How to Develop Mental Toughness in Trading

Mental Toughness in Trading

In my opinion, day trading is top on the list of mentally stimulating professions.  It requires a mental toughness unparalleled by any other business.  For example, the influx of emotions and sensations felt by someone in a short-term trade can bring on fear stronger than that of certain death, or a euphoric sensation as if you just inherited a windfall of profits.

To become a professional trader with the ability to thrive in all market conditions, one must develop understanding and control over their personal psychological strengths and weaknesses.  In this article, we will talk about 4 steps that can help you develop a strong trading psychology and confidence to become a top-level day trader.

The only way I know of to build a strong belief system in any given method, system or approach to trading is no-risk observation for a long period of time. How long, you ask? Long as it takes. As long as it takes any person to shift from fear protectionism avoidance sequence to trust confidence consistent application of a successful trading approach. Unless you realize this already, I’m here to tell you that it absolutely cannot happen if you or anyone tries to build mental = emotional confidence while trading real money in the process. It absolutely, positively cannot happen and you will certainly, undoubtedly 100% fail without question. Adding the real-money risk variable to an equation of building trust will ruin results every time. Every single time.

Mental preparation comes from practice. Studying charts pulled backwards thru weeks and months of data to visually back-test results. Watching charts in real-time to visually see results. Over and over again, as long as it takes to build and maintain confidence in your approach. If you succumb to the usual human weakness of trying to “earn while you learn” it will result in “burn while you learn” every time. Every single time.

Do not fall prey to the logical failure which so many before you have done. Practice, practice, practice. This weekend ahead is the annual NFL draft. Some of the top picks straight out of college will be signed to eight-figure contracts of staggering proportions. None of them, not a single one is ready to start a real NFL game against experienced players. All of them will spend endless hours in class rooms, in the weight room, in film study and then on the practice fields. Why is that? To build their inner belief systems that they can each compete and succeed in real time when it counts.

So why does anyone with a few thousand dollars in a trading account believe the process is any different for them? One reason is the random-chance aspect of trading. It is possible to click into a trade, essentially throw money at the market in pure gambling fashion and have more money thrown back as a result. It is entirely possible in trading to hit a big score, any time. It’s equally possible for the first QB picked in any draft to step onto a playing field for the first time in September without any practice at all and throw a touchdown pass. Or two. Or three. But will that same rookie QB build a hall-of-fame career like that? What happens when they get sacked five times, fumble two times and throw three interceptions in the first half of their next game? Do you have a stable, confident athlete on the sidelines? Or do you have a muddled, puddled mess of insecurity and dejection slumped over on the bench?

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