Mindset of A Successful Trader
I was talking with one of my price action forex students today who in some sense, has a very typical story - they tried everything, from forex robots, signal services, listening to expert trade advice, reading all kinds of books, etc. but no matter what they did, they still were consistently losing. They are definitely dedicated and sincerely want to learn to trade the forex market successfully so it is not a question of effort.
Particularly, they seemed to have trouble dealing with losses and asked me how I dealt with them. I asked them how they dealt with them just to get an idea of what their mindset was and where he was coming from. After hearing his responses, I told him I would write an article about how a person with a successful mindset deals with losses and failures which can make all the difference in the world. So here is a short but sweet article describing 5 key things that will help you deal with losses and have a successful mindset.
#1 Don't Let Losses, Mistakes or Failures Determine Your Sense of Value
Successful people seem to have a completely different mindset around losses and failure because they think about it differently. In trading, this would translate to not letting every trade (win or lose) determine your sense of value because this will make you totally dependent upon the results in the beginning which is a precarious time. Instead, focus on what you need to do with the information being presented in the loss or mistake you made. This will keep you focused on moving forward instead of becoming judgmental about your process. Don't let the pain of the loss color your experience. Use it as fuel to learn to trade better.
#2 Use Losses and Failures As An Opportunity To Become More Resilient
The greatest traders, basketball players, golfers, or any great in any field has losses and failures. They don't look at this and become despondent or think their are a failure. They become humble, realize they have more to learn, and become sharper in how they look at things which helps the process become more informative.
But more importantly, they become more resilient and determined to become better. I really congratulate Tiger Woods who for almost 3 years had not had a major win. Keep in mind this was someone who was used to winning like it was breathing. In his last tournament, he was in the lead after having one of his best rounds ever in his life. What was he doing after playing 18 holes of golf after 3.5 hours of play? Right back at the driving range working with his coach to figure out what he could have done better.
He used these losses over the years to become more resilient and this is what you need to do. Imagine having a 3 year losing streak, and imagine what kind of resolve and resiliency it takes to keep fighting to get back to what you believe is possible. That is resiliency.
#3 Take Trading Seriously, Not Yourself
Successful traders (and for that matter, people across all fields) take the process seriously, but they do not take themselves that seriously. They know they are human, that they will make mistakes, that there is more to learn, that they will never be perfect. So don't take your thoughts, judgments and emotions about losses too seriously or let them define you. But take the process of learning to trade forex seriously.
#4 A Loss, Mistake or Failure Informs Me What I'm Doing Wrong
Similar to #1, use those losses, failures and mistakes to be opportunities to correct your mistakes. I cannot tell you how many traders I have seen learning to trade forex price action would be great traders if they could correct their mistakes. Often times, mistakes mean the difference between a win and a loss, a winning month and a losing one, so use the information contained in each loss, failure or mistake as an opportunity to get closer to your dream of trading successfully.
#5 It Takes Courage To Fail
No trader ever became successful without taking risks, without going against their emotions, their sense of comfort, their desire to do it the easy way, or not put in the work. You have to get comfortable with losing as it will be part of the game. Be willing to fail and make mistakes. If you hide behind the comfort zone, you will never go to places you've never been before in your trading. You will never see the top of the mountain and the view from there.
Learn to face the craziness of the markets, the unpredictability and the oncoming waves crashing into you with courage. You can learn from your failures as much as your successes, so just consider it part of the process of learning to trade and achieving your objective.
So there you have it, 5 key things which can help you develop a successful mindset and help you deal with losses so they become the fuel and building blocks of your successful trading, not an emotional vice grip which constrains your natural talents and intelligence from coming out. The mindset of a successful trader simply deals with the experience of losses and failures differently - but most importantly, realizes success starts with your mindset.
I welcome your feedback and thoughts on this so make sure to comment, like and share the article to pass it on.
Kind Regards,
Chris Capre
2ndSkiesForex.com
Facebook: 2ndSkiesForex
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Comment by elanthiraiyan on April 4, 2012 at 5:25am -
i agree with u chris.. its all mindset. one thing i am doing again and again is curosity to earn money quickly(bec of family problem).but market doesnot know our curosity. even i learn before itself i did same thing again and again , finally it went loss. mindset is much more important than the startegy u ve .i am the good example here to be a bad trader.
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Comment by 2ndSkiesForex on April 4, 2012 at 2:30pm -
Hello Elanthiraiyan,
Yes, mindset is much more important than the strategy, often the most important weapon in trading so good that you realized this.
