In the words of Frozen.

"People make bad choices when they're mad or sad or stressed...
But throw a little love their way and you'll bring out their best"

The 3 Pillars of Trading Success – Part 1

Have you ever asked yourself why it is that even though we live in a world with great resources at our fingertips, traders continue to struggle?

I mean, there is so much great quality information freely available on the internet, anything a trader needs to know in order to succeed, and yet the statistics still show that over 90% of traders have no trading results to show for.

I tell you why: Because you can want trading success until you are blue in the face, you can attend all the seminars, read all the trading books, refine your trading strategies, write the most sophisticated trading plans, follow the best traders in the world, you can accumulate so much knowledge about trading that you deserve an honorary PHD, but until you get to the core of your BEING, the real reason for your emotional trading experience, the real root cause of why you are not doing what you plan to do, until you are clear about your unconscious sabotaging behavioural patterns and the cues that trigger these, until you acknowledge that this is running your trading and learn how to transform them, your dream of being a successful trader is going to stay a fairy tale.

Let’s be real here, anytime you want to get to a place that is better than where you currently are, there are blocks inside of you, otherwise you would already be there. That is why, when profits do appear, it is exhilarating, but never long lasting.

So, the real question here is: How do you uncover and remove the hidden blocks to achieving better trading results?

Many traders measure their trading success by the state of their trading bank and deep down their confidence and self-worth is correlated to the $$$ profits they make.

This is not surprising, as this is how we have been conditioned by society. You get judged by the results that your environment can see, such as good grades at school, finishing top in your university, driving a nice car, living in a nice house, being dressed for success, all those are being considered as a measure of success.

They don't see what it really took to achieve those things, such as patience, integrity, courage, wisdom, humbleness,  grace. These traits are all coming from deep within your 'being', yet most traders try to 'do being patient and disciplined' with willpower. This is never sustainable! If it doesn't come effortlessly, there is something you need to shift inside of you. 

Only recently, with the work of the great Carol Dweck schools start to reward process focused behaviour in children, they are not rewarded for having a great outcome, but for having given their best, which in turn usually leads to a great outcome anyway.

Although $$$profits are still a typical measure of success in the trading industry (and undeniably important if you have to pay the mortgage from trading), this mindset can ultimately destroy your trading career.

It is what we call an ‘outcome focused mindset’, as you lose money, you lose confidence, your self-worth becomes threatened, you start making irrational trades based on impulse and desperation; now you lose more money in the attempt to recover your self-worth, and so the vicious cycle of self-sabotage has been set in motion.

If you want to stand any hope to succeed in the markets, you will need to change how you think and feel about yourself in the context of trading.

Most traders know that there is something wrong, but they don’t know how to fix it. They think they feel bad because they had a bad trade. But I would argue that they have ‘bad’ trades because they feel bad to begin with.

Of course, this is not a very popular approach, it is so much cooler to talk about behavioural finance, and neuro science and the latest research in how traders have similar behavioural trades like rats.

For me, there are three pillars to trading success: Trading psychology (who you are being), Trading Performance (what you are doing) and Behavioural Finance (how you are thinking).

Trading is a path of personal discovery. Like any performance sport it is a path to truly understand who you really are and who you have to become in order to achieve your trading goals and dreams.

I hope this is useful.

With a toast to your trading profits

Mandi

Prost

 

What Does It Take To Be A Professional Trader?

Trading is not just about entering and exiting a trade and making or losing money in between. There is so much more to it that I found most traders are not considering especially since preparation and record keeping are not being taken seriously by most traders. I found that often traders contacted me believing that they had some sort of psychological problem but often after a few questions it already became apparent that their focus was purely on the trade itself, rarely any time is spend on thorough pre- and post trade analysis and evaluation. This lack of professional approach often results in emotional issues such as lack of confidence, fear of failure, anxiety and even as far as depression.

Here are some key points that every serious trader must consider:

1. Do you have a pre-trading session routine?

  • Physical preparation: are you well rested, well fed, had enough water
  • Mental preparation: 'Getting Into The Zone': calming the mind, focus exercise, mental rehearsal
  • Market preparation: fundamental research and analysis, technical / chart analysis, announcements, political events

2. How well do you know yourself? Do you know what your Ideal Trading State (ITS) is?

  • Ask yourself: What is the difference between the times when you make excellent trading decisions compared to when you made poor trading decisions?
  • How do you react emotionally and intellectually to making money? How do you react to losing money? Why?

3. How are you organizing your trading session?

  • Do you have a step by step in logical order written down trading plan (checklist style) on your trading desk?
  • Do you have strategies to sustain your ITS during the trading session?
  • How well did you time your entry?
  • How well did you time your exit?
  • How was your mental state during the trade, where you anxious or composed?

4. What is your after trading routine to complete the trading session?

  • How do you ascertain how well you have done in your trading?
  • Do you measure the quality of your trading results such as the relationship between profitable, unprofitable and trades let passed?
  • Do you measure the level of your focus, confidence, patience and discipline during the trade?
  • In a nutshell, do you perform an emotional and performance analysis (metrics) on a daily basis to ascertain what you have done well and what you can improve on?

 

Don’t Quit!

Don't Quit!
When things go wrong, as they sometimes will,
When the road you're trudging seems all uphill,
When funds are low and the debts are high,
And you want to smile but you have to sigh,
When care is pressing you down a bit,
Rest if you must, but don't you quit.
Life is queer with its twists and turns,
As every one of us sometimes learns,
And many a failure turns about,
When he might have won if he'd stuck it out.
Don't give up, though the pace seems slow -
You may succeed with another blow.
Often the goal is nearer than
It seems to a faint and faltering man;
Often the struggler has given up
When he might have captured the victor's cup,
And he learned too late, when the night slipped down,
How close he was to the golden crown.
Success is failure turned inside out -
The silver tint of the clouds of doubt,
And you never can tell how close you are -
It may be near when it seems afar;
So stick to the fight when you're hardest hit -
It's when things seem worst that you mustn't quit.
(I found that somewhere on the Internet and unfortunately can't remember where from - Author Unknown)

What Makes A Great Trader?

Excerpt from http://news.yahoo.com/fx-traders-seek-coaching-battle-dominance-080909184.html By Nia Williams | Reuters – Sun, Sep 30, 2012

 ..."Most traders and coaches agreed the most important attribute for making money in financial markets is self-confidence. Along with discipline and a clear process, it can help traders run profitable bets and cut quickly out of losses.

Without it traders may start second-guessing decisions, doubting their instincts and over-reaching for trades, said Graham Davidson, director of FX trading at National Australia Bank. He had a period of coaching around six months ago after slipping into bad habits that led to a 12- to 18-month "rough patch".

"We talked about all kinds of stuff. It was mostly trading-centric but equally you have to be able to look inside yourself and figure out what motivates you," Davidson said. "If you understand your subconscious and what the drivers of your behavior are you can become a better trader."