Trading MindSet
This section is so important that it could really do with a whole website dedicated to it, we simply can not stress enough that this can be the "Make or Break" of any Trader, however competent, resourceful or gifted he is at actual Trading itself.
IF you are not disciplined, and you can not take the TradePlan pain, then you will get C R U S H E D - Simple as pie. We are not professionals in the area of the MindSet and would not pretend to be able to teach anyone on this subject, it´s as much as we can do to keep ourselves under control whilst trading, all I can say is that is just takes some time to achieve (many years in my case) - I also have to say, it´s not a perfection either so do not expect it to be so, there will mistakes, lots of them, just take them in your stride and learn from them.
However strong we may be in our statements of how hard the Mindset game can be, it is certainly nothing to be afraid of. Your mind is the most powerful thing on the Earth and is capable of much more than you can possibly imagine - If you start moving in the right direction, you will indeed surprise yourself and see the power you hold within.
There are many resources on this subject and one which will stand you in good stead is based at www.thesecret.tv A great resource and an excellent way to start. I think personally I have always used the power of The Secret in my own life, in the early days without even knowing it - Many of the theories included help reinforce what I already thought - It helps in all sectors too, not just in Trading - It is not so much as a Trading Mindset as a Lifestyle Mindset, one which stands you in a very positive position for everything in life.
Some people will dismiss it as "hogwash, rubbish, horseshit" or whatever - that´s fine - Whatever you say, you can not refuse the power that The Secret shows every single one of us is capable of. Visualization is large part of this teaching, and is proven to be extremely powerful - It is also proven to have been used by many famous people, from Shakespeare to Einstein and more recently Michael Jordan and Arnold Schwarzenegger. In the world of Day Trading the MindSet is exceptionally important, and Larry Levin, a Professional Trader and member of the CME Group stresses this time after time. True, The Secret in itself is a massive marketing ploy which has made its producers very rich indeed, however the basic fundamentals of the Secret are long lasting tried and tested methods of getting your Mindset into the right frame of mind.
The Secret itself is a commercialized version of a very powerful and positive thinking process. If you want to dig a little deeper than the commercialized aspects then maybe a good idea to have a look at Napoleon Hill.
Many Traders use Visualization to their advantage, visualization is only a small part of The Secret, but it is an extremely powerful one. Not only can it give you a positive outlook when all is against you, it can also teach your mind the right way to deal with certain circumstances, circumstances which you will come across every Trading Day of your life.
Part of the Mindset routine should be to have a complete plan of how you are going to Trade. For this, without your own ideas, you will need Mentorship from someone who can point you in the right direction and give you Trading Rules - This is a must unless you have experience yourself and your own plan of attack.
A little Story.
I often speak to Traders who are depressed and negative, and they can even be at their wits end. They have been consistent at only one thing, and that is LOSING. They don´t know where to turn, they are searching for the way, they are looking for help with how to trade, they know its at their fingertips but they just can´t seem to get a break---- STOP right now. You must re-evaluate I tell them. In one case I was talking to a guy only a few weeks ago (Sept 2009), he was telling me how he had lost over 200k$ in the last year, and how it was crushing him more and more each day to even take a 1 TICK LOSS. This is CRAZY - He is never going to get out of this hole at this rate - I told him he needed to STOP trading immediately, to get a plan, to start again at the beginning, to get some confidence. He was digging his hole deeper and deeper each day otherwise, and there would be no way out. There will always be losses, it´s FACT, if you can not take a loss without being crushed then you are finished in your Trading, simple as- You must take the bad trades with the good trades, and learn to take losses - With him struggling to take a 1 tick loss in Futures (he was trading S&P) he is finished. His first steps to turn this around revolved solely within himself, he had to get a positive aspect, and he had to do it before he continued trading with real money, and when he went back to real money he had to do so in a small way, that the losses were not crippling for him - If your losses hurt, then in general you are trading too large positions for your mind to handle, this is a slippery slope my friends !
My point is that you MUST get your brain thinking the right way, the above is an extreme example and one we hope you never find yourself in - Just be aware!
The Secret - www.thesecret.tv - The Law of Attraction - Positive Mental Attitude.
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