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with Sean Sawyer, MS

Session: #056 | Why Trade Psych Plans Rule

October 28, 2024

Key Points:

  1. A psychology plan rooted in repetition and state-dependent learning is vital to sustaining effective trading habits.
  2. Cognitive defusion, emotional regulation, and behavioral grounding practices reduce the likelihood of impulsive trading decisions.
  3. Embracing psychological flexibility enhances a trader’s ability to adapt and remain resilient under pressure.

Summary:

In this session, Sean Sawyer emphasizes the critical role of a structured psychology plan in trading, particularly the value of revisiting foundational practices. He explains that habits are built through repetition and can either support or hinder a trader’s performance. To build sustainable skills, he reminds traders that consistency is not just about completing actions but integrating psychological habits like grounding and emotional regulation into daily trading routines. This simple approach creates a buffer against rash decisions, often sparked by heightened market conditions.

Sean shares insights into “state-dependent learning,” where the conditions under which traders practice and learn skills—ideally while trading or preparing to trade—determine how well they can access and apply those skills under real-time pressure. The session also underscores the benefits of intermittent reinforcement (used via “Skinner alerts”) to keep psychological tools fresh in traders’ minds, particularly grounding and defusion exercises. Sean discusses how small, repeated efforts can sustain attention and reduce avoidance behaviors, even during choppy market conditions, where impatience and impulsivity can easily take hold.

A core element of the session revolves around “psychological flexibility,” which Sean describes as the ability to recognize emotional triggers, detach from unhelpful thoughts, and bring focus back to grounded actions and values. He addresses how staying present allows traders to make decisions that align with their financial and personal goals, preventing the trading environment from becoming overwhelming or all-consuming. One participant observed, “Part of the purpose of the Four Steps isn’t to make you a better trader; it’s to give you the truth about the trader you are.” This reflection speaks to the importance of honest self-assessment in improving performance.

Through several anecdotes, Sean illustrates how small stress levels can help maintain alertness without tipping into anxiety. He also highlights the need for genuine cognitive and emotional flexibility, cautioning against an overly rigid mindset that could limit a trader’s ability to adapt to evolving market conditions or personal growth opportunities.

C.L.E.A.R. Mindset Connections:

Connect to the present moment and enhance your self-awareness with practical techniques.

  • Traders practice grounding techniques like temperature-focused breathing to stay attuned to the present, enhancing situational awareness.

Loosen your attachment to thoughts and emotions, and cultivate mental clarity and resilience.

  • Using cognitive defusion, traders learned to observe but not react to impulsive thoughts, enhancing emotional regulation and resilience.

Embody your core values and align them with your actions to foster authenticity and purpose.

  • Participants reflected on their motivations for trading, linking their actions to broader life values to maintain perspective.

Accept all the present moment offers, whether wanted or not, and find peace and strength.

  • Through mindful observation, traders learned to accept discomfort in choppy markets without acting impulsively, fostering patience.

Respond with decisive, informed action, transforming challenges into opportunities for growth.

  • Applying the Four Steps model, traders practiced using setbacks as learning opportunities, building skills in emotional resilience.

Actionable Strategies:

  • Establish regular “Skinner alert” practices to remind yourself to use the Four Steps model during active trading sessions.
  • Identify and reflect on your values daily to anchor decisions and manage impulsive behaviors.
  • Practice grounding exercises, such as focused breathing on temperature changes, to center attention and maintain composure.

Act Accordingly:


An effective psychology plan provides a structure for managing emotional and cognitive trading demands. By establishing a routine of grounding, emotional regulation, and self-assessment, traders can significantly reduce impulsivity, stay aligned with their core values, and sustain performance over time.

Sean Sawyer, MS

Psychotherapist | Performance Coach

Sean Sawyer, a psychotherapist since 2003 and full-time trader since 2017. Sean uniquely blends psychology and trading, offering insights from both worlds. His experience in psychological trauma and performance psychology helps individuals master decision-making and resilience in high-pressure situations.