Update, August 14, 2026: The June promotion has ended. Current membership pricing and benefits are maintained on the Membership page in the main navigation. Join the chat! Inside, we break down the mental leaks behind overtrading, hesitation, revenge trading, fear, ego, self sabotage, and inconsistency. We use frameworks, reflection, and honest discussion to turn trading psychology into something practical. The articles give the framework. The chat is where we do the work. The chat now behaves as a multi-thread discussion forum, where we not only have 1:1 talks but also members have access to the prop firm journal, where I record the journey from eval —> Funded Join me inside! Join Ryan Teiken’s subscriber chat Available in the Substack app and on web Join chat Transcript: Welcome to the Observer AI-hosted podcast where we discuss the psychology around trading, markets, finance, and more. Today we are taking a deep dive into the real mechanics of trading psychology. And I want to start by painting a picture that I guarantee you have experienced if you have spent any time at the screens. Oh, absolutely. Everyone has a story like this. Right. So picture this. It’s a quiet Tuesday morning. The market is just, it’s barely moving. Your watch list is completely flat. You are sitting there staring at the charts and you have done absolutely nothing for two hours. The boredom is thick and then it hits you. It’s this deep, restless itch. You start scrolling through charts. You do not even trade. You start dropping down to the one minute timeframe, just looking for, I don’t know, some kind of price action. Yeah. You’re hunting at that point. Exactly. And before you know it, you find yourself hovering over the buy button on a setup you would normally completely ignore. You just want to feel like you were doing something. Yeah. It is the classic trap for anyone sitting alone at a desk. You take a trade, like literally any trade, just to justify your existence as a trader for the day. Right. It’s like, I’m here. I should be working. Exactly. You feel this subtle pressure that if you are not in the market, you aren’t working. But the reality of that moment and the biological process happening in your brain right then has absolutely nothing to do with finding a high probability setup. Or making money, honestly. Right. It’s entirely a mechanism for emotional regulation. You’re clicking a button to alleviate the physical discomfort of boredom and uncertainty. Wow. And, you know, that gets right to the core mission of our deep dive today. We’re talking directly to you, the beginner retail trader, because for years, the industry has fed retail traders this very superficial, almost, I don’t know, motivational poster level of advice. Oh, the just do better advice? Yeah. You take a bad trade because you were bored and the advice you get is just be more disciplined, follow your rules. And we are throwing that out today. It’s useless. It really is. So we’re going to approach trading psychology as a serious institutional grade decision process. We want to uncover exactly why your execution breaks down the second uncertainty hits. And more importantly, how to actually fix it. But I do have to push back a little right out of the gate here. Sure. Go for it. Doesn’t basic discipline actually work? I mean, if I know my rules and I just grit my teeth and force myself to follow them, isn’t that enough to stop me from taking that bored Tuesday morning trade? Well, I mean, if trading were a purely logical exercise, sure, yes, discipline would be enough. But you’re a biological organism. You’re interacting with an environment of constant financial threat and reward. Yeah, that’s true. So the traditional trading psychology model fails so miserably because it treats execution errors as a motivational failing. Like it makes a structural process error sound like a moral shortcoming. Like you’re just a weak person if you break a rule. Exactly. And think about the implications of that. You can be a highly motivated individual. You can care deeply about your process. You can want to succeed more than anything in the world. And you’ll still find yourself widening a stop loss just to find emotional relief in the middle of a choppy session. Because it hurts to take the loss. Right. A trader doesn’t widen a stop because they suddenly lack ambition. They do it because the biological pressure of uncertainty, you know, the cortisol flooding their system, it just becomes louder than their strategic plan. That makes me think of a medical analogy. Telling a retail trader to just be disciplined when their nervous system is actively reacting to the threat of a live trade. It feels like telling a patient with a severe bacterial infection to just stop having a fever. That is a perfect analogy. Right. Because it misses the entire structural problem. You are yelling at the symptom, but you’re completely ignoring the underlying