A Positive Mindset is Fundamental to Success in any Area
Before reaching the desired result - consistent and conscious profits, any trader experiences a number of victories and defeats. This is why I always keep a famous saying in mind - 'The winner is the person that rises one time more than he falls!' From my own experience and from the experience of many successful traders, success is based on how we think, what mindset we have.
Let's give some thought to how we should behave when our trading brings losses. In this situation, the conscious mind of an ordinary person is despondent, sad, depressed. In other words, it suffers because, on the one hand, we fail to reach the desired thing (to generate profits), on the other, the losses themselves are unpleasant to us and cause suffering. It is these two things that are crucial in helping a negative mindset develop in us.
There are, however, no reasons for disappointment, in fact! Please, remember that once your mind is filled with the negative, overwhelmed with depression or stress, rest assured that you have lost track of yourself. You misestimate the situation and see phenomena.
How such phenomena should be evaluated, then, and how should one think in this event? The key to positive thinking lies here. In fact, there is neither a good nor a bad phenomenon. Any phenomenon or any event we experience is simply a phenomenon. It is neutral. IT has neither the positive, nor the negative meaning. It is evaluated by our conscious mind. It is us that evaluate a certain event that takes place around or to us. For us to be able to solve a certain problem that arises, we merely need to change our attitude to the situation at hand. We got to start thinking positively!
If you give an unbiased look at phenomena around you will see that one and the same event brings happiness to some and suffering to others. But it is one and the same event. People simply have different attitudes to it. This is the key. We just got to positively view any phenomenon, find something positive there is to in. This is when we will be able to see everything in the positive light.
What will happen then? We will overflow with energy. Just watch a happy person for a little while, the one who is filled with joy. They simply irradiate energy and there is only the positive and strength in their mind. The human can achieve great things in this state of the mind. And the energy generated by positive thinking to fill us will become the force that will help us achieve any of our goals. On the other hand, negative thinking results in great waste of energy. It looks like a vessel with a host of openings through which valuable liquid is oozing out.
Let's now apply the above to trading in financial markets. So, we got a loss. How should we treat this? What conscious mind and thinking should we have? Let's deal with this.
Firstly, if we tried our best at trading and achieved loss as a result - what can we do to change the situation? Try further and do our best or get depressed. But if you get depressed, what will change? Nothing. So, what's the point in being in this state of the mind? None whatsoever. But if you can do your best, why don't you do that?
Secondly, if we do our best but still produce a negative result (loss) - is this really a negative result? On second thought, we will be sure it is not. This is not a negative result. And this is why: I just love a wise saying that 'Defeat is the foundation of future victories!'. Despite having a trading loss, we acquired experience, valuable experience. The market taught us a lesson. So, we can become wiser after we analyze this experience and learn our lessons. This will improve our trading and make it clear what helps producing losses! Knowing this is an important factor of not producing losses in the future!
What does progress in trading mean? This is maximizing things that produce profits and minimizing things that produce losses. This is the only and absolutely true formula of success in any area. Let us build a strong foundation on our losses to reach consistent and conscious profits in the future!
I repeat you have to realize that everything is determined by how we think!
As a summary of our today's conversation, think positive to avoid depression or stress generated by losses. This is the first thing.
Secondly, change your attitude to losses in addition to promoting your positive thinking. Most traders initially have a wrong perception of losses. It is because of their misconception of losses that the trader produces them as a result of trading. To trade appropriately, you need to radically change your attitude to losses and stop hating them. It is because we don't want to have losses that our conscious mind avoids them, choosing a trading style called 'sitting on losses' rather than covering them before they grow too big. There is a crucial thing here as well. When our trading results in a loser, our conscious mind does not like this situation and we start approaching the market with prejudice, i.e. as if the market will only move in favor of our open trade. We start building our trading strategy on this basis and if the market moves in the unfavorable direction, we get huge losses or total ruin of the account. This is the trap many traders often get caught in. Further details are given in my lectures, 'Control of Potential Losses' and 'How to Learn to Limit Trading Losses. Practical Techniques of Preserving the Capital'.
Not to get caught in a trap created by losers we do special exercises to become aware that losses have occurred and will occur. They are simply BUSINESS EXPENSES. No more, no less. Most importantly, these expenses should be CONTROLLED.
Let's get back to the main subject of today's conversation. Any trader walks the path to professionalism through a series of victories and defeats as I have already said today, and when you make trading losses, you got to do the following instead of getting stressed and depressed:
- firstly, develop your positive thinking, because no phenomenon is bad or good - it is evaluated by our conscious mind. We should teach ourselves to evaluate any phenomenon only in the positive light;
- secondly, we start to see losses differently. On the one hand, they are business expenses. On the other, payment for lessons taught by the market;
- thirdly, if you still got stressed, think about this: what will change if you remain in this state? Nothing! No single problem will be resolved! So, why should you be in it, to start with?;
- fourthly, if you can't do something now, it doesn't mean you will fail in the future. If you can do your best now, do it without sparing yourself. If you can't do it now, crave, really crave for being able to do this in the future. You got to develop this craving, this desire, get focused on it.
Mastery is not born. Mastery is DEVELOPED! Everything depends on us, our daily effort! Any goal, absolutely any, is achievable.
In conclusion, let's speak about the very approach to trading. Try to stay concentrated. Bring your thoughts and knowledge in order. Take a trading method and master it perfectly. This tip will help many people as I know from experience there are many traders striving to learn a lot of different trading techniques. They learn all the time but as time passes they still cannot produce consistent results.
Now I will give details of how you can master virtually any trading method and make it generate positive results. There is a common algorithm.
1. Choose the trading method you like and are psychologically comfortable with.
2. Make a clear written description of conditions for market entries and exits. Very importantly, you have to think of what you will do if the market moves against your target. Only later think of where you will take your profits. Successful traders get ready from the start to a possibility of a loss. They prepare for the worse. This is why they know what to do at this moment and can save their capital and profits. ANY TRADER’S PRIMARY OBJECTIVE SHOULD BE TO LEARN TO SAVE THEIR CAPITAL AND PROFITS RATHER THAN TO PRODUCE PROFITS.
3. Lay out your money management and risk management for your trading. Lay out all trading conditions for this method in the most detailed manner.
4. Make up a clear action plan for trading. This plan involves the trader's behavior itself and use of the trading method.
5. Follow this trading plan the entire week, i.e. five business days.
No matter what you get, profits or losses, just clearly following the trading plan you have set for yourself. The reason being it is only this way that you can understand where you are heading. Reaching a goal is no abstract thing, it's a real path. So you, in an attempt to achieve your goal, should be clear about where you are heading, what direction you have taken and how much progress you've already made.
Five trading days pass. You start analyzing how you traded and the results you produced. Find out why you got a certain result, and learn your trading strengths and weaknesses. Make adjustments to your trading plan. Get it aligned with your goal. Then start trading for another five days. And go on until you get the result you have been striving for. This way you align the trading method with your needs, your vision of the market, your psychology. It will become your super-tool in making profits. And you have created it yourself.
Each of you can become a successful trader! That's a fact.
Now I'm going to give you a valuable tip.
When life's tough, when you fail, think of other traders' positive results. Focus on them. And praise their results with all your heart, sincerely. It is praise that drives our conscious mind to strive for similar results. One more thing. If somebody managed to reach wonderful results, so will I! All this is real, and I just need to try my best! Just need to make a little more effort!
Patience, persistence and wisdom - these are the three children of success in any area!
Alexei Morozov, Head of the Price Range Break Department within the Faculty of Flat Break; Automation; Auto-Trading.
