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Denise Shull—performance coach, brain-science nerd, and author of Market Mind Games—joins the podcast to talk about why feelings aren’t the enemy of good trading, they’re the fuel. She’s coached fund managers across equities, rates, commodities, and FX, and she’s refreshingly blunt about confidence, intuition, and the messy reality of execution. In this interview, Denise explains how traders actually make decisions under uncertainty and why treating your emotions as “information” is the real competitive edge.
In this piece, you’ll learn Denise’s practical playbook: how to separate “trade risk” from “ego risk,” build confidence through deliberate size progression, protect your mental capital, and stop forcing P&L targets on dead, low-opportunity days. We’ll cover her goal→objective→strategy→tactic framework, why scaling in/out teaches execution under stress, and how to use visceral signals without letting them drive impulsive actions—so you can trade what’s happening, not what you hope will happen.
Denise Shull Playbook & Strategy: How She Actually Trades
Core Philosophy: Emotions Are Information, Not Interference
Most traders are taught to “cut the emotion,” but Denise Shull flips that script. She treats feelings as decision data—vital input you translate into action rules—while controlling behaviors, not suppressing signals. This section shows you how to turn visceral cues into practical trading advantages without letting impulses run the show.
- Label the feeling before you place or adjust a trade: “anticipatory fear,” “conviction,” or “ego-threat.” If you can name it, you can route it—trade plan vs. self-protection.
- Separate “act because I feel” from “acknowledge and test the feeling.” Only act after you verify the feeling against the market structure or your signal checklist.
- Treat confidence as a bodily signal (visceral intelligence). If conviction rises but the setup hasn’t been confirmed, wait for your trigger; if conviction fades after entry, tighten risk or scratch.
Goals → Objectives → Strategy → Tactics (GOST)
Denise connects life goals to market objectives, then to strategy, and finally to tactics. That ladder keeps you from forcing daily P&L and focuses you on the best opportunities your market actually offers. Below are the rules to wire this thinking into your routine.
- Define the Goal in life terms (e.g., financial security for family). Translate to Objectives with numbers and timelines; pick a Strategy (product/edge/timeframe), then specify Tactics (entry/exit/hedging rules).
- Ban fixed “$X per day” targets. Each morning, ask: “Given these markets, what trades carry the highest likelihood to hit my weekly outcome?” Build the plan from there.
- For each objective, list capability gaps: “need options hedging,” “need volatility filter,” “need news risk rule”—and schedule practice reps to close them.
Separate Trade Risk From Ego Risk
A lot of “fear of losing” is actually fear of looking wrong or disappointing someone. Denise makes you distinguish self-image threats from trade information, so you stop defending your reputation and start managing your position. Use these prompts and rules mid-trade.
- Mid-trade check: “What do I want, what do I truly think, what am I afraid of?” Only the think bucket is allowed to change the order.
- If a feeling is about you (status, proving it), write one sentence acknowledging it; then run a 30-second re-eval on price action vs. your invalidation level. Act only on what the market reads.
- When ego risk spikes (you catch yourself “needing” the win), reduce the size to half and move the stop back to the original plan—no wide stops to save face.
Position Sizing & Confidence Calibration
Confidence grows from making money at a size you can emotionally metabolize, then stretching, stumbling, and adapting. Denise expects a wobble each time size increases—build that into your plan so the slump doesn’t derail you.
- Size ladder: trade your base size until 3R net over 20 trades → increase by 25–33% → expect a 2–3 week drawdown window; cut back one rung if you breach max loss.
- Predefine stretch rules: the first week at the new size, halve your daily trade count or widen the A+ filter—fewer but higher-quality reps at the new emotional load.
- Treat confidence as capital. If your “conviction meter” falls below a set threshold (e.g., 4/10), cap size at minimum and switch to observation/mark-up mode for the session.
Scaling In, Scaling Out = Execution Training
Deliberate scaling is not just money management; it’s how you learn to operate under fluctuating emotion and information. Denise highlights scaling reps as a bridge to larger capital without frying your nerves.
