With the right mindset, you will be able to win. Building the right mindset in trading takes time but starts with self-awareness. You are being aware of all the biases you have built or adopted from someone. The right trading mindset is understanding that today may not be good, but tomorrow will be better.
The following are ways to build the proper trading mindset.
- Become self-aware
As a human, you are filled with biases, either ones you experience or ones adopted from someone. Become self-aware, identify your biases, and avoid taking on someone else’s prejudice.
Traders, especially newbies, usually do not know where to start; they start reading books. People do not understand that books have a great way of influencing you. If the professional you read from has some prejudice or bias towards the trading system, you may unknowingly pick it up.
Being self-aware is realising the bias of authors, coaches and professionals while trying not to absorb or imbibe it.
- Tactically look at each trade
The market can be random. This is not to say fundamental or technical analysis does not work. But sometimes, a trader or investor with significant capital can fund a share or coin, making it rise higher than its value or the market demand.
Any method can be used to predict the market; sometimes, your prediction may work, but other times, it may not. When the market does not follow your prediction, do not assume the worst of yourself or your skill and become fearful.
The longer you are in the game of trading, the more you will realise that the perfect market analysis is how much an event, season or person can influence the market and move a stock up and down in price. It is much simpler to adopt a successful trading psychology and mindset once you realise that everything in trading is a game of probabilities with random outcomes.
- Tune out the noise.
There are many perspectives and market analyses available on the internet. Countless websites predict the activities market. It is your responsibility to understand what works for you and follow it.
Understanding what works for you will come from the research and education you get on trading. With this knowledge and belief in oneself, you must choose what suits you best. In trading, you have to think for yourself, trust your gut, and come up with original ideas—mute people who pressure you and try to change your course to theirs.
Research set your rules, and abide by them. In trading, you have to be intentional about not allowing other traders in the market to influence your choices.