MENTAL FORTIFICATION

[Don_xyZ]

Trading is a difficult game to play and the vast majority of people fail miserably but shockingly it's not the technique/method/ strategy that's causing them to fail. In any competitive field in life, you have 2 parts that will determine whether you will succeed or not. The first one is the technical side and the other is about your psychology, your mentality. Sadly, this part is not much discussed so I think I'm just gonna focus on this side from now on. For those of you who don't know, I already have 2 threads that talk about the technical side:

Patterns Observation.
post148989#p148989

BONZ. Using technical indicators to trade.
post151670#p151670

Both threads discussed many different technique/ method/ strategy but the dividing line is the Pattern Observation thread deals with naked trading while the BONZ thread deals with trading using technical indicators.

God willing, I will do my best to put good stuff in here as I did the previous 2 threads.

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Direct link to each topic:


BELIEVE. post169739#p169739

THE CORRECT MINDSET post169740#p169740

CONVICTION post169758#p169758

BE NIMBLE post169897#p169897

YOU CAN BEAT THE MARKET. NO! post169898#p169898



Links will be updated regularly.

[Don_xyZ]

BELIEVE.

That is going to be the first of everything. You MUST believe that you will achieve it. Why? Because you are trying to go from the current you to the superb you. A transition, a change. If you are currently losing money then you must try to force yourself to check out traders that make crazy result. Why? In order for you to really change, you gotta shock yourself with something extreme. You can't bring someone on the verge of death due to cardiac arrest with something weak. You need the jolt of your life!

Now that you've seen people do it you gotta start believing that you can also do it. There are many reasons why people can't make money in trading such as:

1. Fear
2. Closing too early
3. Closing too late
4. Not knowing when or where to close the trade
5. Too stubborn
6. Rely too much on hope
7. Rely too much on others (trading signal, group trading, etc).
and many others...

Obviously, believing that you can achieve crazy results won't automatically make you actually achieve that result but your core, your fundamentals will change dramatically and you will become much more optimistic, opportunistic and more daring in dealing with the uncertainties in the trading world.

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[Don_xyZ]

THE CORRECT MINDSET

Repeat this at least 300x...

"I am just a tiny part of the forex market's trillion dollar daily movement!"

Know that you are nothing in this gigantic market! Even all of your money combined won't budge the market!

Most of the frustration from trading forex comes from the fact that you are trying to understand the market like you know how to make your cereal breakfast every morning.

Buddy, it just won't happen!

You will never completely understand how and why the market moves. If you're just starting out, the best thing you can do is to learn how to do 1 kick and use it when the opportunity comes. Master 1 technique and squeeze the market with it. However, even doing this won't prevent you from the occasional losses here and there. I can assure you that nobody in the trading world is immune to a losing trade so just relax because you're actually in the same boat with everybody and prep yourself for this reality.

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This kind of mindset will eliminate 90% of the psychological burden from your journey and you will see better result quicker. Also, this will help you stay in the market for a long, long time.

[IgazI]

. . the best thing you can do is to learn how to do 1 kick and use it when the opportunity comes.
Master 1 technique and squeeze the market with it.

Studies have shown that if you visualize yourself "shooting hoops" that it actually increases your accuracy when making a shot.

Bruce Lee didn't just throw his leg out there 10000x, he thought about: the rotation of the hips and foot, the movement of the arms, and the transfer of energy from the ground to the target;

people always blow me off when I tell them to sit down with paper, sit down with paper charts and notes, "map out your technique", visualize how you would have made money, "see yourself taking the shot";

instead, they mindlessly trade demo accounts, every day and trade is like every other, in one eye and out the other

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[TheRumpledOne]

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[kiwiarian]

There-is-more-honor-in-accumulating-little-by-little-than-in-reaching-for-the-sky-and-ending-up-flat-on-your-face..jpg

Exactly, if you have lower expectations you will risk less and stay in the game longer.

[Yirbu]

BELIEVE.

That is going to be the first of everything. You MUST believe that you will achieve it.

Very nice Don!
I'm really looking forward to this thread.

[Don_xyZ]

. . the best thing you can do is to learn how to do 1 kick and use it when the opportunity comes.
Master 1 technique and squeeze the market with it.

Studies have shown that if you visualize yourself "shooting hoops" that it actually increases your accuracy when making a shot.

