Because you want to succeed as a trader, it comes down to your state of mind. Trading is not about luck, it is about having a clear set of goals and the right mindset. This is why every market trader wants to be successful but only a few make it. A mindset id your predominant state of mind in your daily trading activities; it is what you think about and focus on in your daily experiences. The most successful traders have a set of core beliefs that help them stay on course as they progress. This guide will help to inspire you to refine certain habits that give you a winning mindset.
5 Foundational Steps To Take Today
Develop an Effective Morning Routine
- Many successful men and women have attributed their success to a great morning routine. If you are looking for a winning strategy, it should start with a winning morning routine. This routine will help not just handle the mechanics of getting into the market but also prepare you mentally.
- Numerous books have been written on the importance of developing a winning mindset as a trader. However, many traders do not take this seriously. As part of your morning routine, always ensure that your head is in the right place. This will start with a ritual that is unrelated to the market.
- As part of your morning routine, ensure you get a healthy breakfast. Shortly after that, engage in some form of meditation or some quiet time free of electronics and people if you are not into meditation. Besides that, always ensure you engage in some light exercise.
- If you are going to have breakfast, ensure that it is simple and fixed. One of the most famous people in history once said that the reason he wore the same outfit daily was to avoid wasting time picking his clothes, his name was Steve Jobs. Save complex dishes for your day off. The meditation session should be at least fifteen minutes long.
- Now that your head is in the right place, look to the futures market first. You have obviously gotten a sense of the market as you were catching up on the overnight news. However, checking out the futures will help you understand how the news is affecting the markets.
- If you already had some ideas on your trading strategy, ensure that the direction of the futures supports your ideas. If not, it might be a good idea to start revising your ideas. Check out potential candidates for your trading strategy. Once you identify the right candidates, set trade alerts so that you do not spend the whole day watching them.
- Lastly, review your buying power, account balance, and your open positions. Ensure that you check your stop orders are properly configured. In general, the amount of time your morning routine consumes will depend on the number of components you have included. Developing an effective morning routine will depend on regular practice. If you practice regularly, you will find that it leads to a successful trading day.
Never Stop Learning
- If done correctly, trading can help you grow your p/l massively. However, if you do not do it the right way, you could lose all your money. If you want to succeed as a trader, you need to devote as much energy to it as you would a regular job. Occasionally, someone will come along that gets extremely lucky. However, those stories are rare. Most people who make it in the market succeed through hard work and perseverance.
- If you want to succeed in the market, you will need to constantly educate yourself. You have to lean the options available to you. Read all the material you can find and watch the markets daily using charts and other market trading tools. You also have to pay attention to what the veterans are saying and doing if you want to succeed.
- As part of your trading strategy, adopt the KISS (Keep It Simple St^@!d) strategy. Always keep your strategy as simple as “buy low sell high.” This is how the big movers and shakers i trading always enjoy success. They study the market and know it like the back of their hand. As a result, nothing catches them off-guard. In short, they are always learning.
- If you want to succeed, keep the strategy simple by working hard. Gobble up as much information as you can find. To be successful as a trader, you will need to assume the role of a student of the market. Since it is impossible to learn everything, you should never stop learning. The only way to be a successful trader is to update your knowledge of the market constantly. What you knew a day ago might not be relevant today.
Create a Solid Risk Management Strategy
- Risk management is one of the most important aspects of forex trading. However, it also happens to be one of the most ignored aspects by traders. Many traders are willing to lose a certain amount of cash and so they simply hit the trade button. However, that is not forex trading, it is gambling. If you are not actively implementing a risk management strategy, you are a gambler. You are not looking for a long=term return on investment, you are looking for the jackpot.
- If you implement a solid risk management strategy, you will protect your money and become profitable in the long run. A good example of how failure to plan is gambling is the casino industry. while there are numerous people winning at casinos, the casinos remain profitable. This is because no matter how many people win the jackpot, there are always more people losing money.
- This is how risk management works. If you know how to control the losses, like a casino, you will be profitable no matter how much you lose in the short term. It will entail tilting every small factor in your favor to increase your chances of success. As a forex trader, you will want to become a great statistician and not a gambler. With such a strategy, you will always emerge victorious.
Keep a Trading Journal
- You may already know that top traders keep a trading journal. Simply put, a trading journal is a record, which is arranged by date and contains all of the trades you make in the market. Each entry in the journal represents a separate trade made by the trader. It gives you an overview of your trading activity such as exit and entry prices, trade results, position sizes, and any other data that may be useful to a trader. It is an important part of any successful trading plan.
- When you keep a trading journal, it helps you identify which aspect of your trading strategy is causing you to lose money. If you plan to keep a trading journal, consistency is important. Make an entry in the journal as soon as you make a trade. You should of your journal as a valuable tool in your trading strategy. Any entry that you leave out of your journal is a missed opportunity to gain insight into why you are losing money.
- Perform retrospectives regularly once you create the journal. If you are not making scheduled retrospectives, you will not be able to identify why you are losing money. This will help you to get rid of any mistakes you are making before they snowball into a major issue. To make the trading journal easier to use, ensure that you create it in Excel or its equivalent. Simply place the fields, which you care about into separate columns. This will make it easier to filter through them as the trading journal grows.
Control Your Emotions
- Losing money while trading can cause you a lot of anguish. However, if you allow your emotions to define your trading strategy, you will lose a lot of money. Controlling your emotions as a trader is more important than being smart. In fact, if being a successful trader were about IQ, there would be more people making money in the market.
- Self-awareness is key to controlling your emotions. Before you make any trading decision, always ask yourself why. If you find that your decision is based on fear, greed, impatience, or being bored, you are not controlling your emotions. If you already have a good strategy in place, answering your own question should be quite easy. It will give you the assurance that you and not your emotions are in control.
- A good way to keep emotions at bay is to stick to your plan no matter what your emotions are telling you. This is why you should take as much time as you need to create your trading plan.
Getting into the Mindset
Now for an experienced trader, much of the above is well known. But how well do you practice it? Some of it is easier said than done. If you want to ensure that you have in place the basics, and the not so basics, of the trading mindset then a mindset coach will be an essential component of your strategy.
Psychological mindset help for traders is not always readily available. And to be able to trade in the zone is a mindset you need to work towards and have an environment in which to develop it.
Give us a call and find out how we can help you trade in the zone, leaving you less susceptible to anxiety attacks and more mentally prepared for a long-term trading career, without the risk of burnout looming over you.
So contact us today to fix up your trading mindset