Shrink Rap: Overcoming 'Trader's Block'

Editor's note: Welcome to "Shrink Rap," a public forum where readers' questions about the psychological issues surrounding trading, investing and money are addressed by Dr. Steven Hendlin, Ph.D. The following forum is comprised of questions submitted to Dr. Hendlin in response to his debut column on Sept. 5, 2001. Topics for future "Shrink Rap" forums may include dealing with the pressures of trading; obsessive thinking; trading addiction; dealing with losses; perfectionist thinking; trader's block; improving concentration; neutralizing fear and greed; balancing isolation and information overload; and anything else that may be of concern to you. "Shrink Rap" appears on RealMoney.com every Wednesday. Be sure to send your queries to Dr. Hendlin at [e-mail], and, as always, let us know what you think.

Trader's Block, Be Gone!

Dr. Hendlin, being a trader yourself, you must have experienced or observed what I call "trader lock," or the inability to execute when market movement does not agree with one's personal beliefs and assumptions, with the resulting increase in stress and doubt. Maybe this would be a useful topic for the many traders on RealMoney.com who frequently experience this situation.

-- A.D.

Shrink Rap: The "lock" you describe is the result of one form of cognitive dissonance, or the inability to reconcile information that is inconsistent with our beliefs, especially the beliefs about our self-worth. Information that doesn't support what we believe is true can be very unsettling. ...