Bruce Lee didn't just throw his leg out there 10000x, he thought about: the rotation of the hips and foot, the movement of the arms, and the transfer of energy from the ground to the target;

people always blow me off when I tell them to sit down with paper, sit down with paper charts and notes, "map out your technique", visualize how you would have made money, "see yourself taking the shot";

instead, they mindlessly trade demo accounts, every day and trade is like every other, in one eye and out the other

nap_time.jpg

Yes, agree 1000%.

There-is-more-honor-in-accumulating-little-by-little-than-in-reaching-for-the-sky-and-ending-up-flat-on-your-face..jpg

Of course. How much a trader is aiming is a matter of personal preference. Mental fortification benefits traders of every level.

There-is-more-honor-in-accumulating-little-by-little-than-in-reaching-for-the-sky-and-ending-up-flat-on-your-face..jpg

Exactly, if you have lower expectations you will risk less and stay in the game longer.

Nobody is forcing anyone to risk big or aim to the moon here or to risk less. Each side has champion traders to back their claims so it's a matter of choice and risk appetite.

However, if you know that it's possible to make a big profit with a small risk then you know for sure it is very much possible to make a smaller profit or risk even less.

On the contrary, if someone already think it is hard to make a small profit then he must check out traders who make consistent big profits. After this, he will start to think:

"if these guys can make crazy returns then I can too" or
"if those guys can make crazy profit then why can't I make a small profit even though I am using the same method?"

For many people, the problem is in their mental state not in the strategy itself. There were experiments done before where mentors gave the exact blueprint to their students and yet they couldn't generate anything near the mentors' profit. The students were no noobs. And then, you have cases where mediocre traders started making crazy profit after their encounter with their mentors and their teachings.

Anyone in this business long enough knows that it's much easier to change the trading strategy one after the other than it is to change one's mindset.

BELIEVE.

That is going to be the first of everything. You MUST believe that you will achieve it.

Very nice Don!
I'm really looking forward to this thread.

Thanks!

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[IgazI]

. . .Nobody is forcing anyone to risk big . . .

No, but one day I hope to have balls as big as yours

[Don_xyZ]

CONVICTION

Conviction is the difference between the pain from getting hit by Muay Thai kick and Tae Kwon Do kick. One is loaded with the intention to inflict maximum damage while the other is just snapping just for the sake of points.

Conviction is also the difference between Islamic Jihadists and other armies. One will take lives by suicide bombing the other will try to not die while taking lives. The only one comparable to Jihadist is the Japanese Kamikaze squad (literally means Godly Wind).

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The mentality is just different!

In trading, some people are afraid to take trades due to fear of losing money. The majority of people are afraid of losing the trading account. There are ways to deal with the capital like let's say you are only willing to lose 0.01% of your total trading capital per trade then just put 0.01% in your trading account and go full force. But that's not the real problem! Even if they put only 0.01% in their trading account they will never go all in! Why? It's their mentality!

Another example is if you want to achieve monstrous R multiple then you either use very tight SL and go for several pips or you use normal R multiple and then hold the trade long enough. But the problem is they are afraid to use tight SL or afraid to hold long enough. Why? You guessed it, it's their mentality!

More example, every trading strategy have stats to back it up. If the strategy has 65% win rate then you know that you will make money 65% of the time. Problem is, we don't know if it's 65% over 10 trades or 65% over 50 trades or 100 trades. Now what happen if you're already losing 7 trades in a row while in your mind you only have 10 trades as your basis for that 65% win rate? Most people will quit after the unbearable losing streak hits. Or if your strategy has 25% win rate but with high R, you must understand that there will be losing streaks as in multiple losing streaks before you make money. The problem is they stop trading when the profitable trades might come next. The losses freak them out. Why? It's their mentality!

Losing money is never sweet. But keep in mind that you are swimming with millions of other traders of different classes. Imagine a boxing match with no weight division. What's worse is, in boxing, you will only get into the ring after some experiences in amateur matches. In forex trading, there is no amateur matches. It's a battle royale! Everyone for themselves. You're going against the pros and billionaires and hedge fund and all those big dogs and dinosaurs. You are bound to take a losing trade! Anyone who says they never lose is a con artist! Ask anyone who have executed and closed at least 100,000 trades under their belt and they will confirm my statement.

First, you must learn the basics and then move on to a more advanced stuff and then gain as much experience as you can. Learn about trading method, money management, trade management, contingency plan, behavior recognition, market cycle etc. Learn from as many trader as you can and then use your brain to sort out all that information. After that, you must go with tiny live account. Make a trading journal to write down everything from why you lose, why you win, the market conditions at that time, whether there are news or not etc. Knowledge and experience removes doubt. Having no doubt boosts confidence. These are the steps to having a strong conviction!