The Psychology Behind Trading - Establishing a Trading Mindset
If you do not have the right trading mindset you will fail. This is the most important thing you possess as a trader. The trading mindset is something you need to start working on right now even before you learn a trading strategy. A positive trading mindset will need to be continually improved and protected throughout your life as a trader.
Definition Of Mindset: The established set of attitudes and beliefs held by an individual.
Therefore we must have the exact set of attitudes and beliefs that will make us successful in trading.
Proof: Winning Trading Mindset is The Only Way
Successful trading is difficult and building the correct attitudes and beliefs is the way to develop the habits and skills necessary for profitable trading.
The reason is quite simple, there is always resistance to success in everything you do and trading is the same.
It doesn't matter what field you are in there will always be a bottom 10% a top 10% and the middle group. The ones that have the best mindset will rise to the top.
Identifying the Correct Attitudes and Beliefs
Here is a short list that I have found to be essential in my development of a good forex trading mindset. This is listed in the order of importance.
- Commitment: I believe that you must be committed to the task set before you and that you will not quit and that you will do anything that is necessary to accomplish your goal. That includes working and developing your mindset and not just your trading skills.
- Persistence: Becoming a profitable trader and maintaining a winning trading mindset is not going to be easy. Be ready for ups and downs and just keep moving forward and improving despite difficult times.
- Self- awareness: Self examination is critical to developing a successful winning mindset. The best way I have found is to not be judgmental, critical, or emotional when I find things I do wrong but rather acknowledge it then create an action plan to build out and improve my weaknesses.
- Performance Metrics: Build a list of performance metrics with goals to show whether you are growing or not. Analyze the results of your goal on a regular basis. Keep yourself accountable to analyze the results. This is where persistence comes in, be persistent in analyzing your performance metrics and implementing ways to improve.
- Positive Attitude: A positive attitude does not deny the truth by saying everything is great no matter what. A positive attitude is where if something is wrong you remain positive and try to fix it. You say yes I had a losing week or yes I didn’t follow my rules but I am confident I will do better next time. The opposite of this is negative attitude where people will find and attach blame for their problems and if they attach blame then they will not do the necessary steps required for self growth.
- Hunger: Not hunger for achievement but hunger for growth, a growth mindset will keep you on the path to continual improvement as long as I am growing as a person and as a trader I know that I will see financial improvement follow.
- Humility: Someone who has a winning trading mindset isn’t better than anyone else or smarter than anyone else. But understands that growing is challenging and we need to stay humble and keep learning or we will start to decline.
- Openness: It is so hard to share our faults especially those of us that are leading other people. If you are willing to share struggles and reach out for help then it keeps you growing. Some of our most greatest times of growth comes through some of the most painful circumstances. Everyone goes through those so we must be ready for them and share them.
Critical: The Battle is in Your Mind
Having a successful trading mindset alone will do nothing to Improve your trading results. You must combine the right mindset and then combine it with action.
I say that because I hear people say have a positive attitude and you will be great, but that isn't true, the truth is that the right mindset is the catalyst for growth. If you do not possess the correct attitude then you will never be able to go on your growth journey as a trader.
The attitude comes first then the actions follow, next comes results, then the cycle continues. Mindset; Actions; Results. I call that the traders growth cycle.
That is why I am writing this post because I want you to start that growth journey so that you can achieve anything and everything you want to achieve as a trader and to grow as a person.
How can you get started Building Your Trader's Mindset Now?
Read the list above, and start looking at yourself. And create a questionnaire and start writing it down on a piece of paper.
Ask yourself am I committed to the trading process including developing trading mindset? Then write down everything that comes to your mind about your level of commitment.
Continue going down the list above and write out the answer for each of those questions, this is could be the beginning of self awareness for many of you reading this article.
Take your time and go deep in understanding your traders mindset.
If you are honest with yourself you should be able to find many areas that you will need to improve on. This is a great first step to developing a successful trading mindset and becoming a successful trader. There are other mindset trading psychology resources available on the internet as well as many trading psychology books that can assist if you want to gather additional studies.
Once you get this part down, then you can start working on the strategy and tactics but I truly believe that the battle is in your mind and if you can’t win that battle, why bother trying to be a successful trader.
The mindset comes first and then you will begin to work on strategies, skills and tools. However the mindset is always there and will always be something that successful traders will be working on.
Winners Edge Trading Is Here To help You Build The Winning Trading Mindset.
If you have a real desire to be successful and you want to use this community to develop a successful forex trading mindset please go ahead and share your results of your deep dive in the comments below.
It will be help you grow as a trader and it will also be an inspiration to others that you would be vulnerable to share on a public platform.
I will also be responding to each comment to anyone who responds because I want to help you with your growth.
Take action today and begin working on your winning trading mindset.
Thank you for reading!
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