“The Trader’s Mindset” is what a amateur trader need to work on to move in category of professional trader. Any World Class Athlete you would have seen give much importance to the MINDSET before any big game. So its only your MIND you need to TRAIN to be a good trades. Millions of strategies but a mindset to be a successful trader only few have and eventually those few traders succeed to make big. Many of my students during the trading course ask me this question and we talk about it a lot with traders I mentor.
When we trade the markets we approach the markets each and every day with a psychological mindset or set of beliefs and emotions. New traders often enter trading with beliefs about trading and the markets that simply do not apply to the realities of trading. This is why new traders get into trades and can’t get out or don’t know when to take profits or get out at the bottom and get in at the top of markets. In other words they make bad trades because they are trading from inaccurate beliefs and become subject to their emotions of fear and greed.
With proper education, experience and direction these traders can turn their trading around. Usually new traders realize after awhile of experiencing large losses or working very hard and still losing that they need to change. What they thought would work does not and they recognize that their emotions are working against them and not for them in trading.
Once they get to this point, traders either quit trading or seek help to overcome their trading handicaps. If you find yourself at this point, you need to seek help from someone who is a successful trader. The help you get or don’t get at this time will seal your fate as a trader. We teach you the importance of controlling yourself when trading. We call this developing “The Trader’s Mindset” to think as a trader should and not become subject to your negative emotions. In order to be successful in trading, you must not fall prey to the very emotions you are trying to exploit. In short term trading when we win, someone must lose. This is a hard cold fact of short term trading! And the successful traders usually are calm and very methodical in their trading and making money from other traders who react emotionally to market events and are therefore losing money.
“The Trader’s Mindset” knows how emotions effect trading and learns how to deal or master their responses to their emotions as well as other trader’s emotions. So, how to we develop “The Trader’s Mindset”?
To begin with use stops and stick with them! By using stops you are getting out of the market on your terms before your emotions have a chance to cause you problems by staying in the trade too long and then getting out because you can’t stand another dollar of loss – which for example is usually the point where you possibly should be getting ready to enter your next trade. The profitable trader usually can calmly follow the market where ever it goes thus exploiting those traders getting out of the market on emotions.
There is nothing simple or painless about trading for a living.Its a competitive world out there. You have to compete with FII’s,DII’s, HNI’s , Operators, defeat other gladiators, and not get yourself killed in the process. How much should be your Stock Trading Capital
Here are a few ways to become a better trader and overcome your opponents.
- Face reality– Spend time analyzing what you do and do not have control over. Only then can you focus on the things you can personally affect.
You control your parameters for entries, exits, and position sizing, but you can’t control where the market moves, or the path it takes getting to your targeted price level.
You can’t control the sequence of your wins and losses, but you can control the size of your losses, and the time you spend being right or wrong in a trade.
Internal Audit- Take a hard look at yourself and find areas that need growth.
- Are you coming up short on education?
- Do you have a solid trading plan and a robust methodology, or are you making it up as you go along?
- Do you need to reach out to a more experienced trader for help or invest in more training materials?
- External Audit- The most important part of your environment is the people that share it with you. Having traders who understand what your life is like everyday, you need to have friends and family who support you and love you unconditionally. The best use of social media for traders is connecting with others that share your passion for trading and create value for each other.
Seek Inspiration– Look for people who have overcome adversity, in and out of the trading world.
Ed Seykota created amazing wealth for his clients and himself using old punch cards and archaic computer systems.
Alexander Elder lost a lot of trading capital before he broke through to trading success and went on to help others overcome their urge to gamble.
Paul Tudor Jones’ passion for trading took him from a cotton trade that almost ended his trading career to billionaire status.
Nicolas Darvas nearly lost all his trading capital before becoming a multimillionaire.
The most important thing to remember about adversity is that it is temporary. If you are determined, continue to better yourself, and embrace your own determination for success, you will prevail in the trading arena.