Expose yourself! A powerful technique for breaking emotional patterns in trading

By Brett Steenbarger
October 2002

Abstract / Introduction:

Traders love patterns. We trade chart patterns, oscillator patterns, historical patterns, cyclical patterns-you name the pattern, chances are there’s someone trading it. Much of trading boils down to pattern recognition and the ability to quickly identify and act upon profitable patterns as they occur. This is particularly challenging for active futures and options traders, who must read the patterns, make their decisions, and place their orders within a matter of seconds.

Processing market patterns in the midst of our own emotional patterns-our tendencies toward impulsivity, hesitation, frustration, and regret-is one of the greatest challenges of active trading.