The topic this time is the self-control bias, that like the loss-aversion bias belongs to the emotional biases category.
The self-control bias identifies a situation where people cannot achieve their long-term goals for a lack of self-discipline. The classic example is the gym training. Many starts, but very easily they give up after a while, even though improving their shape is an important objective. But another nice example to illustrate this bias is the marshmallow test.
The marshmallow test is an experiment conducted by W. Mischel, a professor at Standford University, in the ’60s. A group of kids was given a choice between a small gift (usually a marshmallow) immediately or two of them if they could wait for a few minutes. It was then observed that the kids who could wait to get two marshmallows, in general, did better in life.
Why is this important in trading? Because self-discipline is crucial. You need to follow your system and remember what is your goal. And to “keep on track”, NLP can provide pretty useful tools (see e.g., these two articles about NLP and reframing).