‘Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime’.
Play the postcast:
For a trader, a system or method is akin to being given a fish, this may feed them for a while, however it is optimising how they are and developing their risk behaviours, skills and processes, and building their ‘inner game’, which enables them to live off markets for a lifetime.
At AlphaMind we believe that developing a broad base of understanding about how markets work and function, how people personally interface with markets and risk, and ultimately how they develop and apply their "inner game" to trading, that is where success comes from.
In our first AlphaMind Podcast of 2021 (attached to this article), we shared 10 powerful insights and pieces of wisdom we felt would help our listeners to improve their chances of becoming more successful as traders. These are focused predominantly on the ‘inner game’ aspects of trading and are based on our own struggles and extensive experiences over many years in financial markets plus thousands of hours of conversations with professional traders in our coaching programmes.
Our 10 pieces of Killer Insights and Enduring Wisdom for Traders
-
Make space for yourself and periodically step back from the screens and markets to be more present as a trader, more effective as an individual, and more grounded in the moment.
-
Create ‘tripwires’ to break you out of bad habits and negative thinking patterns. A tripwire is a tool or process you create which acts as a reminder to snap out of a negative mindset, or an unhelpful autopilot state.
-
Think of trading as a process and develop a process orientation rather than a results orientation. Traders can get good results from bad processes and bad results from good processes, that is the nature of trading. However, it is good processes which matter. Good processes build good habits. Good habits lead to better results over time.
-
Make learning lessons of your experiences, digest these and apply them to your work. If you aren’t doing this, then you are missing out on powerful lessons. Use a journal to support this process.
-
Look Forward Not Down: A positive proactive mindset is vital. Self-belief and self-trust are vital characteristics for a trader and help foster a proactive mindset which looks forward. If you lack the faith in yourself to succeed, you are more likely to look down. Looking down makes the challenge much tougher.
-
There is no such thing as perfection in trading. Avoiding trying to perfect trades: optimise and be happy with ‘good enough’ not perfect.
-
Remaining on plan is difficult, but good planning remains vital for trading success. Military strategists say ‘no plan survives first contact with the enemy’, but they also know that ‘planning is essential’. Planning should extend to more than just the trade idea, it includes risk management, contingencies, exit strategies, and much more.
-
‘Letting Go’ is the secret sauce or great traders. Practice detachment, learn to walk away, be willing to recognise your fallibility and do not dwell on errors. Practice detachment. Work on becoming detached to redundant ideas, don’t marry a trade or a belief, let go of attachments to outcomes, good and bad. Above all ‘Let go’ of your ego and any attachment to ideals of entitlement.
-
Put effort into developing how you generate insights. Be curious and remain curious rather than think you have the solutions. Clearing the head and mind, and taking actions to do this, becomes a powerful source of insights which lead to better trading and more effective performance.
-
Understanding your reason for why you are trading, which market you are trading and why you are trading the way you are. Look to other markets, products, styles, timeframes, and considering the options open to you.
AlphaMind do not offer trading or investment advice and do not take responsibility for any investment or trading actions or decisions taken by clients or any observers of our material in any form of media, either now or in future.
Editors’ Picks
EUR/USD treads water above 1.1850 amid thin trading
EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.
GBP/USD flat lines as traders await key UK and US macro data
GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.
Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited
Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.
Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases
Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.
Global inflation watch: Signs of cooling services inflation
Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.