke, 1980). At this point it is no longer under conscious control.

Mental mechanisms that affect learning and memory have been widely studied by psychologists. One of these mechanisms, proactive inhibition (PI), also known as habit pattern interference, is an interference effect on learning and memory produced by, “conflicting associations that are learned prior to the learning of the task to be recalled”.

A key point in the PI explanation of why old habits die hard is the notion that PI is automatically activated whenever the brain detects that new incoming information is different from what has already been learned, stored and automated.

Ok, I confess my poor English skill do not allow to write such academic information. I copied above information from a professional site: Habit Pattern Correction In Driving. Go read it through even it’s a bit long. Just remember to substitute “driver” to “trader”, and “driving” to “trading” during your reading.