Following on from my last post, here is a detailed breakdown of practical steps you could use to address the following potential challenges faced in trading using applied sport psychology techniques.
The below table summarises practical actions you can take – read beyond this for more detail!
| Trading Concept | Sport Psych Concept | Practical Actions |
| Revenge Trading | Self-Regulation | Trigger Drills, 90-Sec Reset, Loss Ritual |
| Seasonality of Trading | Periodisation of Mental Training | Market Mapping, “Deload” Weeks, Focus Blocks |
| Diversification in Trading | Cognitive Appraisal & Stress Adaptation | Risk map, “What’s Working?” Prompts, Role Clarity |
1. Revenge Trading – using Self-Regulation Theory
Trading Concept:
Revenge trading is the emotional, impulsive act of trying to “win back” losses – often leading to further risk and deviation from strategy.
Applied Sport Psychology Parallel:
Self-regulation is the ability to monitor and control emotions, thoughts, and behaviours to achieve goals, even under stress or disappointment.
Practical Steps for Traders:
Step 1: Trigger Recognition Drill (Daily)
- Document your early warning signs of emotional tilt: e.g., clenching jaw, clicking between charts rapidly, internal dialogue of ‘I need to make it back’.
- Keep these on a sticky note or digital dashboard for fast reference.
Step 2: The 90-Second Rule (During Trading Window)
- After a losing trade, implement a 90-second cooldown:
- Step away from screen
- 6 deep belly breaths (inhale 4, exhale 6)
- Recite a cue word: e.g. “Discipline.”
Step 3: Loss Ritual (End of Day)
- Produce a mantra, and reference it at the end of your working day – this may look like:
“My job is to follow strategy, not chase P&L. Today I honoured this process when I ___.”
This reframes the day toward your predetermined identity, e.g., as a disciplined executor, not a profit-chaser.
2. Seasonality of Trading – using Periodization of Mental Training Theory
Trading Concept:
Markets can experience seasonality, i.e. in volatility, volume, and instances whereby opportunities ebb and flow. Traders can feel fatigue or push too hard in low-opportunity environments.
Applied Sport Psychology Parallel:
Periodisation involves cycling training intensity and focus to match recovery needs and peak performance windows (see Bompa & Haff, 2009).
Practical Steps for Traders:
- Map the Macro Calendar (Monthly)
- Build a visual map of expected “high-pressure” zones (e.g., earnings season, FOMC weeks) and “rest zones” (e.g., August lulls, December holidays).
- Plan reduced size or time-off during lower edge periods.
- Mental Deload Weeks (Quarterly)
- Introduce scheduled 2-3 day breaks whereby you do no live trading – only documenting, reading, or strategy review.
- Like tapering in sport, this prevents burnout and boosts clarity.
- Training Blocks (Bi-Weekly)
- Designate certain weeks for specific psychological skills:
- Week 1: “Patience week” → Score 1–5 after every trade on patience.
- Week 2: “Focus week” → Use Pomodoro timers during trade monitoring.
- This intentional cycling trains the “mental muscle” just like a sprinter alternates between speed and endurance sessions.
3. Diversification in Trading – using Cognitive Appraisal & Stress Adaptation Theory
Trading Concept:
Diversification manages risk across instruments or strategies to reduce reliance on any singular outcome. It also buffers emotional volatility linked to any single loss.
Applied Sport Psychology Parallel:
Cognitive appraisal theory (see Lazarus & Folkman, 1984) shows how people evaluate stress. Adaptation to this stress happens when individuals reframe threats and apply flexible thinking.
Practical Steps for Traders:
- Risk Map Review (Weekly)
- Rate your confidence and perceived stress for each active strategy or trading instrument (e.g., score of 1-5).
- Use this to adjust risk – not just based on performance, but psychological bandwidth.
- Use a “What Else Is Working?” Prompt (Post-Loss)
- When one strategy underperforms, prompt a 60-second reflection:
Ask “What’s currently in drawdown, and what’s in sync? What data shows my broader edge?”
- This shifts focus from tunnel vision (one position) to a portfolio mindset.
- Mental Diversification Through Role Clarity (Monthly)
List your roles: e.g.,
- Strategy builder
- Risk manager
- Execution specialist
If execution is off, remind yourself that you’re still progressing in other areas. Doing this can buffer emotional impact and promote an adaptive mindset in the long run.
By Julian Hoare
