Why most traders only carry out one of the four phases

My first jump was only the jump

The first time I jumped out of a plane, the only thing on my mind was the jump. The rush. The doing. Everything before it was decoration, something to get through before the real thing started.

The more often I jumped, the more that turned around. At some point the jump was the shortest and least interesting part. Everything that mattered was before and after.

I am not a professional skydiver. But this is the first image that came to mind when I started working with traders, and it has not worn out since. Because trading works the same way. People who are new talk about the entry. People who have been at it a long time talk about everything else.

And behind it all sits the same goal. What we want as traders is to be in full possession of our cognitive faculties. We want the rational brain to decide, not the emotional one.

That only works if we know where we currently stand emotionally, and that takes some work up front. Better to do the homework beforehand than to be caught by emotion in the middle of a trade. Because then it costs money.

What is in this article

• Four phases, and the jump is only one of them
• Most people do not fail at phase 2
• Phase 1: the check almost everyone skips
• Phase 3: the moment it tips
• Phase 4: the landing
• The self-test: which phase is costing you money?

Four phases, and the jump is only one of them

Before anyone jumps, they have already been busy for half a day. In this order: first themselves, then the environment, then the equipment. Only once that is settled do they get on the plane.

Then comes the moment at the door, then the jump. And right at the end the landing, where the point is not how spectacular it looked but whether you arrive safely on both feet.

A trading day is built the same way.

With one difference that changes everything: a jumper lands and is done. You start again from the beginning.

Most people do not fail at phase 2

What I see again and again in my work with traders: most of them are excellent at phase 2. They know their market, they have good tools, many have clear routines. What gets skipped is phase 1 and phase 4. Almost always both.

The industry numbers point the same way. In an analysis of more than 300,000 prop firm accounts, 14 percent of traders pass the challenge and only 7 percent ever receive a payout. The most common reason for failing is not that someone did not know their strategy. It is the daily loss limit being breached: blown up in a single bad session, not ground down slowly.

That is not a knowledge problem. It is a problem with the phases nobody practises. What one of those single sessions looks like from the inside is in Revenge trading: catching the moment emotion takes over.

Phase 1: the check almost everyone skips

Before a school exam, students are asked whether they feel in a fit state to sit it today. There is a reason that question is asked. And there is a reason nobody asks it of themselves before a trading day: it is uncomfortable. The honest answer can be no.

Traders often have clear routines. Coffee, news, charts, platform on. What is missing is the moment in between, where you look at yourself instead of at the market.

Anyone doing this professionally does not just ask. They have a tool for it.

The simplest one is a minute of breathing. Not meditating, not relaxing. Just putting your attention on your breath for a minute and then seeing what comes up. What surfaces in that minute is usually exactly what would otherwise have taken over the decision at half past three.

The second tool is a triangle: body, head, heart.

With the head, writing things down matters more than it sounds. It is not tidiness, it is permission: the topic is allowed to take a break, because it will not get lost.

The key point: it is entirely fine that something is there. This is not about making it go away. It is about knowing it, because only what you know can be factored in.

And then comes the actual question: can I do this today?

Phase 3: the moment it tips

In skydiving it is the situation nobody planned for. An air pocket. Something that forces an immediate decision while you know that the decision has consequences.

In trading this moment looks different for everyone. For many of my clients it is not the big market move but something much quieter: impatience. Nothing is happening, the setup does not come, and eventually you take what is there.

It almost always announces itself beforehand. Not in the head, though, but in the body. Breathing that gets tighter, pressure on the chest, a clenched jaw. Anyone who knows their own sign has a few seconds of lead time, and that is all it takes.

You only use those seconds if it is settled in advance what happens then. Not "then I pull myself together", but a concrete action attached to a concrete signal. That is the most effective form of behaviour change research knows: a meta-analysis across 94 studies found a medium to large effect for if-then plans of this kind. General intentions do not work, concrete ones do. How to turn that into rules that hold when it counts is in Why you break your own rules even though you know them.

Phase 4: the landing

Here is the second big gap. The last trade is closed, you are elated or you are not, and then you are simply finished. No review. With that, a data point is gone that you will never get back. A plane checks in and checks out again. A trading day should run the same way.

And now the part I consider the most important.

If someone tells me they lost 800 euros today, that number on its own tells me nothing. It only becomes readable through two things: how much risk was planned for today, and how the 800 came about.

There are three completely different answers to the second question.

• You made a decision badly.
• You were in no state to be deciding at all.
• The market did what markets sometimes do, and you stuck to everything.

Those are three different days and they need three different consequences. The number 800 is identical in all three.

Someone who stops after three losing trades because that is exactly their rule, and where none of them was bigger than their defined size, has had a good day. Even with a minus.

That is why the daily review covers both. Profit and loss, yes. But just as much: how consistent was I? How disciplined? What could I have done better? And above all: what did I do to avoid losing more?

That is a bigger question than good or bad, and it is the only one you can learn from.

Where the image stops fitting

A skydiver jumps once. A trader jumps again and again in a single morning.

I do not want to overstretch this, but the direction holds: the same kind of load, the same skills, the same exhaustion afterwards, only compressed into two hours. Which is exactly why breaks are not a luxury but part of the equipment. No jumper would go up five times in a row without checking their gear in between. In trading, the gear is your head.

The self-test: which phase is costing you money?

Twelve statements, four blocks. Answer each one honestly with yes or no.

Phase 1, the check with yourself

• I know what state I am in before I open the first chart.
• I check that in a fixed way, not just by feel.
• In the last three months there was at least one day where I did not trade because of it.

Phase 2, environment and equipment

• I know before the start what I am trading today and what I am not.
• My goal for the day is something other than "make money".
• My loss limit for today is set before the first trade runs.

Phase 3, the jump

• I know my personal early warning signal, and it is a physical one.
• There is a fixed action attached to it that I defined in advance.
• My breaks are in the calendar, not at my discretion.

Phase 4, the landing

• I close the trading day deliberately, even when it went well.
• My review asks about rule adherence, not only about the result.
• I take exactly one thing into tomorrow and write it down.

What the result means

Most of your noes in block 2. That is rare. Then your building site is craft, not psychology, and that is good news, because craft can be learned quickly.

Most of your noes in block 1 or 4. That puts you with the majority. And that is where things move fastest, because both phases together cost less than ten minutes a day.

Most of your noes in block 3. Start with block 1 anyway. What tips in phase 3 is usually already set up in phase 1.

How I work with this

In coaching we go through these four phases and look for where it tips for you. That is detective work: how you prepare, how you sit, how often you take a break, what tells you that something is building. Out of what we find we build tools that fit you. Not me, and not a textbook.

The first step is a short, non-binding intro call.

About the author

Angelika Behling is a performance coach for traders. More than eleven years of coaching experience and over 410 traders and teams supported. She trades her own capital. Contact and booking at coachfortraders.com.

Sources

• Gollwitzer, P. M. & Sheeran, P. (2006). Implementation Intentions and Goal Achievement: A Meta-Analysis of Effects and Processes. Advances in Experimental Social Psychology, 38, 69–119. (94 independent tests, effect size d = 0.65)
• Analysis of more than 300,000 prop firm accounts from around 100,000 traders across ten providers, data by FPFX Tech, published by hoc-trade.