Trend following legend Ed Seykota who featured in the original Market Wizards book, built a framework around a simple idea: the habits sabotaging a trader’s performance rarely get solved through logic but rather by engaging with others vis-a-vis your emotions. In fact, many of these problems stem from common trading mistakes.

He calls it the Trading Tribe Process, and it splits the mind into two players 1) the conscious mind, which reasons and plans, and 2) “Fred,” the instinctive part that reacts to danger and opportunity before conscious thought catches up. One of the main goals of this process is to acknowledge and overcome trading mistakes.

When a trader suppresses an uncomfortable feeling instead of processing it, Seykota argues, Fred doesn’t let it go. It resurfaces at higher intensity, sometimes engineering the very drama via a blown stop, a missed breakout, a repeated bad habit that the trader was trying to avoid. These cycles are classic examples of how trading mistakes can manifest emotionally.

The fix isn’t more analysis but instead a receiver: another person who listens without judgment or advice while the trader tracks the physical feeling underneath the pattern until it dissolves. Seykota’s tribes meet for exactly this, trading the roles of sender and receiver in turn.

Arguably, the Trading Tribe Process is one of the most innovative ways to address trading mistakes for long-term success.

Read the full article introducing the Trading Tribe method