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Improving your Trading Mindset

Traders often talk about mindset, but what can actually be done to weather the storm of a trade that goes the wrong way, or stay calm as your trade skyrockets to glory? In this article, we take a deep dive into what can be done about the trading mindset. 


Big Gains Big Moves

Getting into the big moves can mean big dollars, so what techniques do traders use when the market is swinging hard either for, or against them? 



Breathing techniques such as the Whimhoff method can be used to control physiological responses like heart rate, stress receptors and more. It could even be as simple as breathing slow and deep, through the stomach (stomach out for breathing in, stomach contracted for breathing out). Breathing controls oxygen in the system allowing your body to have the right amount. When trading heats up, some traders breathe shallow and sharply, while some forget to breathe at all! Controlling your breath will bring you more control and reason when trading. 


Future Pace

Seeing the future, also known as future pacing, is a way of using imagery and imagination to picture yourself winning the trade, picture the market going where you expect it to go and believing the outcome. Future pacing allows the mind to accept the reality of winning and feeling the market move in the right direction. This may help alleviate things like self doubt, disbelief and lack of backing yourself and your trading decisions.  



Meditating is an excellent way to calm the mind. There are many forms of meditation which can either form extreme focus or pure peace and emptiness. Meditating before a trading session (but perhaps after analysing the markets for the day) can bring more focus and calm to your trading day. 



Learning about trading on a deeper level can help you feel that you are always moving forward, even when the market doesn’t go your way. Knowledge is power, and power is money, so always learning and mastering your craft is essential for achieving greatness. Learning more about trading will help you to understand the markets better and allow for more patience when waiting for the right setup to land in front of you.


Think Numbers

Statistics and numbers are all part of trading. The market is often unexplained to some degree, however there are forces that pull and push the market based on reason, statistics and probabilities. Ensuring your volume, stop loss, target profits are aligned with your trading plan will allow you to hold a trade to its fruition far easier than if you over leverage. Trading in the Zone by Mark Douglas is probably one of the best books for understanding emotion and probability in trading. Get a copy and read it over and over!


Parasitic Decisions

Eating the wrong foods can cause your brain to desire things that are not beneficial for you. That craving for soft drink, fried chicken or salty fried sea-food could simply be a biochemical mismatch pushing you towards the wrong things. Who’s to say this mentality doesn’t spread over to trading and other life decisions too? One’s that perhaps might influence you to continue making these same craving based decisions, it’s a vicious circle. Here’s two reasons why the wrong foods could be an issue: 


1. Biochemical reaction: Your body and brain are responding to internal chemistry made by itself via the foods being ingested.  


2. Paracytic Takeover: Parasites have a way of influencing decisions when it comes to food intake. Giving in ensures they remain alive, fed and able to reproduce. By eating healthier food options and ‘real’ organic material, parasites can sometimes not sustain life in your body. You may feel them fighting (through biochemical reaction and desire to eat poorly), but don’t give in. This weak mental behaviour could potentially flow to other things in life such as trading, friend or partner choices and even how you treat yourself.     


External Stresses

When trading, being focused without distraction can be critical. One wrong move and you could be chasing losses. Remove external stresses from your trading time, put your phone on silent and move it away from sight, close the door so external parties cannot distract you and mute pop-ups and notifications on your computer. Trading is a tough game, be strong, be focused and don’t allow external stresses to make it harder than it needs to be. 


Think Long Term  

Trading is a short term play with a long term objective. The most powerful factor in trading is probably compounding interest. The compounding effect coupled with dollar cost averaging (or simply depositing frequently like a savings plan) can really take hold over time. While the short term moves are critical, it is important to think long term so that you can more easily stick to your trading plan and longer term vision. 


How many of these do you incorporate to your life and trading? 

Out of these tips, what ones are you looking to incorporate into your life moving forward and how many did you already do? 


Good luck traders, stay focused!