Mind Over Matter Trading

Mindset Over Matter? Emotional Torment, Fighting For Profits?

Posted on Posted in Psychology

How do you view the markets? I mean, if you were asked to describe trading metaphorically – what would you say?

I asked this question back in 2011 here. It still remains a fascinating topic to me. It’d be interesting to know how others view it, and at what stage they are in their trading journey…

Mind Over Matter

Is it really so important? I mean, if you have an edge(s) to consistently beat the market – why would your mental outlook matter so much.

Obviously you need an edgeBut if there’s one thing I have learnt about myself over the years it’s; most of my trading problems were created by myself.

In fact, knowing your personal traits and mind is 50% if not more of the entire edge. How often was an ‘edge’ the reason you got out too early, or late, did something impulsive, closed a profit before the move developed or second guessed a trade?

This is why the whole metaphorical view interests me. Those that instinctively describe trading as a fight or battle are having just that. Probably not what you wanted to hear if that’s you…

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On the Bright Side

You can change your outlook, when trading the markets it’s best to approach them with a sense of calmness. Many a bad decision was made in the heat of the moment. Intuition and experience count for a lot, but it’s important to embrace the uncertainty and simple fact that; there is risk. You just need to manage it effectively, while applying all that you know. Thinking like this (longer term) allows you to focus on the here and now, in the moment, quite calmly, resulting in doing the right thing.

Consistent application and preparation will lead to better thing. Intuition comes with experience, don’t rush!

When I originally asked the metaphor question on the link at the beginning of this post there were some interesting responses. Those that I know to be very profitable replied with metaphors such as:

Leon the fixer

Not a comparison to some blood-curdling battle from day-to-day. The emotional torment is self inflicted.

Aside from exhibiting a healthy mindset, it’s important to know what your edge(s) are. You’d be surprised to hear how many have the ability to make money, but don’t know exactly why. Knowing the characteristics of any particular edge huge. It’ll lead to finding more, and the ability to adapt when situations change.

Bonus Outcome..

This may not apply to all, but for me it’s a certainty. Trading has taught me much about myself, in the sense that monitoring my behaviour whilst trading has shown me my own character traits. You just cant ignore them if you’re to get far in the markets. Maybe not to others, but it helped me realise just how frustrated and impulsive I could be (early on). Having adapted and moulded my attitude to he needs of the market was a massive bonus outside of trading.

I’m not going to say it’s made me perfect, far from it. But it’s certainly made me more aware of my behaviour in any given situation, for me, a positive thing.

Being aware of myself also leaves a sense of confidence in decisions made, which funny enough, often leads to better decision making too!

Recent: £400 Bank Challenge (3 Days)

p.s. If you’ve a different metaphor for how you see trading and the markets, drop it in the comments below!

6 thoughts on “Mindset Over Matter? Emotional Torment, Fighting For Profits?

  1. I thing the most important thing is define an own winner strategy. It’s not easy and it can take a lot of time. Once you have this in your hands, will be more easy to dominate emotional side and keep self control. The second step is resist the temptations to escape from your strategy and learn to lead with high sums of money. Each step has it’s requirements.

  2. Its like the life and the weather, if it’s raining..protect yourself and use an umbrella, and when you see the sun starting to shine, take advantage from it and enjoy it the most you can!

  3. I’ve been doing daily practice for the last week. Admittedly in training mode. It’s taken me ages to get calm and focus on the process. I had two days where I traded 10 races with 95% success then the next day the markets seemed different somehow. Rather than fret about it, I took a step back, assessed that I need to be out of the market no less than 30 seconds to the off because I’m not intuitive yet but I’m starting to see trends and patterns. I keep hearing your words ‘focus on the process not the profits’

    When I tried last year, I was all over the place and was too emotional about whatever happened or didn’t. Now I feel calmly excited/confident that I can do this.

    Thanks Caan

  4. Self awareness is critical but having self control i personally struggle with at times, I’ve noticed a pattern with myself is that i trade very good for 3 to 4 weeks at a time then when something goes wrong or changes I sort of fall to pieces and i break all my rules and inevitably lose money, e.g. i did a month of trading using £10 stakes ended up £100 up and with a 71% win rate, started on £20 stakes and ended up trading rubbishly, also this month I had been successfully trading £20 stakes, even made £110 over a week and then had a load of grief of my ex missus went out drinking on a friday woke up saturday hungover and rough, started trading had a few bad trades, which put me £20 down, ended up going in play on a trade and lost £200 quid. You are correct Caan trading starts to teach you lots about yourself and behavioral patterns etc, the hard thing for me is breaking lifetime habits, e.g. impatience, fear of missing out, learning to say no if the conditions are not right etc.

  5. Interesting blog, Caan. My downfall is that I do a back bet (or a lay bet, depending on where I think the price is going) and let the market do the rest and then cash out with a small profit. The problem is when the price runs in the opposite direction and I’m sat there (Like the rabbit in the headlights analogy you’ve mention in your youtube clips) waiting for the price to come back to me…..and it doesn’t, resulting in my small accumulated profits being wiped out.

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