Continuing on where we left off on the last trading psychology journal entry, we delve deeper into the mind to understand what makes us successful traders and what stops us from achieving that success we want. We must always remember that fear causes our focus of attention to narrow onto the object of our fears so that we end up creating the very experience we are trying to avoid! The key then is that we have to learn how to trade from a care free state of mind. So that we no longer have the potential to define and interpret market information in painful ways. The information itself is not threatening, it’s the interpretation that makes it threatening.
The key to trading success therefore is to think in probabilities. Believing at the very core of your identity that:
1. Anything can happen
2. Every moment is unique
3. There’s a random distribution between wins and loses
4. You don’t need to be perfect with your analysis every time to create consistent results.
You must understand that no matter how good your analysis is, there will be mistakes on your part and sometimes the market will move differently than you thought and you don’t know when that will be. You will also find yourself in different states of mind, some will be helpful and some will be harmful to your trading. You will try to control these states but they will happen randomly to you. What you must count on is your trading rules, ability and skills in analysis to make you a winner in the long run. You put the probabilities on your side by trading alongside the institutions so let that do the work for you!
Magic Trader
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