Mental Training For Trading Success

By | July 10, 2021

In the heat of the markets it is your mental and emotional state that makes the real difference to your trading performance. If you take a moment to reflect on your own trading experience you can probably think of many examples of when your thoughts or your emotions got in the way of your trading performance, when you took actions that prior to, and in hindsight, you know you shouldn’t have done. It is my experience that in trading many traders often know what to do, but find that the real challenge is doing what they know; in following through consistently with their trading strategy.

Trading is a mentally and emotionally challenging activity and if you want to achieve success then it is important to identify your own unique ‘process of success’ – take a moment to consider what it takes for you to perform well in the markets – and then to condition it, to train yourself to focus on precisely what it takes to be successful, to develop the thoughts, feelings and behaviours that enable you to get your best possible results.

Practical exercises for managing emotional states, developing focus and conditioning positive trading behaviours

Before I start trading each day I do some mental training. 

STEP ONE: MEDITATION

I try to meditate at least twenty minutes a day, usually shortly after I awaken.

Here is what I do.

I simply sit down, slowly fold my long legs, and nearly close my eyes while
maintaining a posture that keeps my back fairly erect. Next, I breathe slowly and
deeply until I feel relaxed. When thoughts enter my mind, and they do, I do not
engage them but simply watch them go to and fro. Eventually they stop.
After all thoughts have ceased to arise in my mind, I just sit and do not focus on
anything. I try to do this for at least twenty minutes. It produces a very calm and
clear mind, something essential for focusing and being in the flow of the market.

As a beginner you will find thoughts popping in and out of your mind faster than
you can count. Do not fight them. Just see them float through as though you were
watching clouds. Try to focus upon your breath by counting exhalations. Iíll bet
that you canít count up to ten breaths before becoming distracted. Eventually
youíll get there. Do not become discouraged. Practice makes perfect. Just keep up
your practice. We disucss more stratergies in our Psychological and Performance Coaching

STEP TWO: VISUALIZATIONS

After I have prepared my mind, I try to visualize the many waves that occur during
the trading day. There are up waves, and there are down waves. My job is to ride
each wave as far as I can, no matter which direction. Basically I visualize a circle
of prices moving in one direction or another. I see myself getting on that wave and,
when it peaks or bottoms out, reversing and going with the next wave. I repeat this
over and over again. I see myself taking losses quickly and also see myself riding
winners for as long as possible. I try to do this for at least five minutes a day.
Sometimes I repeat this routine at night before I go to bed. I believe it works
because it cuts a neurological circuit that the brain is familiar with and thus can
evoke quickly when needed. It is just my theory. All I know is that it works.

STEP THREE: AFFIRMATIONS

Affirmations are messages to your unconscious that help produce a given result.
After I am donevisualizing, I repeat over and over again the following silently to
myself:

  • “I follow my trading rules.”

  • “I take every valid entry.”

  • “I stay with my winning trades.”

  • “I cut my losses right on time.”

  • “I act on time right on time.”

  • “I apply my methods to the market.”

  • “I want what the market wants.”

  • “I can handle anything that comes up.”

Affirmations are used to bring into being what Earl Nightingale calls the strangest secret: We become what we think about. When you affirm, you’re filling your mind with repetitive notions. They seep into your subconscious mind, and manifest themselves in your actions.

Basically, affirmations give you the opportunity to program your computer. In this
case it is your subconscious.

What I have briefly outlined takes about thirty minutes. Like any other professional
game player, you have to prepare yourself for your sport. In the trading game
preparation is mostly mental.

This powerful tool produces a  state of awareness that is perfect for the trading environment.

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