You are the reason for your trading success and also the reason why its going wrong.

 


 

I think, when it comes to improved trading performance, we are all aware of how important the right mindset is. However, sometimes we are so stressed about a losing streak, or missing a trade, that we forget and slip into a weak mindset over time. Maybe this will help get you back on track.

 When it comes to mindset, there are three steps required to reach self-mastery and success in the markets

One.“Things happen to me”.

This is the victim mindset, the lowest level of self-mastery, and usually coincides with a negative attitude or even depression. The belief that you are the victim of your circumstances.

Do you ever think that the market specifically targets your stops. Or do you believe that every time you go long the market drops. This fatalist outlook is self defeating and wrong. The market doesn't care about your positions. Your beliefs that bad things happen to you or that you are an unlucky person is hurting your trading. Drop the victim mentality.

Two.“Things happen by me”.

This is where we become a “non-victim”. Take ownership of your decisions and their outcomes. Your performance (or lack thereof) is your responsibility now. Moving to this step will allow you to be far more successful. You are no longer a victim of your circumstance. As the final line in the famous William Ernest Henley poem "Invictus" states: “I am the master of my fate, I am the captain of my soul.”

Read the full poem here

If you make a losing trade, override your trading rules or receive a margin call, its your fault. Its not the market, or the broker or the Fed. Traders at this level take an objective look at the markets and analyze each trade for what it was. They take time to work on their trading and learn from their mistakes. 

 Three.“Things happen through me”.

The awakening.

You've all seen the stats regarding how few traders are profitable. Is it 70% lose money, or 80%? Some say its as high as 90%. This is because only a small fraction of traders ever reach the level of consciousness required. This level is what separates the trading legends from the rest.

Becoming one with your environment and living in the moment is the next step and the key to elite trading performance. Very few traders reach this level of consciousness, but it is possible.  Sports stars speak about this as being “at one…” or “in a state of flow”. The awakening is where you perform at your best regardless of what is happening around you and regardless of what others say. This is a much more difficult concept to understand and to achieve. However, in all performance activities, there are examples of people achieving this state. Think Amadeus Mozart or Leo Tolstoy or even Dan Carter or Roger Federer. Once you reach this mindset, you will be an elite performer. The best traders of all time share this trait. Traders like Ed Seykota and Larry Williams are excellent examples.

To start this journey of higher consciousness in trading, we need to first test our beliefs about ourselves. 

 Read my previous blog post on testing your beliefs.

 Get rid of any beliefs that are harmful to you. Examples of trading beliefs include; the markets are rigged, trading is easy, stop losses don't work, nobody ever went broke taking a profit, this market can't go up forever, all brokers are corrupt, the world economy is doomed etc.. 

Make a list of your beliefs about markets (aim for at least 15), test your beliefs and then decide if the beliefs are useful.

If it's not useful, get rid of it.

It will take some time, but once you have eliminated all untrue beliefs from your trading, then you can start working towards long term profitability. Here are a few things to keep you on track while you do this:

 

  • Journal all of your trades. I take a screenshot of each trade idea. I add some comments and annotations and save it to a folder. Add some comments about your feelings and beliefs. This will be helpful when assessing your beliefs about markets. Everyday I review these journal entries before I start trading which reminds me of what pitfalls to avoid and what set-ups are working well. Find a method that works for you. Consistency is more important than complexity.
  • Build a rock solid risk management system, so that you don't blow up your account. How much are you risking per trade? What is your win/loss ratio? Get these components in place to avoid getting wiped out.
  • Take care of your health. Sleep, nutrition, exercise and mental health are all key to long term success. What is your weak area? Work on that.
     

Having a negative attitude and a “things happen to me” belief is an indication of a very low level of consciousness. We all need to strive towards a higher level of consciousness to become more fulfilled and successful in trading.

To achieve success in your performance, move from step one to step three over time because you are the reason why you are successful.

Justin

P.S. Feel free to reach out to me if you need some guidance regarding reaching a higher level of consciousness in your trading.

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