PMA, Positive Mental Attitude, Believe and Achieve; call it what you will, the power of positive thinking is a much-hyped concept that can often feel more than a little cliché. However, cut through the more woo-woo literature and you’d be surprised at the hard science backed mental and physical benefits a little attitude adjustment can have. Aside from just elevating your trading, the right mindset can give you a pretty decent confidence boost, improve your mood well above baseline and could even stop you developing serious stress-related illnesses further on in life.
What Do We Mean By A Positive Trading Mindset?
The mysteries of the mind are always a little tricky to standardise as they’re so ambiguous. Each of us is unique in their personality and physiological make-up; some of us are habitually happy-go-lucky whilst other are natural Gloomy Guses. Studies also suggest that we remember bad memories much easier and in higher definition than any good ones so even the most optimistic go-getter is fighting an uphill with negativity over time. Whilst it’s equally important not to get overconfident and reckless, quite often the only thing separating a winning trader from a losing trader can be their thought process, so here are 7 practical tricks to positively improve your trading mindset.
Start Your Trading Day The Positive Way
Have you ever missed your morning alarm, burnt your toast, spilled coffee on your shirt and made a bad trade first thing? Did you feel like your day got better from there? More times than not human emotion and sentiment can quickly snowball, almost imperceptivity. With our busy schedules it can be really tricky for a person to even become aware that their own mood has been impacted by negative experiences or emotions felt earlier in the day however the butterfly effect of waking up on the wrong side of bed can have powerful negative consequences, well after you’ve finished your second coffee, so ignore it at your peril. Now, it might feel silly at first (and looking into the mirror is VERY optional) but reminding yourself of some positive affirmations mid-commuter chaos or if you’re feeling stressed can be an effective way to right a bad morning. Skip the ‘Everything is perfect’ or “I’m an awesome person” prattle and try “I am confident in my strategy”, “I am a consistently profitable trader” & “I do not chase, I only trade when the opportunity presents itself”. You’ll be amazed at the effect this can have on your trades.
Concentrate On The Good
There’s no such thing as a perfect day; even the ones that get off to a flying start, somewhere along the line you’ll encounter a challenge or make a mistake. The question is what comes next? Are you going to let a little hiccup ruin everything that comes after or plough on and create more successes? When things go awry, try to focus on the possible benefits (no matter how small). Did you sleep through the Dax open and you’re angrily looking through the charts at the potential trades you missed? O well, now you feel well-rested and you might just have avoided some potential losses. Like in the parable of The Chinese Farmer, sometimes things that seem great at first can come around to bite you whilst terrible mistakes can sometimes bring great rewards later on. Try to focus on the positive and keep in mind that almost everything is “Maybe good…maybe bad”.
Find The Funny In The Bad
If you can’t laugh at yourself, then who CAN you laugh at? People who regularly poke fun at themselves exhibit greater levels of emotional well-being so try to laugh at your own mistakes. Laughing at your own embarrassment, rather than feeling threatened by it, relieves our nerves and allows us to reframe challenges. Many studies have also found that the positive emotions we receive from having a good chuckle allows us to be more flexible and creative in our thinking and more efficient at problem-solving/ So give it a go, you might occasionally get a good story to tell your friends too.
Treat Failed Trades As Lessons
No trader is perfect. No strategy is a sure-thing. You’re bound to have a trade go against you at some point in your week; if you’re doing risk management correctly then your losses won’t be anywhere near apocalyptic however that loss can impact your mindset going forward. Rather than focusing on what you lost, try to think about what you found. What did you do wrong? What patterns did you misinterpret? How much of what you did was right? What made you go off course? Turn your failure into a foundation course at the school of (hopefully not so) hard knocks.
Stay Grounded In The Present
Now. No, not then. Now. Not this afternoon. Not 30 minutes back. This. Exact. Moment. Most people spend half their time fretting over something bad that happened in the past and the other half worrying about something that probably won’t happen in the future. Rumination, the act of going over the same idea, situation, or choice, is commonly associated with depression. The loss you took is gone, obliterated by time, but you can still do a lot of damage to yourself obsessively thinking about the Shoulda Woulda Coulda. Don’t torture yourself needlessly; simply learn the lesson and move on. Inversely, how much time have you wasted planning for a situation that never occurred or imagining a scenario wildly blown out of realistic proportion. Trust your strategy, trust the process and most importantly trust yourself. Don’t get distracted by past or future trades, focus on the one you’re doing right this moment.
Surround Yourself With Positive People – Friends, Mentors and other student traders
You can’t choose your family but almost everyone else in your life is through choice. Trading College has different levels of student support, from mentors and coaches to peers, because we understand just how lonely and frustrating it can be staring at charts all day on your tod. A community of like-minded traders around you can work wonders for your outlook but also how quickly you can absorb the knowledge. If you’re not part of a training scheme, try out some online communities or look within your circle of friends for someone who might have an interest in the markets. Finding positive, supportive people is always a challenge but when you find them do your best to try to positively impact them and let their good vibes influence you in the same way.
We’re just scratching the surface of how you can fundamentally change your mental outlook (and your trading patterns) for the better but these are all simple little things that almost any trader can apply to their schedule. Why not try out a few and see what works best for you.
Treat your trading mindset like your starting capital and start making tiny, little investments that will offer positive and compounding returns for many years to come.
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