#psychologyoftrading #psychologyoftrading
For traders who want to educate themselves, knowing the behavioral patterns, thoughts and emotions associated with successful and unsuccessful trading will be a huge step forward. But knowing a pattern is different from acquiring and maintaining the motivation to change that pattern. The failure of many of our attempts at change, professional and personal, is due to motivation.
We only need to look at the sad experiences of people who have tried to diet, eat healthy, or exercise regularly to understand that knowing that you need to do something and actually doing it are two different things.
If journaling and tracking your patterns is just a routine exercise for you—just another item on your list of things to do—it won't motivate you, and you won't be able to continue your efforts. Maintaining the desire for change is difficult, especially when trading is going well.
Your self-development efforts can be judged by how hard you work on yourself when you earn money. It's just as important to work on yourself when you're trading well as when you're trading poorly. You need to clearly and accurately identify what you are doing right so you can do it more often and make money from it.
On the contrary, when you are trading poorly, you should not become discouraged or defeatist. Continue to journal and study patterns to stay positive even when all you can do is reduce your risk when negative patterns appear. It will still be progress.
An important source of such motivation in constant self-development is a strong sense of competition and an insatiable thirst for victory. All traders are different and their views on the market can be diametrically opposed. But the common feature of all of them was a strong competitive spirit. They competed with their peers, they competed with markets: but most of all, they competed with themselves.
The need for self-improvement is different from the desire to earn money and is much less common. The best practice for self-improvement is to not only summarize your best and worst trading patterns, but to write down and visualize the losses your worst patterns bring you and the profits you make from your best patterns. In other words, don't finish your journal until you feel an emotional connection to what you're writing about.
You will want to change your negative patterns when you begin to truly hate them and become disgusted with how far they are setting you back in your development. Abstract positive thinking will not get you far. Repeating statements such as “I will become a successful trader” is at best unhelpful and at worst self-deceptive.
The reason this kind of positive thinking doesn't work is because it doesn't relate to your daily trading behavior. What really helps is to associate the best emotional experiences in trading - the moments of greatest pleasure and achievement - with the specific practices that led to that pleasure. It's also extremely helpful to recreate the pain of your worst trading experience with the determination to never let it happen again.
We can maintain the changes we have achieved if the old patterns are completely unacceptable to us. When working on your journal, you must develop a special state of mind in yourself, and not just dispassionately describe what you are doing.
Good luck in your self-improvement, friends!