The paradox of trading is: the more you need to win, the more you will lose. Why? Because when you’re desperate for something, you’re actually thinking about the fact that you don’t have it, about the lack of it.
The way energy works is that it attracts like energy. So when you’re thinking about what you don’t have and feeling bad about it, you’re attracting more of it, i.e., you’re attracting the lack of success or lack of money, etc.
What it means is that trading is simply a big mirror of our inner-self, and our trading results are often a reflection of our thoughts and feelings. Since trading involves money—which is a powerful form of energy—it increases this reflection, and you find yourself not understanding how you did certain things or how you got yourself into certain situations.
The stress and pressure you may feel while trading magnify your emotions, your ego, your behavior patterns. Trading makes you face situations that you hardly encounter in day-to-day life. This is why it requires awareness and dedication to do whatever it takes in order to turn your trading around.
If fear takes over you after one or several losses, you will start doubting your trading methodology, hesitating before taking a trade, over-analyzing the charts, and eventually missing good trades one after the other, or taking profits too soon (leaving money on the table). You’ll lose—or never gain—faith in your trading edge, and thus never achieve consistent results.
Missing out on good opportunities, you will start feeling frustrated for not taking those missed trades, which will then make you take unplanned trades or jump the gun with early, impatient entries. Obviously, these trades will usually result in losses, feeding the vicious cycle of fear, hesitation and frustration.
So how can you break this vicious cycle?
1. Control Your Emotions
You can try to control your emotions, thoughts, and feelings, but your subconscious mind is much more powerful than your conscious mind. No matter how hard you try to convince yourself that everything’s OK, no matter how much you try to ignore your thoughts or feelings—if they’re there, they won’t just go away. In the war between your conscious mind and subconscious mind, the latter always wins.
In addition to the uselessness in trying to control your emotions, it is actually counter-productive. Your feelings and emotions are a terrific gauge for your mental conditions and your state of mind.
If you’re upset, panicked, tired, or not in focus – you should be aware of that before making any trading decisions. If you are in a state of euphoria, looking for revenge, or experiencing any of the four primary trading fears, you should first take the time to attend to your emotions, and only after you’ve reached the right state of mind, can you go back to the screens.
Bottom line: not only is it impossible to control your emotions, you should actually be aware of them, give room to what you’re feeling and thinking, and use them to your advantage.
2. See A Psychologist
There is nothing wrong with seeing a psychologist. In fact, it can help you with many other aspects of your life, such as various behavioral problems and negative emotions that rise in day-to-day situations – not only in trading.
Psychologically treating your subconscious fears and negative thought and behavior patterns can actually fix many of your trading problems, sometimes more quickly and more thoroughly than other methods.
There are a few great trading psychologists out there that can help you root out stubborn behavior patterns, or find the root causes for your fears and other destructive thought patterns.
If you feel like you need to approach your trading problem much more deeply, you may consult with a professional psychologist and see whether you can get help for the issues that you think are hindering your progress.
3. Develop A Winning Mentality
Instead of trying to control your emotions (to no avail) or see a psychologist, you can work on developing a winning mentality. As you can probably guess, this is my favorite approach. Trading mentality, more commonly referred to as trading psychology, refers to the emotions and mental states that dictate our success or failure in trading.
As I’ve mentioned earlier, I’m not against treating deep psychological issues that interfere with your trading or with other aspects of your life; quite the contrary. But what I like about the winning mentality approach is that it gives you a whole new skill set and a fresh approach to life. Not only will you be able to become the consistent trader you’ve always wanted to be, you will also acquire the tools to build your framework for success in any domain in life. You will do so by:
- Reinforcing new, positive thought patterns and behavior patterns
- Acquiring the habits of successful and persevering people
- Realizing that when you do whatever it takes, nothing can get in your way
In his post “The Winning Mentality: Do You Have It?”, Chomwa Shikati defines the winning mentality as follows:
‘The mentality that lets you dig deep and do whatever it takes in terms of putting in effort, perseverance, taking action and inspiring others around you in order to overcome any adversity that may come your way and win in the end. It is being willing to do consistently what everyone else is afraid of doing in order to gain a competitive advantage and master your craft in order for you to become a winner.’
My key takeaways from this definition are:
- Doing whatever it takes
- Having perseverance
- Taking action
- Mastering your craft
Those who have reached the top level in their domain—elite athletes or actors, highly-skilled physicians or artists, and top traders or investors—all have a winning mentality, and all think like a pro.
Are you willing to do whatever it takes to reach the highest levels of trading? Do you want to develop a winning mentality and achieve your goals in life? Do you want to master the craft of trading and become a consistently profitable trader? Then you need to take action.