Tag Archive for: reviewing your trades

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9 Things Successful Traders (& People) Do

Successful traders and people often do things differently than the rest of the crowd. But what they do is not magical or something unavailable to you. A successful trader mindset is always behind these people, and this is something you can build.  There is very little about trading that is easy, and often times I hear of traders applying the wrong mindset to the challenges they face. Here are 9 simple things successful traders (& people) do, which you can adopt to change your compass towards success.

1. Have a Passion For the Process

Around the age of 5, Earl Woods brought his son on to a TV show to demonstrate how good his son’s golf swing was. After the young Tiger showed a glimpse of what he was to become, his dad was asked the following question;

“How many hours do you make him practice every day?”

Earl quickly responded, “Make him…I cannot get him to stop.”

do what you love and are passionate about 2ndskiesforex
You have to have a passion for trading and the process. Your passion cannot be ‘outcome dependent‘, meaning if you make x dollars in y months, then I’ll remain motivated to do the work. You must be willing to do the work, particularly in the moments when things are not working your way. It is easy to do the work when all is going well.

 

2. You Must Accept a Tedium of Work in Your Learning Process

There will be moments in your learning process which will seem boring, tedious, and difficult. You will often have to work on things you like the least – perhaps money management, filling out your trading journal or reviewing your trades. It is unlikely you will enjoy everything you do equally. In all great things built, there was always a tedium of work in the process – the moments where you sweat, tire and become exhausted. You must accept this tedium of work, and understand those little things build up skills and wire your brain to trade successfully.

practicing forex trading 2ndskiesforex

 

3. Frustration Often Times is a Sign of Progress

When the brain gets to something it doesn’t understand, it often gets frustrated not having the answer. Being frustrated by something in your trading process is a communique you are dealing with things more complex than you understand, or can do efficiently now. This is a good thing. It means you are now heading into territory you are not skilled in, but need to be to become a successful trader.  Be grateful those things are being pointed out – for when you work on them, growth happens.

 

4. You and Your Environment Imprint Upon You

The things you say to yourself before, during and after each trade have an impact. They imprint upon you, particularly the emotional quality of them. The same goes for your environment (parents, friends, co-workers). Make sure what is imprinted upon you is positive and directs you towards being successful. Learn to protect your mental capital.

 

5. Do Not Expect Immediate Results

Nobody who is a successful trader (or successful at anything) got there in a matter of months and expected immediate results. In a great commercial ‘Maybe It’s My Fault‘, amongst saying many brilliant things, Michael Jordan shares the following;

“Maybe I led you to believe that basketball was a god given gift, and not something I worked for – every single day of my life.“

michael jordan practicing 2nd skies forex
It’s easy for us to see the success of such people. But we often fail to see all the hard work behind it. Michael had to work at his game for years, often filled with failures before he started to notice results. Real change in your trading does not come easily or quickly.

 

6. Do Not Look For an Easy Way Out

I have never met a successful trader or person who looked for the easy way out. You can pirate all the systems you want, but you will not have the mindset of abundance to be successful. You can try all the robots out there – none will become the ATM machine you think they will.

Do you really think Tom Brady or Peyton Manning got to being elite quarterbacks by not doing the work? Do you really think they skipped steps?

Remember, 84% of all people who win the lottery are broke inside three years. Now ask yourself who you’d rather be;

Person A – who makes $1 million in a lottery

or

Person B – who built up a business over three years and made $1 million?

Who will be able to repeat that success, use their skills, experience, and be most likely to do it again? Obviously Person B, while Person A by contrast has no skills, information or experience working for them. Food 4 thought, but do not look for an easy way out. There is none.

7. In The Future, I will…

I cannot tell you how many students tell me, or my partner Aruna who does the ERT training program, that they will feel confident, relaxed, or happy when they become a successful trader. Why put your happiness on hold? Why make your mindset held captive to some unknown future? Why not feel confident, relaxed and happy now?

A good friend of mine recently shared this great quote and post which said the following;

Ego says “Once everything falls into place, I will find peace.” Spirit says, “Find Peace and everything will fall into place.”

 

8. Take Responsibility for Your Behavior

Would you expect to be capable of finishing a marathon without running, stretching, training, proper hydration and diet? Would you expect to build strength and muscles sitting in a chair all day? Of course not. What makes you think trading is different?

Don’t fill out your journal, evaluate your trades, train properly, build your trading skill set, or a successful trading mindset – then do not expect to become a successful trader. Be honest with yourself and take responsibility for your behavior.

discipline in trading 2ndskiesforex

9. Failure is a Part of All Successful Ventures

Failure is a part of the process – an element you have to befriend. If you make it mean something about you, then it will consume you and create negative trading habits. However if you learn from failures, you will grow from them. You have overcome challenges like this in the past.  When those challenges were happening, at one point you didn’t think you could get around them. This situation is no different.

