Summary and review ofThe Psychology of Trading

Reviewed by Diario de un Inversor · UpdatedJune 13, 2026

Our review

Brett Steenbarger is a clinical psychologist who has spent decades working with traders and institutional fund managers in the United States. «The Psychology of Trading» (2003) begins from a premise that distinguishes it in the genre: trading performance improvement comes primarily not from learning more technical analysis but from deep work on the emotional and behavioural patterns that sabotage execution. Steenbarger applies clinical psychology techniques — particularly brief therapy and cognitive-behavioural therapy — to the trading context, and does so concretely: he describes real, anonymised cases of traders he has worked with. The book identifies the main «altered states» that affect performance — overconfidence, paralysis from fear, post-win euphoria — and proposes specific interventions for each. The clinical approach is what sets this book apart: Steenbarger describes tested interventions, not abstract concepts. The limitation is that some techniques require sustained work over time; the book offers no easy shortcuts.

Key takeaways

• The emotional patterns that ruin trading are rarely random; they are usually learned responses that activate under specific stress conditions.
• Solution-focused brief therapy can help identify and modify those patterns within a relatively short timeframe.
• Keeping a record of emotional states during a trading session — not just of results — is the first step toward diagnosing the real problem.
• High-profit periods can be as dangerous as losing streaks: post-win overconfidence generates systematic errors.

Fact

Brett Steenbarger published «The Psychology of Trading» in 2003 and has worked as a psychologist with traders at financial institutions in Connecticut, USA.