Started by PocketOption, Sep 02, 2022, 05:54 am
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There are 2 types of edges in trading, a trading strategy edge and a trading psychology edge.
You need to have both to succeed.
This post will focus on how to develop your mental edge, which is the more important of the 2 types.
The process of developing a trading psychology edge is simple, but usually not easy.
In this post, I'll give you strategies to uncover your trading genius and overcome your biggest roadblocks.
Keep reading to learn the details of each step.
This step might seem obvious to some people, but it won't be to others, so I'm going to talk about it.
In order to develop a mental edge in trading, you have to engage the markets on a regular basis.
Even if you only demo trade, taking trades will start to expose your psychological strengths and weaknesses, within the context of trading.
Here are some things that you might discover after you begin trading.
That's just a short list of what could come up for you.
But you'll only discover these things when you go through the process of taking trades and experiencing the emotional ups and downs that come with wins and losses.
Once you've taken some trades, now it's time to take an inventory of your strengths and weaknesses.
Awareness is the first step to improving your performance in any area.
How many times have you experienced an event with a group of people and they noticed things about the event that you missed?
This is because they were aware of those things and you weren't.
You also probably noticed things that they didn't.
That shows that we will only notice things that we place our awareness on.
So start a trading journal and write down what you're good at and what you aren't so great at, while you're trading.
This is the first step to full awareness.
The things you do well will give you clues as to what you should probably focus on in trading.
For example, if you find it easy to follow a trend on the daily chart, then you should probably work on trading some sort of trend following, swing trading strategy.
If you lose a lot of money when you day trade, then that's probably something you should avoid.
Maybe you live in a timezone that makes it difficult to trade the New York Forex session. Then you could work on a strategy that trades the Asian session or the London open instead.
Like with any other skill, there will be things that are optional, and there will be things that you have to change.
In the case of day trading versus swing trading, you don't have to day trade. You can trade on other timeframes, so being bad at day trading is not a problem.
But let's say that you have a tendency to over trade and revenge trade.
That's a problem that has to be fixed if you want to become a successful trader.
So find ways to amplify your strengths.
That's pretty easy.
What about your weaknesses?
That will probably take a little more effort.
Here's how to get started with overcoming them.
The great news is that there are a ton of solutions out there to help you overcome anything you're working on.
You simply have to do the work to seek out these solutions and implement them.
I cannot list all of the strategies available because there are so many of them.
But I'll get you started with the 2 general categories.
I believe that there are only 2 parts to the human mind, the conscious and subconscious.
Yeah, you probably knew that already.
However, I feel that many therapists and coaches don't understand how to apply this concept effectively. Many are trained in a particular type of treatment. Most only follow the doctrine of that modality and think that everything can be solved through that lens.
Obviously, the more aware ones understand the limitations of their craft. But there are many who do not.
Not entirely their fault. They don't know what they don't know.
There are a lot of things that I don't know either.
But I do know that it's up you to you to use your intellect to figure out what will work best for you.
That said, let's take a look at a real example of why the conscious/subconscious theory is so important.
I have a friend who used to smoke. If you know a smoker, or you were a smoker, you know that it can be one of the toughest habits to break.
But guess how he quit?
He was on a smoke break at work one day…
He looked the the cigarette, and thought “This is dumb.”
So he quit cold turkey, on the spot.
How was that possible?
I don't think that anyone knows for sure, probably not even him. But here's my theory…
There's always a reason why we do things. Our actions fulfill a need or desire in our mind.
Sometimes the cause of a desire sits in our conscious mind. But many times it sits in the subconscious mind.
I believe that the cause of his smoking habit was in his conscious mind. So he could use a conscious thought to change the behavior.
That's why it was so easy.
Now if the source was in his subconscious, even though he knew that smoking was a waste of time and money, it would have been much harder to quit.
So when you look for methods to help you change your behaviors, start with the conscious methods first because those will give you the easiest wins.
But if you cannot change with those methods, then it's time to go deeper and dive into your subconscious.
It's not always possible to figure out if a behavior is caused by a subconscious or conscious source. It can also be difficult to figure out which part of your mind a treatment will work on.
Do your best and you'll get a good feel for it after trying a few different things.
Methods for changing thoughts in your conscious mind usually involve mental visualization exercises, repeating affirmations or visual cues.
Changing your subconscious mind is a new concept to many people and it's probably new to you too. The reason why this works may not be obvious at first.
You're basically digging down into your subconscious and bringing the causes of your negative behavior to the surface. When you do this, it's much easier to resolve the issue so the symptoms never come up again.
This can be very powerful stuff and you really have to experience it believe it.
Again, this is just a short list of what's out there. But it will give you a great starting point.
Now it's time to see how you've done.
Sit down on a Sunday morning with a coffee (or your favorite drink) and review your trading journal again.
Did the methods you used work?
If yes, then great, you're done! You can stop reading right now.
However, it's more likely that you still have things that aren't completely resolved.
That's just how it works.
Unfortunately, modern mass marketing has given us the impression that there's always a pill or hack that we can use to instantly achieve any outcome that we want.
In reality, that's rarely the case.
It's like mining. Miners almost never hit gold on the first try.
They usually have to do a lot of homework and drill several holes before they find a workable mine.
So put down your discouragement and dig your heels in for the long haul. Your transformation could be fast, but it's more likely that it will be a process.
That's how your great grandparents did it, along with every generation before them.
The idea of instant results is a new and often unrealistic ideal.
Instead of getting discouraged, do this:
I've had many cases where this has happened in my life.
For example, back in the day, I used to listen to a lot of Tony Robbins recordings. He's great, I have nothing against Tony.
However, I put too much faith in the idea that he had all the answers. I figured that since he had so many high-profile clients, he must have a solution that could help me.
So I would listen to his tracks over and over, and implement the strategies…over and over.
…and they did help a little.
But they didn't create the big shifts that I was looking for.
Instead of continuing to do something that didn't work, I should have reassessed my results after a few weeks, then tried something else. I just didn't know any better back then, and I'm OK with that.
It literally took me years to figure out that I needed to branch out and try other things.
I want you to learn from my experience.
If you didn't get the results that you expected, then don't get down on yourself.
Remember that one of the the most powerful tools that you can have in your trading toolbox is self-forgiveness.
It will take as long as it takes for you to become successful at trading. So get back up on your horse and keep going.
Of course, there can be the tendency to have “shiny object syndrome,” where you keep hopping to the next new thing. So you have to be honest and ask yourself if you've given the method an honest try, before moving on.
Only you can answer that question.
Most new traders think that the right trading strategy will make them rich.
Experienced traders know that having the right mindset is the real key to success.
A solid trading psychology will allow you to overcome losing streaks, keep expanding your knowledge, and persevere when most people would give up.
Implement the tips in this post and you'll start to see positive results.
Amplify your strengths, heal your weaknesses.
You can do it.
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