The NEED To Stay Mentally Positive Is VITAL

A member who has been a part of my trading service for a couple of weeks now had this to say:

Just wanted to say thanks for the service you provide I'm really learning a lot. I have not made many trades thus far but analyzing the trades nightly and stock picks has proved very beneficial. One thing I've noticed is that on losing trades and even losing days you remain positive. I don't think this is the case with most people. So, how do stay positive and do you think this plays a significant role in trading? Have a good weekend.

Jeremy.


Here's my response to his vitally important question:


hi jeremy. i am actually surprised that you are the only one to ever bring up this very important point. I sincerely believe that having a positive attitude about losing (and winning) is a key part of trading survival. I used to beat myself up all the time for missed trades or crappy performance but i found out that this negative attitude in a game where you will be losing a lot is NOT the right way to go about it. Trading is a game of streaks. You will go thru winning steaks and losing streaks. It is VITAL to be able to quickly recognize when those tides are shifting. When you are winning, you "see the ball" well and can almost see moves happening 2-3 plays ahead and you will have '3D vision' of the markets and trader behavior all around you and you will move in and out of plays with extreme confidence and professionalism. You are feeling it and you want to trade and the market is vibing with you and everything seems to be moving together in harmony.
However, when you are in a 'shaky funk' you will be slow to react/transition, a little stubborn and ironically your ego will make you break many golden rules of trading.

YOU NEED TO BE CONSTANTLY WATCHING YOURSELF, your body language, your tone of voice, your attitude and you need to quickly adjust any behavior that's hurting you(over trading, anger, revenge trading, trading with huge size etc). You need to be your own therapist, mental coach and motivator. You need to be hungry to win everyday even if winning means not trading. You need to be ALWAYS seeking to improve yourself, learning, adjusting your attitude, minimizing your ego and maximizing your drive to be better than the day before. Don't worry about the money, when you are trading well the money will find you, trust me. Take most care of your account when you are losing because the winning trades are waiting just around the corner but they are waiting for you to adjust yourself first.

Restoring Your Joy In Trading By Ryan Jones

I'm not a doctor, I'm not a psychologist. However, that
doesn't mean that I should not be aware of things that might
have an affect on my trading. Nor does it mean that I should
not make you aware, and even spark your interest in learning
more. So, in that context, let this email be the start of your
learning on this incredibly important topic...

What is the first thing I would suggest in restoring the joy of
your trading? Moderation.

When someone begins trading, they move forward with a
tremendous amount of zeal. They tackle the venture with every
ounce of energy and are happy to do so.

After a while, the excitement begins to wane. This is true
regardless of whether the effort has lead to success or failure
(90% + fail). After more time, it is harder and harder to keep
the excitement level up, and in order to maintain a higher
level of excitement, traders are constantly trying new
strategies. In other words, the level of excitement associated
with trading becomes almost like an addiction.

The brain is the most fascinating creation ever. The brain
releases chemicals based on certain stimuli that allows us to
experience pleasure. The stimuli can be something simple, like
reading a book, or something exciting like riding a roller
coaster. What happens is that as you experience something more
and more, you generally derive less pleasure from it.

Therefore, it takes more of that experience to keep the
pleasure level high. This is where addictions come from...and
you can literally become addicted to anything that produces
higher levels of excitement.

How do addictions occur? Not enough rest between the
experiences. Someone who drinks a cup of coffee once every few
weeks does not become addicted to coffee (caffeine). But if
someone begins to drink coffee every day, there is not enough
rest between the times caffeine enters the body and it becomes
addicted. With strong drugs, the addiction can occur the first
time because the reaction of the brain is so intense and
dramatic that it literally is shocked into addiction.

Email is a classic example of a moderate stimulus addiction.
Some people cannot go for more than a few hours checking their
email...and worse yet, some people believe that once they send
an email, if they are not responded to in a matter of minutes,
they have been wronged.

With trading, there is an excitement level generated with a
trade. There is an excitement level generated with a trading
strategy. There is an excitement level generated with finding
new trading strategies. The question is whether you are
trading to generate the responses in the brain, or whether you
are trading to succeed.

Most will know the answer to this question by simply doing a
quick examination of their recent trading history. One big
step to restoring the joy of your trading is to simply create
boundaries, commit to a trading plan and then stick with it, no
matter how boring it is after the first 3-months. Stop trying
to find the holy grail...moderate your time and attention spent
toward trading, take breaks, even vacations from it. I assure
you, you will begin to enjoy your activity more.

There is a lot more to be said about this topic, so stay tuned
for the next email...which I am not going to send you until
after the July 4th weekend. This weekend is a great time to
start creating your boundaries and taking some time off from
even thinking about trading.

And that is the Truth about Trading.