Secrets to successful trading – it’s all in the mind

It’s all in the mind

This secrets to successful trading series will help you to master the mental aspects of trading and put you in a position to compete and win at the trading game.

95% of home based traders lose money. I want to change that statistic.

Most people lose money in trading because they are not prepared mentally to trade. We compete against computers and consummate professionals. They do not suffer from mental aberrations. They judge, they see opportunities and they execute. In order to compete successfully with them we must think, operate and behave in the same way.

In trading we must see ourselves as a manager of probability. We must trade as we would run a business. We must get to know how we communicate with ourselves and how to change our thinking when necessary in order to make the right decisions at the right time.

We must rehearse good habits, we must mentally rehearse trading our trading system, we must rehearse taking losses, we must rehearse being disciplined. We must have positive and realistic goals and objectives for our trading.

These are the things that I am going to help you with in this series of videos.

The psychology in trading

Trading isn’t about being right. It isn’t about getting it right every trade. It is about seeing what we think is an opportunity (right context and good signal) and then waiting to see if other people agree.

If we are nervous when we are in trades we must realise that we might have been be right and we might be wrong. That is trading. We must accept it. If we are nervous in trades then we should just accept that there is a possibility that we are wrong.

If we don’t know what to look for then we shouldn’t be trading because our emotions will take over and we will lose money.

A trading system is not effective if it assumes 100% probability. That is impossible and when we have a losing trade it will leave us feeling disillusioned and fed up with ourselves.

Accept the probability of the trade and we accept the consequences.

Learn to trade as a professional trader. 

Our system isn’t wrong if we have a losing trade. We are not wrong if we have a losing trade. Trading is about probability. If we manage probability well and trade within a sensible set of mathematical and financial boundaries then we will have no emotion in trading.

The subconscious brain doesn’t understand probability. It looks for signals, symbols and patterns in something and when it sees them it seeks verification. When it gets verification it assumes a belief that this thing is 100% the truth.

……Imagine then trading systems.

Perceptions are formed automatically based on memories, knowledge and beliefs. We form a perception of the market action and this leads us to making decisions. These decisions may be right or wrong. We need to understand what is going on in our brain and see through the perception to assess the reality. We need to make judgements based on the reality of the situation and the probability involved.

Mentally, trading is tricky

In life we are taught to learn from our mistakes. In trading if we make mistakes then we must learn from them, however the difference is that in trading having a losing trade does not necessarily mean we made a mistake. It may just mean that the market decided not to do what we expected. It did the unexpected and took the least probable option.

Our mind will find it difficult to accept this. It will encourage us to change our system.

Most of us trade to have more control over our capital and our income – in trading this means two things. Having a good system (which is what we can provide you with on our trading training courses) and sticking to it.

It does not mean taking more trades. If we have a losing system and we take more trades we will go bust. If we have a winning system and we do not stick to it then we will lose money.

In trading we may get 7 occurrences of a similar pattern and then the next 3 times the market does something completely different. The brain cannot understand this. It goes off in search of a different perfect solution.

The way to overcome problems is to understand them better. The way to improve ourselves is to work on our self awareness and get to know what makes us tick. We are then in a position to find the solutions. We start our Secrets to trading success series with this in mind.