Remind yourself of the challenges you have overcome to get here, and what strengths you have. They will aid you in difficult times. Peter Vesterbacka – the creator of Angry Birds, had produced 51 games prior to creating Angry Birds, and virtually ended up in bankruptcy. It has done over $6B in sales over the last few years. Failure is a part of all successful ventures. Real confidence comes in overcoming obstacles, failures and challenges.

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Reactions to Stress in Trading

Tell me if this trading situation below has happened to you before.

You’ve just had your largest loss ever (or big one), and you are feeling incredibly risk averse, almost to the point where nothing looks good to trade. With each new setup that comes, you find yourself still recalling that big loss and hesitate, or fail to pull the trigger.

This common experience amongst traders has a biological root, and most often creates a negative psychological effect on you. These biological and psychological causes can have a tremendous impact on your trading mindset, perhaps writing the future history for your trading career. The good thing is, your brain and trading future can be changed.

Biological Reactions to Stress in Trading
Losses no doubt can have an effect on your trader psychology, but also your biology and brain. Cumulative losses can create a huge increase in cortisol in your system. Too much cortisol over a long enough period can cause neurons to fire, where you can no longer concentrate effectively to make a good trading decision.

But take a huge loss, and now your brain is likely re-wired for more losses – minimally in a poor state for trading.

What Happens When You Take A Huge Loss?
There are two regions of the brain that work together in remembering stressful events. They are the ‘hippocampus‘ and ‘amygdala‘. We’ve actually talked about the amygdala and how it impacts your trading which you can read about here.

To clarify between the two, the hippocampus will record the factual details of the big trading loss, while the amygdala will encode the emotional significance of it. Both of these are affected by stress, which releases stress hormones that can heavily affect brain performance.

Now as stress and cortisol levels rise, with continued exposure, our tendency to recall any trading events stored during this neurological state increases.

For a really good graph about performance and a stress curve, see the graph below.

stress performance curve trading 2ndskiesforex
Getting back to the big loss, the experience becomes quite intense emotionally, almost as if it was burned into your brain. This is because of the intensity of those hormones present during this loss. This imprinting in your mind becomes corrosive to your trading, particularly your mindset.

You start to remember negative experiences, that may or may not have anything to do with trading. Just recalling these memories will affect your performance, but there are additional consequences.

Anytime you are analyzing the price action in real time and a new setup forms, you will with greater intensity, draw upon those negative feelings and memories, one of them being the big loss itself. This only makes you increasingly risk averse and afraid to lose, almost to an irrational level. This could happen despite a high-quality signal being right in front of you. In essence, you become paralyzed by this risk aversion, unable to pull the trigger.

Another scenario could be that you are ‘shell-shocked‘ from the trading loss, yet still are able to make a trade. Unfortunately, your trading decisions are totally off kilt. You think you see setups, and start making trades, only later to realize there was no price action setup at all. While reviewing your trades, you actually see now there was no pattern at all.

This is from a biological reaction to the stress you experienced. In some traders, without the proper tools, it becomes so damaging, that it affects them for weeks, months, perhaps even years. Some traders may never even recover from this. Even though that huge loss was ions ago, you still remember it vividly and often recall it when trading. Has this ever happened to you before?

stress in trading 2ndskiesforex
If so, do not worry, as most have had this experience.

Can You Change This?
The good thing is you can re-wire your brain, almost like re-writing your hard drive on a computer. Neural connections can be rebuilt and tuned for success. You can also build new connections which overpower this experience, to regain your confidence and make great trades.

One Way to Change Your Brain for Success
One of the best ways to re-wire your brain for success, and erase these negative trading experiences is to enter a ‘Whole-Brain State‘. This is where your brain operates in an integrated balance. Your left and right hemispheres are working well together. You are not pumping unnecessary stress hormones into your system. You avoid entering a ‘fight or flight‘ response, or being overly emotional, or too intellectual.

whole brain state ERT Training 2ndskiesforex
In essence, your brain operates in a balance which the Whole Brain State induces. When you think about it, which state would you want to be in for trading? A fight or flight state? Being too intellectual or emotional? Having massive amounts of stress hormones pumping through your brain? Or be in a balanced whole brain state?

Yoga and meditation are notorious for helping to put you into a whole brain state, while tuning your central nervous system.

Another powerful method is ERT Training, which we’ve specifically built for traders. If you’ve had similar experiences to the ones I listed above, and still keep recalling negative trading experiences even today, then you’re likely not in a whole brain state. But if you want to learn how to be in a whole brain state while trading, then you definitely have a tool to build a successful trading mindset.