Procedural Errors

“The market is set up to stimulate primitive emotional reactions in traders and take full advantage of them.” Kenneth Reid, Ph.D

In this section of the website you will find a great deal of information on Seven Factors that contribute to Out-of-Sync Syndrome. The causes are: Aversive Conditioning, Random Rewards, Mind Traps, Scared Money, Procedural Errors, The Trading Trance and Syndrome X

This page describes Procedural Errors, which are natural human tendencies made much worse by Aversive Conditioning and Random Rewards. Follow the links to read about the other causes.


Random Rewards, Mind Traps and trading with Scared Money will undermine your ability to follow a trading plan, leading to additional Procedural Errors such as reactive trading and intuitive trading. Ultimately, this results in excessive risk aversion and negative expectancy from emotional wounding.

Lack of a Trading Plan

An awareness of risk stimulates planning and rule-based behavior. You wouldn’t jump out of a plane without being sure of the exact procedure for opening your parachute and having practiced it on the ground.

If you assume trading is easy or that you already have the necessary skills to trade successfully, then you will fail to formulate an adequate trading plan and fail to develop the skills to execute it flawlessly. You will be tempted to leave too much to discretion. In trading, discretion should be only relied upon by advanced traders. For most traders, discretionary trading exposes you to the risk of random reinforcement, which produces a chaotic and even addictive state of mind. Hello Las Vegas.

Postponing Losses

trading psychology - manage risk

One key to managing risk is to take losses while they are still small. Aspiring traders often want to avoid all losses, which inevitably leads to postponing the one loss that eventually becomes a huge losses. The ‘Oh my God’ loss. Additionally, aspiring traders often form definite opinions about where the market is headed and have difficulty changing those opinions at the appropriate time. These two psychological factors: postponing losses and inflexibility, need to be eliminated because they intefere with proper risk management.

Reactive Trading

emotional trader

Rules give structure to an otherwise chaotic flow of information and enable traders to be proactive. Traders without a clear set of rules will find themselves riding an emotional rollercoaster, at the mercy of his or her instinctive emotional reactions to market movement and to gains and losses. These reactions are rarely conducive to profits.

The market is setup to stimulate primitive emotional reactions from reactive traders and take full advantage of them, without mercy. No wonder Jim Cramer uses the cry of baby as a sound effect on his Mad Money Show.


To trade successfully, you need to reduce procedural errors to minimal levels. My FREE Trading Risk Profile is one way to evaluate whether you are prone to make procedural errors. My trader coaching program will help you eliminate Procedural Errors.

Email me to schedule a FREE 15-Min. CONSULTATION or click here to sign up now.

If you take no other action today my friend, be sure you order my Positive (+)  Neuroprogramming MP3 TRAINING A WINNING MINDSET. Nothing is more important than becoming proactive about your mental-emotional state while trading. It could save you thousands!

Kenneth Reid, Ph.D 

Mastermind Pro

The Cycle of Self-Sabotage can run for years. To finally break this cycle, you need to permanently root out bad behaviors and replace them with good behaviors. There's a new technology that can help you do that... for less than the price of your daily coffee. Read more.

Free AWARE Trader Personality Profile

Finally, an easy to understand Personality Profile that shows you exactly which personality traits help (and hurt) your trading! Read More


Free Report: Secrets of the Top 4%

The largest academic study ever conducted on day traders revealed that most lost money .... even during a raging bull market! About 15% did very well each year, but fewer than 4% of daytraders were able to make significant profits two years in a row. Read More


Increasing Discipline: The Easy Way! (On sale for just $149)

Many aspiring traders lack sufficient self-discipline to stay the course as a trader and protect capital during the learning curve. Willpower is not enough because trading challenges us in profound ways.

Increasing Discipline: The Easy Way is designed to help you increase self-discipline naturally, effortlessly, painlessly using (+) Neuroprogramming technology. Read More


Create a Winning Mindset: The Easy Way! (On sale for just $149)

According to Mark Douglas, the #1 characteristic of top traders is a lack of fear. These folks maintain a positive attitude regardless of the outcome of any particular trade. This technology will help you trade like they do. Read More


Risk Profile

DayTrading attracts individuals with different natural trading abilities. Some people are natural-born daytraders. These Market Wizards (4% of daytraders) are natually fearless, competitive and report little emotion in trading. Read More


Free 15-min Consultation

Trading can be a lonely profession. Chat about your trading for 15-min with a coach who trades. I may be able to offer a few quick tips that will get you back on track. Read More


Free Webinar Notification


Trading Psychology Blog

Traders: Don’t make this costly psychological mistake

The stock market is often likened to a casino, and there are parallels. In both venues, people put money to work in anticipation of rewards, while cognizant of the risks.…
Read more

Trading Psychology: How to Overcome Chasing

Do you have a tendency to chase price? That means, buy high in the hope of selling even higher. Or selling short during a rapid decline without waiting for a…
Read more

Setting Smart Stops

Intelligent risk management means using stops. If a trader constantly gets stopped out, however, he/she may develop an aversion to using stops. They blame the stop, but the problem is…
Read more
View All Posts

Trading Psychology Video Blog

The Psychology of the Zero Sum Game

Zero sum markets are significantly different than asset (equity) markets. In this short video I will summarize the psychological and technical adaptations that aspiring traders need to make in order…
Read more

Trading Psychology: Exploiting The Mistakes of Other Traders

Greetings traders, this is Dr. Kenneth Reid. This video illustrates how traders can get trapped on the wrong side of the market and how you can exploit that circumstance if…
Read more

Mastering Volatility

Market volatility has tripled over the last few months, which poses technical and psychological challenges. In this video I point out 8 ways in which you can master volatility and…
Read more

How to Avoid Whipsaws in Trading

Trading without a technical trading plan puts active traders into visual and emotional reactivity. The more you react, the more often you will experience whipsaws. Reactivity is what makes us…
Read more
View All Video Posts

Coaching Testimonials

"When I met Kenneth Reid I was at the end of my rope. It turns out, signing up for his 6-week program was the best thing I’ve ever done. I learned more with Ken in the first 3 days than I had in years of trading. Part of the reason is that he doesn’t just teach “how to trade,” he teaches you how to be a trader.

This is the most in-depth and highly personalized training I’ve ever experienced. I’ve learned how enter trades with minimal risk and maximum reward. My first day trading I had a 10 1/2 point trade on the ES. I had never done that before. He has shown me how to keep my losses very small and put myself in a position to make consistent profits..." Read More