Can We "Unlearn"?

I once listened to a so-called Trader's Coach who gave a presentation and blandly asserted that all we had to do was to "unlearn" our bad habits! (By the way, I've asked a number of traders coaches for their academic credentials and they all stated that they had no background in psychology. Instead, they were NLP Practitioners! And yet they were all advertising their ability to help with "trading psychology!")

Well, as we've seen, once a fact is learned, a memory is formed, a behavior is learned, it is permanent! How permanent? I gave the example of an Alzheimer's patient still being able to sing the "ABCD" song. This is termed an overlearned behavior and is the result of many rewarding repetitions. It was fun as a child, as a parent teaching it to their children, and as a grandparent teaching it to their grandchildren. And so the circuits were constantly reinforced and strengthened.

But what about circuits that were NOT constantly reinforced? It appears that they suffer from "disuse atrophy" and shrink in size and strength. But they are still there. And when we recall that fact or utilize that behavior, we regain some of the strength in that circuit. Enough repetitions, and the circuit is fully restored. That, incidentally, is one of the rationales behind modern Alzheimer's Therapy. In early Alzheimer's Disease, the circuits are by and large still there, but the association pathways are weakened. So it takes greater effort to retrace the path to a memory. Therapeutic sessions are aimed at recalling and rehearsing these pathways. "Remember Grandma, your daughter is named ..." Eventually, as cells die, both the association pathways and the original circuits are lost. And then we can say that we've "unlearned" something. So, still want to "unlearn" your bad habit?

So if we can't "unlearn" something, what can we do? Well, the process entails learning new behaviors and replacing our old, destructive habits with these new behaviors. Just about any physical addiction is overcome within about two weeks. By that I mean that the drug is metabolized and washed out of the body and the brain's receptors have returned to normal levels. Addictions persist because the associated memories and behaviors persist. And so what ex-smokers and ex-alcoholics do is build new associations and behaviors and consistently utilize them until they become the preferred pathway. The old, addictive behavior gradually diminishes and, hopefully, atrophies.

But how does our stressed-out Joe Trader go about developing these new behaviors? Frankly, it's not an easy task. One of the keys is to reduce the stress levels. It seems obvious, but if trading is associated with losses and is therefore stressful, then take a break from trading! Let the stress levels and the cortisol levels decline. Then, do a lot of reading and thinking. Revises your trading plan. Or, if you don't have one, then make one!

There are a lot of resources out there. You can pay a bogus "Trader's Coach" thousands of dollars. Or you can make use of legitimate resources. There are even some FREE resources out there for you! Here's a list of my favorites:

Woodies CCI Club. His webcast is free and the moderators offer examples of good trading behavior, risk management and money management. Additionally, there are many helpful resources and insights, strategies and lectures on his website and his"university" site.

Dr Brett Steenbarger is an academic Clinical Psychologist and a practicing trader. He has written "The Psychology of Trading: Tools and Techniques for Minding the Markets"
and "Enhancing Trader Performance: Proven Strategies from the Cutting Edge of Trader Psychology." He has, in addition, an extensive weblog and he tirelessly adds to it: http://www.traderfeed.blogspot.com/
http://www.brettsteenbarger.com/weblog.htm
http://www.brettsteenbarger.com/trader_performance.htm
I recommend that you start at the beginning and read every one of his posts.

Mark Douglas "Trading in the Zone"