The tools/systems of a given trader, over time, converge to a set of tools. But what about the mindsets? Are there winning/losing mindsets? If yes, how could one describe them, quantify them, and be aware of them during trading? How do you document your winning/losing mindsets, and are there routines that would put oneself in a winning mindset before a trading decision?
The Trader's Winning Mindsets
- Thread starter tradingjournals
- Start date
Detachment, Restraint, Suspicion, Robotic Discipline.......
I have come to believe that trading styles are unique, much like fingerprints. Often, we try to adopt another trader's methodology, but when it doesn't fit our psychological profile/mindset, we experience stress, fatigue and ultimately failure.
IMHO, the key to successful trading is not to adopt a mindset to a trading methodology, but rather to adopt a trading methodology that is compatible with the existing mindset.
For example, I was a failure as a day trader. My mindset did not have the proper balance of risk taking and risk aversion required to thrive. I was too far over to the risk aversion side of the scale (I hated to lose money). But when I switched back to longer-term position trading I was once again successful, stress free and invigorated. Because my mindset is wired that way and the two are compatible.
Finding a compatible methodology to match a given mindset is not easy. It takes exploration and experimentation. There will be many failures along the way. In fact, in many ways it is very similar to dating. (Just cross your fingers and hope it doesn't end in a bitter divorce and custody battle over the kids
). Without this process, however, there is no way to learn the boundaries of your mindset. It is no accident that so many successful traders pay the "Trader's Tuition" (blowout their accounts) one or more times before hitting their stride. It is also no accident that this occupation is so challenging with such a high failure rate.
IMHO, the key to successful trading is not to adopt a mindset to a trading methodology, but rather to adopt a trading methodology that is compatible with the existing mindset.
For example, I was a failure as a day trader. My mindset did not have the proper balance of risk taking and risk aversion required to thrive. I was too far over to the risk aversion side of the scale (I hated to lose money). But when I switched back to longer-term position trading I was once again successful, stress free and invigorated. Because my mindset is wired that way and the two are compatible.
Finding a compatible methodology to match a given mindset is not easy. It takes exploration and experimentation. There will be many failures along the way. In fact, in many ways it is very similar to dating. (Just cross your fingers and hope it doesn't end in a bitter divorce and custody battle over the kids
). Without this process, however, there is no way to learn the boundaries of your mindset. It is no accident that so many successful traders pay the "Trader's Tuition" (blowout their accounts) one or more times before hitting their stride. It is also no accident that this occupation is so challenging with such a high failure rate.Quote from HFStartup:
I have come to believe that trading styles are unique, much like fingerprints. Often, we try to adopt another trader's methodology, but when it doesn't fit our psychological profile/mindset, we experience stress, fatigue and ultimately failure.
IMHO, the key to successful trading is not to adopt a mindset to a trading methodology, but rather to adopt a trading methodology that is compatible with the existing mindset.
For example, I was a failure as a day trader. My mindset did not have the proper balance of risk taking and risk aversion required to thrive. I was too far over to the risk aversion side of the scale (I hated to lose money). But when I switched back to longer-term position trading I was once again successful, stress free and invigorated. Because my mindset is wired that way and the two are compatible.
Finding a compatible methodology to match a given mindset is not easy. It takes exploration and experimentation. There will be many failures along the way. In fact, in many ways it is very similar to dating. (Just cross your fingers and hope it doesn't end in a bitter divorce and custody battle over the kids
+1. i learned this the hard way. i'm the exact opposite in that i shifted to a lower time frame (day from swing trading) and it's night and day. someone may be a horrible trader on one time frame but a great trader on another merely b/c it's the wrong time frame for them.