The Psychology of Result-Focused Trading: Harmful Effects and Process-Based Interventions — A Narrative Review

Consequent behavioral effects are documented at both individual and market levels: elevated turnover, revenge trading, impaired calibration and amplified volatility. Cross-domain findings from pedagogy, neuroscience and decision-support research are marshalled to show that process-focused training, biofeedback, explainable analytics and carefully engineered platform feedback can foster rule-governed behavior and attenuate affect-driven mispricing. The paper specifies concrete proxy measures for procedural fidelity, describes scalable training and platform interventions, and emphasizes the need to match interventions to trader segment, platform design and market regime. Proxy process measures often seem to demand institutional access, technical integration and continuous data streams, and may therefore be costly, vulnerable to gaming, and poorly scalable for dispersed retail traders. These limitations may undermine the feasibility and fidelity of many otherwise promising interventions. By contrast, a simple, intra-psychic proxy may offer a cost-free, accessible signal that redirects attention. This narrative review examines the psychological dynamics of outcome-focused trading and advances a process-oriented alternative for stabilizing trader behavior and improving learning. Drawing on experimental, physiological, neuroscientific and large-scale field evidence, the review characterizes outcome fixation as an attentional and affective orientation toward realized short-term profits and losses that amplifies emotional reactivity, promotes impulsive and compensatory risk-taking, and undermines adherence to pre-specified decision rules. The review then identifies proximal cognitive and biophysiological mechanisms such as loss salience, anticipatory reward signaling, stress-related endocrine effects and capacity limits on deliberative processing, that link momentary feedback to departures from disciplined practice. In this review, we introduce a hypothetical construct termed the “discipline coin” (DISC). DISC integrates the key features discussed above—simplicity, cost-free use, independence from outcome-based feedback and accessibility—and can be employed as an intrapsychic signal to shift attention from short-term profits and losses to consistent adherence to a trading process. However, further research is needed to validate these assumptions empirically.