- Standard scale tree: enter ½ at signal → add ¼ on confirmation (new structure/impulse) → add ¼ on pullback hold; take ⅓ at +1R, ⅓ at structure break trail, ⅓ at target/ATR band.
- No averaging down outside plan. Adds only occur at pre-marked levels that improve risk/reward with the original invalidation intact.
- When conviction fades without technical failure, partial-out first, then reassess—protect mental capital before tinkering with thesis.
Hedging & Directionality Balance
Many traders swing between over-directional bets and over-hedging. Denise uses explicit rules to balance the book so you can keep exposure that matches your read and your stress tolerance.
- Define a “net exposure band” (e.g., +30% to +60% long beta or +0.5 to +1.2 net short gamma). If you breach the band, add hedges or trim into strength/weakness.
- Pre-schedule defensive hedges (e.g., VIX calls monthly) when macro or regime risks loom, rather than panic-hedging after a shock.
- If you can’t articulate why the hedge exists in one sentence, you don’t own it—close it and rewrite the plan.
Daily Planning Without P&L Forcing
Forcing a fixed daily dollar goal leads to chasing on thin days. Denise replaces it with a probability-first question set that aligns the session with a real opportunity.
- Pre-market: “Where is my highest likelihood trade today, and what conditions must appear?” Write the exact trigger, invalidation, and add/trim logic.
- If the answer is “nowhere,” you’re on scouting duty: minimum size only, or no trades—journal structure changes for tomorrow.
- Replace “make $1,000” with “execute three A-setups or none.” Let outcomes follow execution quality.
Emotion Processing: In-Session & Post-Session
You can’t trade well if you’re guessing which feelings are about the chart versus about your identity. Denise’s quick sort separates trade-relevant signals from personal noise so you can adjust risk precisely.
- In-session 60-second check: Name the feeling → Locate it in the body → Link it to “trade” or “self.” Only trade-linked signals can change stops/targets.
- If it’s “self,” do a micro-reset (box-breath 4×4) and postpone decisions 2 minutes; if still agitated, flatten to base size.
- Post-session, journal one “feel → action → outcome” loop you handled well and one you didn’t; design a tiny rule to improve the weak loop tomorrow.
Drawdown & Slump Protocol
Slumps are expected whenever you raise the size or when regime shifts occur. Denise bakes in protocols so you preserve mental capital and recover skillfully instead of white-knuckling the chart.
- Define a two-tier circuit breaker: at −3R on the day, cut to sim or narrative-only; at −6R on the week, drop one size rung and trade A+ setups only.
- Replace “get it back” days with “rebuild conviction” days: one clean setup, normal stop, partials per plan—no revenge adds.
- After any weekly breach, schedule one hour to re-map your Objectives → Strategy → Tactics for the current regime.
Routine: Practice the X-Factor
Denise’s edge comes from systematizing the human element—confidence, conviction, and execution under stress. Treat the following as daily reps to keep the mind-game sharp and aligned with your playbook.
- Morning: 3 prompts—“What do I want? What do I think? What am I afraid of?” Write one line each, then write the trigger & invalidation that would make you act regardless of those feelings.
- Midday: one scale-in/scale-out drill on replay/sim if live markets are dead; annotate where conviction changed relative to price.
- Evening: convert any life-goal friction you noticed (family/security/time) into a micro-objective and a tactic for tomorrow’s plan.
Size Your Conviction: Ladder Risk Up Gradually, Never All-In
Denise Shull teaches that conviction should be earned in the market, not declared at the keyboard. Start with a base unit that you can execute flawlessly, then add only when price action and your plan both confirm. This keeps your first risk small while preserving ammo for the moments that truly deserve it. All-in entries feel bold, but they usually shortcut the feedback you need to size rationally.
Build a simple ladder: 50% on trigger, 25% on confirmation, 25% on the first pullback that holds. If conviction drops or structure weakens, trim first—don’t widen stops to “prove” you’re right. Put guardrails around the ladder with a daily max loss and a rule to step down in size after two losers in a row. Over time, this turns Denise Shull’s philosophy into muscle memory: scale when the market agrees, not when your ego does.