Thanks for the kind words on the article.
Kind Regards,
Chris
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Comment by JP on April 4, 2012 at 8:02pm -
From Very few Trading I've Done & all the Losses I made, I have read a whole theory of Mind Set that is required for a trader. Im not a good trader, But Losses were a part that has to be accepted & a Good Trader is One who is mentally stable Goes through wins & also Through losses & still Trading with positive attitude to win. 30% trading is all the knowledge of a trader 69% is Mental Stability & 1% is Luck...........!!!! GOD Gimme Stability to Trade Well :P
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Comment by Peter jcp on April 4, 2012 at 9:40pm -
Hi Chris - I have worked out that I have now had over 2000 ( yes 2000) losses since I started multi trading intraday short term ( I am a bit more than a scalper :-) ).
Thankfully I have had a lot more wins and my monthly win ratios have ranged between as low as 63% to as high as 82%. I have battled through "mindset" problems by trying to compound to quickly 3 years ago and the market told me simply - "your not ready"
I think trading helps discover yourself in terms of your own mental capability - and I have never "revisited" trying to scalp with over 22 lots or about £150-160 per pip and I still have a high regard that the market can "beat me" any time it really wants too
My wife knows all my weaknesses far better than I do - but there again - I know hers too (lol) :-) regards Peter
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Comment by 2ndSkiesForex on April 5, 2012 at 12:22am
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Hello JP,
It is important to understand in the beginning you will make mistakes, but not to create the self-image that you 'are not a good trader' as that will have an imprint on you psychologically and how you deal with trading and the learning process.
Instead, just as the article says, take the losses as information on what you need to do differently and then work to correct them. Avoid making judgments about you personally from your trading and you'll keep your energy focused in the right direction.
Hope this helps
Kind Regards,
Chris
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Comment by 2ndSkiesForex on April 5, 2012 at 12:24am
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@Peter,
Yes, trading is like facing a mirror and definitely a process of self-discovery of your current capabilities - but they are not fixed and something that can be grown (or weakened). The mind has a neuro-plasticity to it meaning it can change and grow under the right conditions but id be willing to bet if you worked on it, you could increase the lot size with the right training.
Just my thoughts as the system is obviously in place.
Kind Regards,
Chris
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Comment by Grant Stephenson on April 5, 2012 at 3:31am -
Great article! thanks for sharing ^_^
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Comment by JP on April 5, 2012 at 5:19am
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Hello Chris,
I totally agree with you & I'll better concentrate to Trade better not to judge myself in negative way. But one thing that is causing a problem for me is, Im afraid to become a Full-Time trader, People around me are so negative about trading, but somehow im still trading. The things sticking to my mind said by the people like "You cannot spend whole life on trading, You should have a fixed income to Live in a family." Im not married yet, but soon i will be. Im afraid if Full time trading Brings me loss someday i cant handle, then how things gonna work? I never had any Teacher, Never.......!!! All i learned is from E-books, Demo account, & people's sharing experiences on Forums. But still i feel if i had someone to guide who can keep me motivated. Hell lot of confused Guy im at current position, but really Love Trading.
-JP
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Comment by 2ndSkiesForex on April 5, 2012 at 3:15pm
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@Grant,
Thanks - glad you enjoyed it.
Chris
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Comment by 2ndSkiesForex on April 5, 2012 at 3:20pm
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@JP
Interesting comments and thank you for sharing. What I picked up from what you said, is how your afraid to become a full time trader for the worry about your close friends/relatives negative thoughts/judgments/beliefs about trading. That will definitely have an impact as you start to succeed, in the back of your mind, you'll be worrying about the backlash from those you care about accepting you as you are.
One solution would be to do part time trading, build up a good record of it, which over time will show you can do it. This will likely convince your close friends/family that you can do it and eventually they might support you. Meanwhile, you've still provided for your family by having a fixed income to take care of your needs, but still learned how to trade and developed your skills.
That is one route. Generally, if you really are sincere about it, those who care for you will eventually support you. In the beginning my close friends and family didn't understand it. Now, not only do they support me, but they ask me to pay for their plane tickets when coming to see me :-ooo
People who really care about you will support you - success or not. They will see your sincerity and support that.
But naturally, being successful at it will further give them confidence and then they will support you once they see the rewards.
So hopefully this gives you some idea. In terms of working with someone, feel free to check out my site as I have courses where I work with students on the traders forum all the time.
Hope this helps.
Kind Regards,
Chris
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