Creating a super cool trading mindset – it doesn’t sound too hard.
But there is more to it than meets the eye.
Our article today is on creating a focused trading mindset as this is the path which ultimately leads to success.
WHAT IS SUPER COOL MINDSET?
A super cool trading mindset is when the trader is fully focused and engaged on the implementation of their trading business plan, their trade plan and trading skills. The trader is not worried about making the right and most profitable choices, but about making the right decisions in the realm of their plans.
Another phrase which is often used is the successful mindset. This article is naming it a “super cool” mindset, because ultimately a cool or focused state of mind is what leads to that success.
First question is: how do you recognize whether you have a super cool mindset in trading?
We have created 10 related questions that can help you with understanding your current state of the trading mindset. Obviously, many more questions could be asked, but this provides a rough idea.
- Are you trying to make the most profitable decisions each time (instead of focusing on implementation of the trading plan)?
- Do you feel nervous during analysis or trading?
- Do you feel insecure if you are not in the market or if takes too long before entering a trade?
- Do you make (or feel the need to make) impulsive decisions that are not based on your trading plan?
- Do you notice that you are missing clues during the day and only picking up on them after the trading day?
- Are you more worried about making the best choices instead of following the trading plan?
- Do you feel excitement when entering or exiting a trade?
- Do you often analyze how much you could have made, or reminisce about missed opportunities?
- Does looking at price action make you nervous, greedy, or fearful?
- Do you not write down evaluations and review trade statistics?
All the questions that have been answered with NO would match the super cool trading mindset answers. Basically, the more questions answered with NO, the better it is for the progress of one’s trading mindset. There is no reason to cheat; the answer is only a rough guideline and is intended to provide an idea for each trader.
Traders with a super cool mindset do not seek validation from the market, nor do they care about being right or wrong. They see the market as a place of opportunity and observe price action and their tools/indicators closely without any bias or judgment.
They do not allow emotions to cloud their decision making process but keep the flow of information open. They show a well-balanced dose of patience and alertness. They accept their wins and their losses. They calmly evaluate the market and implement their trading plan, without the emotional roller coaster.
The obvious benefit of the super cool mindset is that traders are able to fully focus on what they are supposed to be doing: trading. They do not get distracted by the emotions and moods, and keep their eyes always on the information that price is providing without preconception what the market must or should do.
HOW TO CREATE ONE
The last yet crucial component of our post today is: how do we create a super cool mindset?
First of all, the mindset does not appear from one day to another. It takes time to cultivate and improve it. As with anything in life, the goal requires a step by step, dedicated and committed approach to learning the markets and trading. That is why having a realistic time frame for reaching the goal of a super cool mindset is crucial (see more here about SMART goals).
Second, only risk capital that is acceptable to lose in its entirety. Obviously the goal is to avoid losing the entire trading capital, but the point is to find a level that does not create a mental block. At all costs, traders should avoid the mistake that risk leads to fear.
Third, it is important to keep your trading capital intact, which means avoid over-risking at all times and keeping the risk small until you feel fully comfortable with their trading plan (and feel like a fish in the water).
Fourth, work on the game plan rigorously. Or let us do the work for you.
Fifth, focus on learning the market structure and interpreting the price action, tools and indicators without a bias. The market is communicating and sending messages via price movements, so learn to understand it without getting emotionally imbalanced.
Sixth, keep track and record of your emotions during the trading day. Write down what emotions you feel at what stage of trading (analyzing, hunting for trades, entering, trade management, exiting) and what movements or action is causing the emotions. This method makes it easier to analyze what can be improved to match strategy and trading psychology closer to each other. Generally speaking staying calm and alert is the best combination.
Seven, keep your focus on implementing the trading plan and keep record of it. Read more here.
Eight, set yourself clear boundaries when you would stop the trading activities for the day if you are unsuccessfully implementing your trading plan or becoming too emotional.
Nine, find a trading buddy / partner that helps with monitoring the above 8 points.
Ten, remove as many distractions as possible during the process (analyzing, hunting for trades, entering, trade management, exiting) as possible.
Here is a summary: traders need to accept the market, understand the opportunity it provides, approach it without bias, be open to understanding its signals, avoid being uncomfortable with the chosen risk and yet be willing to risk within their risk parameters, and be clearly focused without distractions.
Remember you do not control the market; only the trading plan and the implementation of the plan are elements within our reach.
It is key to realize that the market has its moments of insecurity and emotions (this drives price), but that does not mean that we should follow suit.
Be respectful of the market, but confident of ourselves and you should be trading better and better by the month, year and decade.
What is your experience with creating a focused mindset? We would love to hear from you.
Thanks for reading and sharing this post. Wish you Happy Trading!
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