Well, my idea of the 5 keys to a successful trader’s mindset certainly struck a chord last week…
Yes, I received a LOT of feedback.
So thank you so much to everyone that took the time and trouble to write in. I’ve heard all about the mindset issues you find personally challenging.
And I’ve also received some fantastic ideas for additional points to focus on when building your strong trader’s mind.
Like I said to one reader (and I’ll be telling you more about Kevin in a moment) I’d like this new online resource we’re working on to be fizzing with trader-to-trader interaction.
I’m picturing it as the meeting place of a trading-tribe. A true band of brothers (and sisters) ready to extend a hand and help each other…
And if your response to last week’s email is anything to go by, I’m sure the online portal I’ll soon be inviting you to join will quickly become a valuable resource for you (valuable, yet FREE. I must keep stressing that!).
Every mindset suggestion I received was valid!
So since trading mindset seems to be such a hot topic… and because so many of you laid your soul bare – telling me all about your trials and tribulations in the markets – I’m going to share my top 3 additional suggestions sent in by your fellow readers today.
And then I’ll tell you about a very special document indeed I received by email.
Now before we get started, let me assure you: every single idea or problem you told me about was totally valid.
We all have our own personal challenges and obstacles to overcome so there’s no right or wrong here. No one idea is any ‘better’ or ‘worse’ than another so please don’t feel overlooked or offended if you don’t see your idea contained in today’s eletter.
We’ll have plenty of time to spend together on your own individual challenges in just a few weeks time – that’s when I’ll be inviting you to join me in the new online trader’s area.
So for today, here are three reader’s ideas I thought would benefit almost all traders.
These are great insights, hard-won from first hand trading experience, and I’m sure they’ll give you food for thought.
1) Trust and confidence in your chosen strategy
‘V.K’ emailed me to say:
“I feel you must have complete trust/confidence in the chosen strategy in all market conditions so you can override those bad moments of doubt. Discipline will not help without belief in my book anyway“.
Trust and confidence in your approach is the foundation on which everything else can be built. But how do you achieve this trust and confidence in the first place?
Examining the historic performance of the strategy can help, but nothing beats first-hand experience to prove to yourself the approach is valid. Perhaps start out placing very small trades and commit to a totally mechanical campaign for a series of 30 or 40 trades.
Take every trade and treat the mini-campaign as your ‘due diligence’. Don’t worry whether you’re making or losing money (that’s why it’s important to trade small) the idea here is simply to get real-time feedback from the market. It will soon tell you if the strategy is one to fully deploy and you can then launch the new strategy at your normal size with added confidence.
Thanks for your great tip V.K!
2) Avoiding feeling overwhelmed
Jon emailed me with this one:
“I would say – how to avoid feeling overwhelmed and what to do if you are. If the markets go haywire I lose my internal map as to what is going on. I just exit and switch off until things quieten down. Ideally, I’d like to make money out of the volatility!”
This is another great insight from a trader out there in the trenches.
First of all, I would stress that standing aside is a trading decision in its own right.
It’s totally the right thing to do if the markets start flying all over the place and your original battle-plan goes out the window: You’ll be able to observe the action with greater objectivity when you don’t have your own position to worry about.
You can then wait for the dust to settle – until you see price action or a trading signal you do recognise – and jump on the opportunity.
And if you do want to start making yourself available to opportunities in unfamiliar market conditions choose just ONE new setup to look out for at a time and work with it until it becomes second nature. You then take on a new setup and build your portfolio of techniques one at a time.
Don’t fall for the trap of taking a high-level overview and trying to figure out why the market is moving fast and what it’s going to do next – sometimes, there’s no sense to be made!
Treat each new setup you follow as a mini-experiment. You should find the feeling of overwhelm doesn’t even get chance to raise its head when you keep your focus on one technique at a time.
Thanks for bringing this one up, Jon!
3) Be persistent
And Kevin gives us a good idea here:
“I think an add-on to the list of most important traits of a trader is PERSISTANCE – never give up on the nut until you crack it!
We have all entered trades that have turned and taken us out, and I guess the majority of traders push this aside and move on to look for another trade.
Why are you walking away and looking for another trade elsewhere?
What’s wrong with going again with the trade you have just been stopped out on?
If you have confidence in the method or strategy [there’s confidence making an appearance again!] there is nothing stopping you getting back in the same trade. And reaping the rewards”.
Thanks Kevin! I do think this is great way to approach longer term trades in particular. If the timing was slightly out on your first attempt at entry, it doesn’t mean the concept behind the whole trade was wrong.
If the market is still ‘fair game’ – if the criteria of a trade are still in place – there’s nothing at all to stop you re-entering. It would be an interesting exercise, actually, to go back over your journal of trades to see how many stopped-out trades actually went on to make good money.
You’d need a rule-based method of re-entering. It would run as a re-entry strategy working within the rules of your main strategy. But it would be intriguing to see what kind of profitable edge could be recycled and baked back into the system.
Any volunteers ready to investigate the effect this would have on their own campaign and share their findings?
So there are some fantastic tips three of your fellow readers kindly shared last week.
And then one further email really caught my attention…
‘Kevin S’ wrote to tell me about his recent ‘attitude-shift’ and how it’s changed his approach to trading.
It sounds like he’s made a major breakthrough and he puts it all down to rapid progress he’s made in the last few months (more progress than he’s previously made in the years he’s been trading).
How did he do it?
Simple – he collected as much information on ‘trading mindset’ as he could and boiled it all down to a set of ‘psychology of trading’ rules that he refers to 2 or 3 times a week. It keeps him on the right track with his trading and he’s ready to share his research with you too!
He’s pored over all the books and videos about traders and the psychology of trading and distilled the key points into a hard-hitting, straight to the point, document.
No waffle, just the key mindset points he’s found make all the difference. There’s a whole heap of valuable information in there but it’s perfectly possible to quickly read and absorb the crucial pointers every time you sit down to trade.
I’m certain all traders can benefit from keeping a copy of this mindset tool close to hand so I’ve invited Kevin to join me and kick-off your new trader’s forum by sharing his findings with you and he’s kindly agreed.
This is just the kind of trader-to-trader interaction I’ve been hoping for. Thanks again Kevin S!
Watch this space for further information on your FREE membership to the new trader’s resource – coming soon!
Be Prepared: Market Moving Data Coming This Week (London Time):
Wednesday 10th December 2014:
– no big reports
Thursday 11th December 2014:
13:30 USD Retail Sales
Friday 12th December 2014:
13:30 USD PPI
Monday 15th December 2014:
– no big reports
Tuesday 16th December 2014:
08:30 EUR German Manufacturing PMI
09:30 GBP CPI
10:00 EUR German ZEW Economic Sentiment
13:30 USD Building Permits
I hope you enjoyed reading about other trader’s ideas for strong mindset. Drop me an email rich if you have ideas of your own you’d like to share and don’t forget to keep an eye out for more details on your new ‘trader’s hub’ website – coming soon.