Shrink Your Losses

Trading psychology isn’t a soft skill you can skip. It’s the whole game. Strategy gets you in the door, but your mind decides whether you stay standing. The good news? None of this is fixed. With the right mental tricks for trading, you can rebuild your relationship with yourself — one small, repeatable habit at a time. Let’s get into it.

---

#1 — Start Small: Trade Just One Contract or Share First

Would you dive head-first into an ice cold pool? Some of us would, but most of us would prefer to dip their toes in first. It’s the same with trading. Starting out with a pilot position of 1, be it a share or a contract, gives you some skin in the game to feel the ebs and flows of market movement, without over-risking things. You can add to this position later on. Even if this ‘1’ isn’t at the perfect entry, it does give you a better sense of direction and timing than a bigger position will, as a very small position keeps your mind in a clearer state.

#2 – Remove Your Skin in the Game to Keep a Clear Mind

Ever heard of ‘post-nut clarity’? I’m sure you did, haha! It’s funny how it relates to trading, because when your head is ‘out of the game’, you can make better decisions. Imagine yourself going to the supermarket while hungry, doesn’t that make you want to buy a lot of stuff to eat? When you’re already satisfied, it makes decision-making a lot easier. Paper trading could also be another way to bridge the gap between risk and clarity. Emotional detachment is what gets you further in trading. The more skin you have in the game, the more goosebumps you’ll get.

#3 — Build a Pre-Market Game Plan and Lineup

Sports have some great analogies that can be used in trading. I don’t think there’s a coach who goes in balls out, without any proper plan or tactic to approach the game. Every coach has a game plan; which players are starting? How will they be positioned? Also, the actual athletes have their own game plan. What is their mindset? How will they approach their opponent? You can apply these things to your own trading: writing entries, exits, and invalidation points before taking the trade. This adds to eventual mental clarity when your entry or exit signals are triggered.

#4 — Use Mental Affirmations to Rewire Your Brain

The science behind self-talk and why it shapes real-time decision-making under stress is big. What you feed your brain is what it believes. Being negative towards yourself creates a negative image, which your mind will believe. You don’t have to be positive every single moment, but you can readjust how your brain thinks about itself. Saying affirmations to yourself before, during, and after a trading session can help you improve your mental state significantly. Even creating your own mantra to read can be a game-changer. The important aspect in this is to repeat it until your brain believes what it just said. Avoid things like “I need this trade to work” or “I hope this works out” and replace them with “I can only control myself, not what the market does” or “I follow my plan, not my emotion”.

#5 — Make Risk Tangible With Physical Cash or Lego Blocks

Numbers on a screen don’t register the same way physical objects do. It’s easier to lose ‘digital money’ than physical cash. It’s a lot easier for me to spend money in the stock market than in a supermarket, where I’m more prone to look for deals in order to save money. The supermarket method of saving isn’t a good thing in the market, because assets ‘on sale’ are often on sale for a reason. Use stacks of cash or Lego blocks on the desk to represent open risk and positions. Physically removing or adding blocks as a position grows or shrinks can be a great way to ‘see’ your trading in reality, instead of only on a screen.

#6 — Journal Trades and Emotions You Feel

Besides having a game plan, which is best written down before taking action, another great way to keep an eye on your progress and mental state is by journaling your trades and the way you felt about them. Did I follow my plan? What do I feel now after exiting the trade? What should I do differently? How did I feel when the trade went against me? Were there urges to override my plan? Doing this for a longer time can help you spot patterns in decision making, in mental state, or even underlying blind spots. Don’t spend too long on it, just quick thoughts to make building a habit easier. Review your journal weekly instead of daily to avoid overreacting to noise.

The short list of tricks:

1. Start Small – Trade just one contract or share first so you get real market feedback without over-risking your position.
2. Remove Your Skin in the Game – The less emotionally attached you are, the clearer your decisions become (paper trading can help bridge the gap).
3. Build a Pre-Market Game Plan – Write your entries, exits, and invalidation points before the trade, like a coach setting a lineup before the game.
4. Use Mental Affirmations – Replace anxious self-talk (“I need this to work”) with control-focused mantras (“I follow my plan, not my emotion”).
5. Make Risk Tangible – Use physical cash or Lego blocks on your desk to represent open positions, so risk feels real instead of just numbers on a screen.
6. Journal Trades and Emotions – Quickly log how you felt and whether you followed your plan to spot patterns and blind spots over time.

---

Conclusion

Six tricks, one goal: get out of your own way. Start small so your position doesn’t hijack your judgment. Detach from the outcome so your mind stays clear instead of clouded. Walk in with a game plan, because winging it under pressure never ends well. Talk to yourself like someone who’s in control — because you are, of yourself, not the market. Make your risk physical so it actually feels real. And write it all down, so the pattern you can’t see today becomes obvious next month.

None of these tricks are complicated. That’s the point! The traders who last aren’t the ones with the fanciest indicator — they’re the ones who’ve built small, boring habits that protect their mind as much as their capital. Pick one from this list and start there. The rest will follow.