So its been just over a year since I started this blog and one of the first topics I started to delve into initially was mindset. It started after reading Mark Douglas’s trading in the zone a couple of times.
A year later and I think its something I need to evolve and develop a little more.
As almost anyone with some trading experience will realise, and if they don’t they really should! having the correct frame of mind and behavioral traits and impulses is the difference between winning and losing as well as winning and winning big!
It’s so easy to be in a good position and still loose as well as being in a losing position and still break even or even profit. The one thing it comes down to ultimately is US and how we behave, which is obviously driven by how we feel and react to a certain set of circumstances. When you look at it like that its no wonder the guys that have been doing this year are far better than those who have just started out, chances are some of their methods may be the same and they may not even have far superior knowledge but the difference is they just ‘do the right thing’ in any set of circumstances through tireless hours of screen time and making those mistakes again and again.
The good news is its not just a case of making lots of mistakes before you can get better, however, I do think it’s important to make a conscious effort to spot what your doing in your own behavioral traits whilst trading as well as the effect the environment is having on you at that point in time. From there onwards its just a case of picking out the counterproductive issues and replacing them with the more productive… this reminds me of a quote ‘Jimrobo’ pointed out to me very early on when I started on the geeks toy forum when he said something like the full-time traders are creatures of habit that like to do things often each day in a certain sequence before they trade etc, I know of one that likes to meditate…. suppose the point he was making is its important to have the correct environment to operate in and make sure your in a mindset conducive to trading success!…. only took me 18 months to get what he meant fully haha.
Thinking about it along my journey so far many wise ‘pro’ traders have offered words of wisdom and advice on their way and the one thing they have in common is they all come from a similar attitude which in turn obviously feeds their mindset and behavioral patterns towards trading… hope they don’t mind if any are reading but here are a few that always rattle through my head from various individuals, (as I remember them but you should get the idea)…..
“you’ve got to look at the bigger picture and go more long term, short term results are not important” – Millionaire Fund
“making small money is not boring for me. When has making money ever been boring?” – Leonthefixer
“take your time, being patient often works out better” – bazbaz
This sort of attitude is all part of the success, in my opinion, I have pondered on it a lot and it’s not just these comments but also what the successful individuals tend to say. Its always a positive, optimistic grateful attitude they seem to have.
I was left thinking about this and the way these people are after a conversation with my father not so long ago on the phone, he is in the last stages of studying psychology and its often good to bounce ideas about the way I feel trading off him even if he doesn’t get it fully!
It’s just like successful people in all walks of life, the ones that are often most successful are the ones that do it for the right reasons, perhaps not purely to make money but because they enjoy what they’re doing? a good example might be Warren Buffet worth $59 billion but still, he doesn’t live in a ridiculous mansion and drive about in a Ferrari… I’ve just ordered his biography so ill let you know how that goes.
I think the cycle I talk of in the previous post is linked to a distinct lack of gratitude, a trait within me, it’s almost like I switch between states. I can relate it to playing computer games as a youngster… at first I would take a period of time to learn and understand everything and the best ways to get around problems and win, then once I reached a level of winning all the time the ego would come out! in trading through this don’t work particularly and is counterproductive, a stumbling block to say the least. The difference being with a computer game you can always turn it off and start again so it has no effect on you, however with trading it’s not quite the same when you’ve just blown £130 in one race… so, for now, I know of a couple of little areas I can start to work on! mid last year I was working on some techniques to get me into the right place mentally before and whilst I traded, I think it will be a good idea to revisit them and possibly build on them as they worked for me before… I just stopped doing them when I was making good cash…… typical!!
The other thing to remember is the markets are constantly changing month on month and do not accept and remember that at certain points in the year can be unhealthy for your trading mindset, particularly this month and next. Simply there is not as much flow in the markets so it can be a little more tricky…. if you’re having a hard time of late give yourself a little bit of leeway as Cheltenham is on the not too distant horizon!