Power Of The Pause

The common sequence I see from traders is below.

Losing Traders: Impulse → 'Trade' → Repeat

Winning Traders: Impulse → 'Wait'

Breaking your trading rules is a bad habit to develop.

Especially when it works out well in your favor.

This eventually causes you to:

- Spiral out of control

- Become reckless

- Destroy your account

It only takes one moment of impulsiveness to destroy weeks, months, and years of hard work. This is why most traders are blowing up constantly because they don't have a process in place to stop an impulsive trigger in the moment.

They are just on autopilot creating a perpetual sabotaging process and no clue on how to stop it.

So the first step is simply to gain awareness. This can be done by journaling the moments where you have these triggers that ruin your results. This may be painful as you will most likely be recording after the fact.

But as painful as this is you must start logging your painful moments so you can create the awareness of the problem and then when you gain awareness, you can then begin to create self-awareness in the moment.

If you want an easy way to track your emotions, maybe take a look at my 'Emotional Tracker' Which makes this process much easier and painless.

Once you have created self-awareness of the problem, you can then use techniques to prevent, reframe and remove yourself before the sabotage has a chance to take over.

Here is one simple technique you can start using:

A simple method for when you feel you are getting impulsive:

- Stop and take a deep breath

- Count back 5,4,3,2,1

- Speak out loud why it's a bad idea

- Count back 3,2,1

- Then walk away

What this does:

- Forces you to 'stop'

- Slow yourself down

- Reframe with logic

- Remove yourself from the environment

Using this method creates the vital seconds needed

You are creating a 'pause’ in between impulse & reaction

Instead of: Impulse > Reaction

It's now

Impulse > Pause > Reframe > Remove

When you use this method you are creating control, with the control you create empowerment. With that, you gain confidence and confidence is vital to trading success.

I also want to just go over the very last step of the process and explain more clearly what is actually happening as it may go unnoticed.

When you count down from 3,2,1. On the 1 you have to make it a rule to walk away straight away as soon as you hit 1. This is because you are focusing on creating a reaction that must be made into a habit. You are making a non-negotiable rule or contract with yourself that on the 1 you must remove yourself. This part of the method is the most important.

In the back of your mind when counting down you must have this thought at the forefront of your mind that on 1 you are done. If not then the previous steps are meaningless.

Conclusion

A simple but powerful method to stop you in the moment from making an impulsive and emotional trading mistake!

If you enjoyed this & want to learn more tips like this go grab my book ''The Blueprint To Trading Psychology.'' were I go into much more detail on the psychology side of trading.

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Quick answers

How do I stop impulsive trading in the moment?

Build a pause between the impulse and the reaction. When you feel it coming, stop and take a deep breath, count back from 5, say out loud why it's a bad idea, count back from 3 and then walk away. It gives you the vital seconds you need to think instead of react.

Why does the walking away step matter so much?

It's the part that turns the method into a habit. You make a non-negotiable rule with yourself that the moment you hit 1, you remove yourself from the screen. Without that, the steps before it don't really mean anything.

Where do I start if I keep breaking my trading rules on impulse?

Start with awareness. Journal the moments where a trigger ruined a trade, even if you're writing it up after the fact. Once you can see the pattern, you can start catching it in the moment.

Is breaking a trading rule fine if the trade works out?

No, that's often the worst outcome. It rewards a bad habit, and over time that habit can make you reckless and undo weeks or months of good work.

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Hope you enjoyed this method and hope it helps!

Speak soon,

Alan aka The Divergent Trader

Want more like this?

I send one short email a week on the mental side of trading and keeping it simple. No hype and no signals. Join the free newsletter here.

Two more ways I can help, whenever you're ready:

• Watch the free video on how I trade in about 10 minutes a day with simple, rule-based swing trades on the daily chart.

• Read The Blueprint To Trading Psychology, my short book on why you break your own rules and how to stop.

About Alan

Alan Edward (The Divergent Trader) is a full-time trader. It took him about five years to get consistent, and he now teaches a simple, low-screen-time way to trade, plus the mental side that goes with it.

Trading carries a high level of risk and you can lose money. This post is for education only and is not financial advice.