Table of Contents
The Mindset Shift
Trading is 80% psychology and 20% Technical. If you haven’t heard that you are welcome! I can confidently say that after 4+ years of trading, my trading strategy was not the issue, it was my psychology when it came to making money in the market. So where exactly do you start with changing you mindset?
With information being so accessible on our phones and the amount of information we take in on social media, its fair to say we have our Real Environment and our Digital Environment.
It is not your environment, it is you- the quality of your mind, the integrity of your soul and the determination of your will that will decide your future and shape your life.
Real Environment - This is the hardest environment to change. In our real environment, there are numerous factors that come into play that can hinder our mindset and prevent us from taking the right steps towards our goals.
Being lackadaisical
Finding too much comfort in your home/ room
Making excuses to deal with instant gratification
Friends or family that are not supportive
Living in the same town that does not promote growth
Having the same group of friends that do not want to change
A daily routine that does not support your goal
Going out every weekend
Over drinking at events
Not being able to say no to events that pull you away from your goal.
Staying up late very night that does not involve taking action towards your goal.
Digital Environment - This environment is quite easy to change. First, check your phone and find out how much daily screen time you have. If your over 10+ hours, you have to ask yourself: Was any of that useful information to make my day 1% closer to my goal? If yes, skip to the next section. If no, continue reading…
Not a worry if you answered no, I was in the same boat. The one thing that helped me was creating a separate Social account that only focused on trading and i had to disassociate myself from all the funny viral reels and thirst traps that were on my original account.
Only follow accounts that will give you inspiration and tips to obtain your goal.
If you get caught into the IG algo of things not related to trading, make sure to let IG know you don’t want to see that content.
It may not seem like much but trus! This small action will be the butterfly effect that will set all other steps to get to your goal in motion. The faster you overcome your mindset the quicker you will see your profits.
Think Long Term Not Short Term
Easier said than done, and that’s a fact! But once you understand that trading is going to be the vehicle that will take you from point A to point B, you will enjoy the journey and its obstacles along the way. Allowing yourself to be the “life long student” will allow you to build unshakable habits that will reinforce yourself as a trader/ entrepreneur and shaping the mindset to achieve “Unlimited Access“.
Long-term strategies can lead to more stable and better financial results. By focusing on being better 1% everyday, you are able to focus on smaller more realistic achievements that will bring you closer to your goal. Most people set large goals with no plan and the moment they run into a wall they’ll give up. Aligning your trading with long-term goals makes your trading experience more satisfying and less stressful. This Long term thinking is key to ongoing development, leading to a more fulfilling life. Like any muscle it will need training before it becomes second nature. Here are a few actions to take now:
Create the vision board for visualization
Add monthly goals
Then add smaller achievable milestones to get to the goal for that month.
If you don’t hit that month, be sure to be consistent and carry it over into the next month.
I use Motion, as my goal tracker and daily scheduler. I was skeptical at first, but since using it, has definitely increased my productivity so much.
The most important thing about a vision board is ACCOUNTABILITY
The number one person you should never fail is yourself
If you set your mind on doing something, DO IT!
If you don’t, you build sh*tty habits that will snow ball into much worse habits.
Trading Psychology
Trading is 80% psychology and 20% Technical. One cannot understand that until they are in the trenches with everyone. The emotional impact on decision making is vital to the success of a trader. Here is a list of actions most traders undergo when they THINK they have mentally prepared for for the markets:
Overtrading (My Favorite) - If your not a scalper, then you shouldn’t be taking 20+ trades in one hour lol
FOMO - Fear of missing out, chart watching or seeing other trader make a profit and you try to jump in without analysis.
Revenge Trading - Taking trades to make up for past losses.
Over Leveraging - This is when you go all in and risk your whole account on a trade you’re not 100% about, hoping you’ll profit.
Greed - Not taking any profit and then you let price come back to your entry to make only .01% of your account or it hits your SL.
Fear of Losing - Thinking about your past losses or not knowing enough to come up with a bias in the market.
Lack of Discipline - not following your trading rule because of of the actions above.
The list can go on…… 😮💨
Emotions significantly influence our decision-making in trading, so recognizing and managing them is crucial for making rational choices. The trading environment can trigger emotions like ego, fear, greed, and anxiety, and learning to identify these triggers allows us to use them as tools rather than obstacles. By viewing emotions as valuable data points, we can improve our decision-making and guide our actions effectively. It’s important to evaluate whether a feeling is market-driven or influenced by personal biases. Anticipating future emotions before making trades helps prepare for different scenarios and ensures balanced reactions to market changes. Ultimately, self-awareness and understanding emotional patterns are key to turning potential vulnerabilities into strengths in trading.
The Lone Road
Nailing your emotions in trading is a long tough road. Everyone will have their own battles because we all have different personalities and environments to overcome. Think of the road like the Autobahn in Germany. Some will full throttle and others will drive the safe speed limit. At the end of the day were all getting to the same destination of becoming consistently profitable.
One way to approach this road is through discipline, both on and off the charts. No discipline in your real life will cause slippage into your trading discipline causing numerous blown accounts and a lot of emotional pain that can be avoided.
Trade with logic rather than emotion by keeping emotions in check to prevent clouded judgment and prioritize logic and risk assessment before every trade. Always know the risk by setting stop-loss orders and managing position sizes to protect your capital. Enhance accuracy by seeking multiple confirmations, using at least two indicators or your signals before trading. Stay engaged and present by maintaining focus on market movements in a distraction-free environment to spot the best opportunities. Dedicate time to understanding the market to make strategic and informed trading decisions.
The Plan
By Failing to prepare, you are preparing to fail
Documenting your trades will expedite your success in overcoming your emotions. I played victim to this and it probably added 1-2 years of pain before i gave in and started journaling. The moment i started journaling I was winning more trade that exact month!! Here are a few reasons you should journal your trades:
The smallest act of record keeping is of greater value than the loftiest intention
It reminds you of your trading plan and the rules to follow.
Times to trade.
your entries you should be looking for.
What NOT to trade the market does not show you good set ups.
You find the clear distinctions from lucky and and intentional profits
Good profits come from following your trading plan.
The lucky profits come from entering a trade that came out on top but did not meet you plans instructions
This is bad because it’ll lead to bad habits of breaking your trading plan rules.
If you’re interested in how to set a trading plan up check out this post!
🥛Don Leche’s Takeaways 🥛
Though it can be a pretty rough journey, it is one that it most fruitful once you are aware of all emotions when you trade. Journaling is just as important as taking the trade and profiting. Obviously there will come a time where you may not need to journal anymore, but in order to get there, journaling needs to be second nature. Remember everyone will have their own battles to face to overcome their psychology, so do NOT try to compare your journey to those who paid their dues in trading. Your time will come!