This week I seem to have received a flurry of emails from quite a few different people asking similar things, although they are not directly about this topic when reading their email’s it’s something I can see quite clearly is the issue.
Seeing it’s one of my favourite topics I didn’t think it would hurt to post up about it! (i’ll try not to ramble!)
You probably wouldn’t realise it’s something so close to my heart unless you’re a long time reader anyhow.
The Mindset or a trader –
In my experience it is evident that trading, be it Betting Exchanges or other markets attracts a certain crowd of people probably due to the very nature of what we are doing.
This ‘niche’ group of people seems to be rather select. In general they are already successful people, or even if they are not yet successful exhibit all the qualities and outlooks of that kind of person.
In my time I have made my email address public I have heard from many different types of people. Doctors to Property developers, Financial traders to Self employed Carpenters and Taxi drivers. Irrelevant of their income or success they all have one thing in common.
They are self motivated, driven individuals that have had success. In short they are used to being right one way or another. Adversely not all that many have come from working on the minimum wage at McDonald’s as far as I know! I know your probably thinking I did, but that was some years ago now so I think my outlook has changed since then. If anything it’s evidence that even the average bloke can make it and you don’t need some fancy track record or qualification.
What im getting at here is these type of people who attempt have a massive asset on their side as they are likely to strive on against the face of uncertainty until hopefully they achieve. However they are also more likely to have a rather large downfall in the sense that they are used to getting it right, mentally while trading that is usually a hard one to stomach especially if you’ve been very successful!
Learning to lose occasionally is quite a difficult thing, or learning to be wrong is another way you could put it. Even if it’s something you don’t like to admit on the surface it’s just something that just has to happen daily.
Is it something that’s possible to overcome? Yes.
I believe there are several things that contribute to being a successful trader and being able to trade at the top of your ability for prolonged periods.
Understanding – of the situation, this clearly is the point that most people focus on. And quite rightly so, if you don’t understand the markets its going to be even tougher to profit from them.
Understanding – of yourself as an individual. This is the bit im really on about here, its by far the most underestimated factor. In fact I think it probably accounts for nearly half the problems people face.
It can take time, for some its more of a problem than others but the moment you realise it is the issue and you start to be very self-aware things are more likely to change. Knowing what makes you tick, what makes you emotionally attached when trading, knowing what keeps you focused are all things that believe it or not make a massive difference at the end of a day let alone a week or month!
Confidence – in what you’re trying to achieve is possible. Obviously expectations need to be realistic and having no expectations is probably likely to relieve pressure thus increasing confidence naturally. It often follows after you have the first two points in check.
What to do about it?
First off I’d advise getting a bit of paper and just making some simple notes, not so much about the markets but more about how you’re feeling. Before you start just jot down a line or two about how you are feeling before you commence trading for example…
“Had a really stressful afternoon, car broke down on the way home from work. Frustrated because I’ve lost an hours worth of trading time”
If something significant happens when trading, make a note aswell. Do the same after you have finished youre trading activity for the day. For example…
“Had a cracking afternoon, some smooth results although I felt rather relaxed probably because I went for a run this morning”
This little exercise is quite powerful if you manage to use it correctly, try not to write down everything as it will lose its effect much like not writing enough.
By writing this down you’re making yourself so much more aware of how your feelings are influencing your trading, by being aware you will already start to kick the bad habits or not doing certain things when you’re not in the right frame of mind and allowing that confidence to grow when you get it right!
You won’t be able to ignore or forget it if it’s written down! Also its likely you will start to notice a bit of a pattern between days notes, on the days you are frustrated, wound up, in a rush, not feeling good in general or even worse angry you’ll perform worse. On the flip side the days your relaxed, calm and focused you’ll perform better!
This is also one of the reasons I’ve taken up running more often! Here’s some new jazzy trainers I recently bought, the way I see it they pay for themself when I get to the afternoon after a mornings run I’ll be performing so much better! (works for me!)