infection. And that is the crucial shift every serious trader has to make. You have to stop diagnosing the symptoms and start diagnosing the underlying mechanisms. Mechanisms. OK. Yeah. When a trader comes to me and says, I struggle with self-sabotage or I have a problem with revenge trading, they’re naming symptoms. Those are the fevers. So what’s the infection then? The mechanisms. The actual psychological drivers beneath those actions. Things like relief seeking, uncertainty and tolerance or identity threat. Wait, let me make sure I’m following this. You’re saying self-sabotage isn’t an actual psychological mechanism? Because I always thought of it as the singular demon that just ruins my trading. Not at all. Self-sabotage is a cluster of symptoms. And honestly, the behaviors can look entirely different from one trader to the next. Let’s look at two completely different individuals. OK. Trader A gets into a drawdown, their chest tightens, they freeze up and they literally cannot click the mouse to take the next valid A plus setup. The deer in the headlights. Exactly. Now, trader B takes a loss, their face flushes, they get aggressive and they immediately fire off three over-leveraged trades on a random ticker to win it back. Right. Going on full tilt. Yeah. Now, on the surface, these look like opposite problems. One is withdrawing and one is aggressively compensating. But if we drill down to the biological mechanism, both traders are doing the exact same thing. Which is what? They are both trying to reduce the discomfort of uncertainty just using different escape routes. Precisely. Trader A escapes the pain of uncertainty by refusing to participate. Trader B attempts to escape the pain by trying to force the market to give them their money back right now. So the uncertainty ends. Oh, wow. So neither of them is actually looking at the market anymore? Not at all. Neither of them is actually reading the structural reality of the chart. They’re just medicating their nervous system. The market ceases to be an environment of probabilities and just becomes a highly inefficient tool for emotional relief. And the market is a very, very expensive place to seek therapy. Very expensive. So if I am sitting at my desk at home, I need to look for these mechanisms instead of just writing I lacked discipline in my journal. But how do I know when a mechanism is hijacking my decision-making process mid-trade? What is actually happening in my brain the second I click buy that makes me throw my pre-market plan out the window? Well, to understand that, we have to look at how a trade fundamentally changes psychological character the second it goes live. And this brings us to a mechanism called reference points and anchor collisions. Okay. Anchor collisions. Break that down for me. So when you were doing your pre-market prep, your reference point is objective. It is the chart. But the moment you put capital at risk, your brain creates new emotional anchors. Let’s say you take a perfectly planned trade in the first hour of the morning and it stops you out for a $500 loss. Ouch. Okay. You tell yourself, okay, normal variance. I’ll just wait for the next clean setup. But the next setup isn’t really a fresh start, is it? It never is. The setup appears, you enter, and it starts working in your favor. But psychologically, you are no longer just managing a standalone opportunity. That trade has instantly transformed into a repair mission. Ugh. A repair mission. Your brain is no longer anchoring to your entry price or your technical targets. Your new reference point is getting back to break even for the day. You are trying to erase that minus 500 from your daily PNL. Which means I am no longer trading the structural reality of the market. I am literally just trading my emotional relationship to the break even point. And this is where we see anchor collisions. You are trying to manage a live position, but your brain is filtering every tick through a stack of emotionally loaded reference points. Because I’ve got my entry price. You have an anchor tied to your entry price, another tied to your daily loss limit, and maybe another tied to the unrealized profit you saw on the screen five minutes ago but didn’t secure it. Oh, that is the worst feeling. Right. The brain becomes overwhelmed by these conflicting anchors and rational decision making just collapses. You know, that structural collapse explains a lot about the data we see on retail traders. I mean, the numbers show pretty reliably that retail traders cut their winners way too early and they hold their losers way too long. The industry calls it loss realization asymmetry. I always assumed that was just, you know, a manifestation of fear and greed. It is much more mechanical than abstract concepts like fear and greed. It is a biological avoidance mechanism. How so? Think about it. When you have a green trade, closing it secures the win and provid
