Are you ready to stop toying around and start making a serious attempt at trading profitably? If you want to trade with the big boys you will have to act like a big boy and stop behaving like a child in the market. That’s right, today’s lesson is a no-holds-barred in-your-face mother-load of brutal honesty that only yours truly would dare serve up, and I’m serving it up ice cold with zero apologies, because you NEED to hear this if you want to WIN!
It’s time to get your sh!t together if you want to compete with the big boys of the trading world. There is absolutely no other route to trading success other than taking a cold hard look at yourself in the mirror and deciding if your current trading behavior and mental processes are pushing you in the right or wrong direction.
I’m not saying you have to be Superman, you’re only human, but to make it as a trader you ARE going to HAVE TO step things up a notch by thinking and operating in a more efficient, pro-success manner. Clearly, what you have been doing has probably not been working or you wouldn’t be reading this article most likely. So, if you continue to do the same things and are just too lazy to figure out the problem and fix it, you have only yourself to blame for your failures (in trading or other areas of life as well).
Mental fortitude is defined as the ability to focus on and execute solutions when in the face of uncertainty or adversity. Ask yourself this, in what other field is there as much uncertainty or adversity than in trading? Hard to think of any besides being in an active combat zone in a war.
If you hope to make money as a trader on a regular basis, you have to have the mental fortitude of an Oak tree; unwavering discipline in the face of the near constant temptation and uncertainty that IS the market.
- Emotional discipline – If you want to succeed at trading you have to be emotionally disciplined. What this means is, you cannot chase every single ‘rabbit’ you see. You have to wait, wait and wait some more for the slow, weak, easy trading prey. This is called conserving your limited risk capital for the high-quality trade setups. What does it take to be emotionally disciplined? Mental fortitude. You must have the ability to focus on and execute your trading plan with MILITARY PRECISION even in the face of constant temptation.
- Survival of the fittest? – Is trading only for the genetically gifted in discipline and mental fortitude? Whilst some people may have an easier time with this than others, I truly believe anyone, if they want it enough, can develop the mental tools needed to become a consistently profitable trader. To read more about becoming a consistent trader, check out my article on consistency in trading.
- Money discipline – Not only do you need to be disciplined with your trading plan and trading strategy, you MUST be disciplined when it comes to money management and this means discipline in both risk and reward. To understand how to be disciplined in managing risk, check out this article on how to trade with discipline. For more info on managing rewards and profit targets, check out this lesson on the psychology of taking profits.
State of Mind
Your state of mind, even when you are not in front of the charts or thinking about the markets, plays an absolutely critical role in your ability to successfully trade the markets.
- Self control – Similar to what we discussed above about discipline, but what I’m talking about here is more of a general sense of self-control. Typically, people who have high levels of self-control in other areas of their lives, make good traders. If you are someone who is very disorganized, physically very out of shape or otherwise lacking in major forms of self-control, you will need to fix this if you want to make money trading. It’s very difficult to ONLY be a highly controlled person in trading if you aren’t controlled in other areas as well.
- Self-confidence – Anyone who knows me personally knows I am a VERY confident person. You have to be this way to make money as a trader. There is no room for self-doubt and hesitation in the markets. To learn more about this, read about the role that confidence plays in trading. You must act like you’re already a winner and think and behave like a hedge fund trader even though you’re not yet there. This is the only way to ever get there!
- Be counter-intuitive – You have to train yourself to be someone who thinks counter-intuitively. What that means is, basically you have to think different from the masses of traders who fail, from the “herd” of sheep, so to speak. When a market looks like it wants to breakout, it’s likely to be a false breakout, but most traders get sucked into the first breakout they see, only to get stopped out as the false break materializes. This is just one of many, many examples where a market looks and even ‘feels’ like it’s going one way, and just when everyone is onboard it reverses sharply the other direction. I’m not saying you will always avoid losing trades, not by a long shot. I’m saying you should be patient, have a trading plan, don’t jump the gun.