Trade What Is: Prioritize Mechanics And Structure Over Predictions
Denise Shull emphasizes trading the tape you have, not the headline you want. Predictions invite ego; mechanics invite discipline. Define your trigger, invalidation, and target before price gets there, then judge only whether the structure matches the plan. If the setup isn’t present, you don’t have a trade—no matter how persuasive the narrative sounds.
Mechanics mean acting on “if-then” rules: if the level breaks on volume, then enter; if it fails, then stand down. Structure means reading higher-timeframe bias, key levels, momentum cues, and volatility so entries aren’t guesswork. Denise Shull frames emotion as information but insists execution be rule-bound—feelings can inform, they cannot override. When the chart disagrees with your forecast, kill the forecast and follow the rules.
Volatility Sets The Bet: Adjust Position, Stop, And Targets Dynamically
Denise Shull argues that your size, stop, and target should breathe with volatility, not fight it. When ATR expands, cut unit size and widen stops to keep dollar risk constant; when ATR contracts, increase unit size modestly and tighten stops. The goal is stable emotional load per trade, so swings don’t blow out your tolerance just because the market sped up.
Map targets to volatility too: aim for multiples of current ATR or recent range, not arbitrary dollars. If realized volatility drops after entry, scale out earlier and trail tighter; if it spikes, consider partials sooner and let a runner work. Denise Shull’s rule of thumb is simple: volatility determines your bet and your leash—align both, and your performance curve smooths.
Diversify Smart: Mix Underlyings, Timeframes, And Strategy Types For Resilience
Denise Shull reminds traders that one idea expressed five ways beats five unrelated guesses. Diversify first by underlying—don’t let a single sector, currency, or theme dominate your equity curve. Next, diversify by timeframe—pair a swing framework with intraday continuation or mean-reversion to smooth P&L when one regime goes quiet.
Strategy diversification matters just as much. Combine defined-risk plays (options spreads, tight-stop breakouts) with lower-frequency trend holds so you aren’t forced into overtrading. Cap correlation by limiting total exposure to the same macro driver, and stagger entry times so everything doesn’t hinge on one print. As Denise Shull frames it, resilience comes from multiple, preplanned ways to be right—so one market mood can’t sink your month.
Process First: Predefine Entries, Adds, Exits, And Daily Max Loss
Denise Shull is adamant that process beats impulse, especially when emotions run hot. Before the bell, write the exact trigger that puts you in, the invalidation that gets you out, and the conditions that justify an add. If the market doesn’t deliver the trigger, you don’t manufacture a trade. The clarity shrinks hesitation and stops you from taking risks just to feel better.
During the session, execute the script you already trust: enter at the trigger, add only if structure strengthens, and exit when the invalidation or profit-taking rules hit. Set a hard daily max loss and obey it without debate; that one line protects both capital and confidence. Journal each rule you violated and the emotion that pushed it, then tighten tomorrow’s plan by one notch. Denise Shull’s message is simple: process first, feelings acknowledged—but rules make the decisions.
Denise Shull’s core lesson is that emotions are decision data, not noise—and your job is to translate them into rules. Name the feeling, separate trade risk from ego risk, and only let the “think” bucket change orders. Confidence isn’t a pep talk; it’s a visceral signal you calibrate by executing a plan at sizes your nervous system can handle. That’s why she pushes a goals → objectives → strategy → tactics ladder: connect life goals to market objectives, choose the strategy that actually fits your edge and bandwidth, then script tactics—triggers, invalidations, adds, and exits—so execution is mechanical even when feelings run hot.
From there, she turns edge into practice: size in ladders, scale with structure, and let volatility set your bet and your leash. Expect a wobble each time you step up in size, protect mental capital with hard daily/weekly breaks, and stop forcing P&L on thin-opportunity days. Diversify by underlying, timeframe, and strategy type so one macro driver can’t sink your month, and keep a hedge playbook for known regime risks. Most of all, use quick emotional check-ins to distinguish “I want to be right” from “the trade is changing,” and act only on the latter. Put simply, Denise Shull’s playbook is human-first and rule-bound: feel fully, plan precisely, execute cleanly.
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