Last time on the trading psychology series we touched upon some key points learned from the Mental Toughness sessions. I’d like to continue on that journey with some further insights I personally gathered after watching the sessions a couple times. One of the key points I took away from the sessions was the importance of looking at your trading in batches of trades. When we focus too much on the last few trades we took, we can get too happy with winners or too sad with the losers and these emotional responses will affect the way your mind will view the charts and will result in your analysis not being objective.
When viewing our performance in batches of trades our edge will ensure we will make money. We cannot focus our minds on taking winning trades but instead we need to take trades that fit our analysis criteria for a high probability trade setup.
Two important things we must be able to do?
1. Learn how to keep our mind focused in the moment before placing a trade and not allow it to tap into a previous moment in trading.
=> Problem is our minds are programed to think this way.
2. Not cause you to interpret and define the market in painful ways.
In essence, regardless of how well you do your analysis or how accurate you are, you will make mistakes and you will not know when you will make them, but by taking all the trades that follow your analysis and rules, you will know that you have the upper hand because your analysis will be correct more often than not.
Fear causes us to narrow our focus of attention onto the object of our fears so that we end up creating the very experience we are trying to avoid!