Brett N. Steenbarger, PhD

Introduction: So you have your funds deposited, your broker picked out, your office up and going, your trading strategy has been back tested and looks strong, everything is now in place to make money.  But wait something is missing, as every successful trader knows, all of these things are useless if your psyche is in the wrong place.  Dr. Steenbarger puts the trader’s psyche “on the couch” in this well written, must read book on the psychology of trading.

Summary:  The Psychology of Trading is a little over 300 pages and each chapter tackles a different pitfall that trader’s are prone to falling into.  Dr. Steenbarger draws from his years of counseling and trading to combine the two disciplines to create a treatise on gaining control over your own trading and thus make the most of your market knowledge.  Dr. Steenbarger does an excellent job of recognizing that not all of a trader’s stress comes from the job and that conditions outside of the office must be evaluated as seriously as those in the office.  He lays out excellent techniques for being mindful of your emotions before, during, and after trading.  Upon employing some of his techniques to your trading regimen you quickly develop a zen-like ability to not eliminate your emotions, but recognize and master them. 

What separates Dr. Steenbarger’s book from many others in the genre is his employment of very modern techniques that explore the new field of neuroscience and takes advantage of the explosion of technology related to brain activity and functioning.  He demonstrates the applicability of brain monitoring devices and how they can be utilized to enhance a trader’s awareness of their emotions in the midst of their trading.  Dr. Steenbarger brings an air of authenticity to his writing because he is actively trading himself and every chapter has a real life story to go along with it.  These stories make the book much more believable and also much easier to read as it gives the reader a real life example to relate to. 

The Bottom Line: You should not start or continue to trade if you are not daily taking stock of your emotions and the role they are having on your trading.  Dr. Steenbarger highlights some of the most common problems that traders develop and offers many different techniques to not only combat these problems, but prevent them in the future.  Therefore, if you are not taking stock of your emotions daily or you are a new trader and want to recognize and master your thoughts read The Psychology of Trading by Dr. Steenbarger and you will see the results in not only your trading, but every aspect of your life. 

Rating: 9/10