Trading is a special kind of activity. Therefore, the algorithms for achieving success that are often familiar to us in ordinary life do not work here. Why? Mainly due to the unpredictability of the market. If in any other field of activity the efforts made naturally bring results, then in trading, the expected result may never come.
Simply put, if a person goes to work and works conscientiously, they have the right to expect to receive a salary at the end of the month. In trading, even conscientious and regular actions do not guarantee profit. That is why those who seek to succeed in trading need to restructure their thinking. But how?
Key Characteristics Of A Winner’s Mindset
Let’s first analyse what traits a successful trader needs.
It turns out that to work in a chaotic market, a trader just needs systemic thinking. At first glance, it seems contradictory, but it is still true. A systematic approach makes it possible to predict market movements with a greater degree of probability.
Consistency of thinking is expressed in the fact that the trader will evaluate the market calmly and consistently, will not rush around the schedule, but will follow their analysis strategy and the rules established in it. This consistent and logical thinking is one of the essential ingredients for success in the market.
A successful trader does not become attached or cling to every completed deal. They understand that their goal is stable profit in the long term. And one deal, albeit unprofitable, does not play a significant role against this background. A trader mustn’t get emotionally involved in a trade and perceive a loss as a personal defeat. And from here comes another essential characteristic.
In the mindset of a successful trader, a loss is not a defeat — it is just part of the job. And this view of losses is fundamentally different from the approach to losses in business. If the loss of money there is bad for business, then in trading, losses are normal. The main thing that a trader should have is to make these losses controllable.
Drawdowns on positions or losses due to mistakes are an inevitable part of the job. And you have to treat them accordingly. A trader will show a mature approach to such losses by clearly prescribing the rules of money and risk management in their trading strategy. So they will achieve two goals at once — they will prepare themselves for losses psychologically and make them controllable.
3. Trade Fearlessly But Not Recklessly
According to the theory of a successful trader, Mark Douglas, winners trade fearlessly but not recklessly. What does it mean?
Fear is an emotion. It paralyses, interferes with making decisions, acting, or, on the contrary, provokes hasty and irrational actions. Therefore, in trading, fear is the worst enemy. Successful traders trade fearlessly in the sense that they do not allow fear to limit their trading decisions. But this does not mean at all that they take any risk and are not at all worried about the safety of the deposit. That would be recklessness.
When making decisions regarding trading, traders with the right thinking are guided by common sense, the rules of their trading system, and act according to the situation. They make decisions with a cold mind.
Correct Thinking Can Be Developed
It’s just a matter of time, your desire, and effort. Where to begin?
1. Start Planning
You can get started in your daily life. Planning helps to act consistently and develops systems thinking. Make a to-do list at the beginning of each day and rank the tasks in order of importance. Then proceed according to this list. Don’t let emotional outbursts break this sequence. At the end of the day, analyse what worked, what didn’t, and why.
By the way, in the process of such an analysis, you will notice that some plans did not work out for objective but unexpected reasons for you. This also happens in the market — even approaching it with a clear strategy, you may find out that something unexpected happened and the expected profitable deal did not turn out to be so.
2. Keep A Budget
It may seem like a small thing, but budgeting will teach you the basics of money management. Calculate your expenses and purchases, expect the unexpected — plan the amount for unforeseen expenses. When you come to the market, you will understand how wise it is to have funds planned for losses.
3. Trading Psychology
Read the literature on successful thinking. If you are planning to try yourself in trading or have already started trading, it will not be superfluous to pump your trading psychology and read several books about correct thinking. The work of Mark Douglas can be taken as a basis.
The correct thinking will constantly help you in Forex trading. For example, when you need to choose a Forex broker, you should pay attention to details and not only to the loud promises many companies make. You can first check the Forextime blog, which is extremely helpful and can provide you with numerous tips on trading in the United Kingdom.
4. Think Long-Term
We all tend to focus on small failures or victories, but trading successfully requires being able to play long-term. Your goal is a stable income, so today’s victory or defeat is not yet an indicator. Let go of these events, learn from mistakes and move on. By the way, the ability to forgive yourself for failures and easily step over them will definitely come in handy, not only in trading.
And the last moment, which cannot be ignored. Success in trading is impossible without realising and accepting full responsibility for your actions. Realise that no one — not the market, not the price, not your teachers — owes you anything.
Everything that you do on the market is your decision and only your responsibility. Understanding this will help you be more disciplined and emotionally balanced. So it all starts in the head. Develop a winning mindset, and trading will be much easier for you.