Monday, February 16, 2015

The Power of One Winning Trade and Getting Your Mind Right

I am the worst trader in the world!  

I know you have said this to yourself before, or at least something close to it.  I have.  When do I say it?  

It's always after a few losing trades.  Yeah I know.  You all think I'm an emotionless robotic trader.  In my member only Trade Report videos, you have never heard me get pissed off or sound frustrated.  I am ALWAYS positive.  

Here is a deep dark secret.  In the quiet moments, even I question myself during drawdowns (periods of losing trades).  It does not matter if it's a small drawdown sandwiched between two successful winning runs.  It's just how we are programmed as human beings.  Losing hurts more than winning feels good.  Every great coach will agree with that.  We obsess over the losses to the point that winning is nothing more than a relief.

Now here is where winning and losing traders diverge.  While we all feel the same emotions, the trader with a negative, losing mindset will change his game and start trading "stupid".  He will chase stocks that already made a move, take bigger risks with bigger position size than his account can handle and start taking small profits just to get that little win.  

The winning trader, while emotionally frustrated, sticks with the game plan and trading methodology.  Ten losing trades are not going to deter her because she knows she is a good trader and is just on the wrong side of the probabilities.  Soon the odds will change and if they do not, she will reassess her game plan and adapt.

2015 Trading Stats
Of course there are times when you are trading incorrectly and you need to review your trades to make sure it's just probability and not poor judgment.  However, even if you have made poor judgments with setups, you will never commit the trading sins you can easily control.

If you stick with your plan and do not let your emotions get the best of you, you will get that first winning trade.  That trade will kick start a new winning run and over time, if trading correctly, your winning runs will far outnumber your losing runs.  

It's all about getting your head right during the toughest times.  If you do that, and I know you will, you will be a successful trader.

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