8 Steps for shifting to a “Trading to Win” Mindset

This was originally posted up as an answer to a response to this article. However to ensure that others could benefit from the information shared I have added it as separate post.

The question was what steps can be taken to move from a “Trading not to lose” mindset to a “Trading to win” mindset. As with mostly anything in life, the simple things often work best to at least START shifting the mindset in the right direction. However, although some knowledge can lead to one acting, only continuous practice of doing the right things will reinforce better ways of thinking and being as a trader. A Traders Wisdom only comes through DOING what is right. Conscious doing can lead to the first few steps, but for one to stay on the path they must be able to shift this to their unconscious.

Here are few suggestions:

1. Clearly define your Risk per day, so you know what you are willing to Risk (lose) if things don’t go well. Embrace Risk and Love it because its all a part of the game!
2. Clearly define your Goal\Objective for the day. Generally 1-2% of account per day as a goal is good for a day trader. Matching the risk with objective is a good idea, or aiming higher than what you plan to risk.
3. Never take more risk than you can afford with your account. I usually recommend traders risk no more than 1-2% of their account for any give day. If you hit the risk limit then you stop trading, otherwise you must stay Fully Engaged and Focused in reaching your Objective\Goal for the day and consciously trying the trade to trade well, whilst following the plan to the best of your ability.
4. Visualise you day and how you plan to trade before the market opens, and with each opportunity Visualise in you minds eye what you want to see if you are right with your trade idea.
5. Also know what you don’t want to see in advance so that you can get out if it doesn’t look good.
6. Understand that the market is Uncertain at all times, there is No certainty, so never look for it. EMBRACE Uncertainty.
7. Fully accept that every trading opportunity is just an idea, it can just as easily be right or wrong. if it looks right work the trade the best you can, if it looks wrong cut your losses. An old adage but very important to practice, and not just know.
8. Continuously build Belief and Confidence in your plan, and the concepts\ideas that you trade. I fully believe in Auction Market Theory principals and the power of Volume Profiling, as well as the use of order flow. That’s what helps me trade well with the tools. If you don’t believe in the way that you trade then its difficult to make money.

I’ve course there is much more that can be done, but these are just a few of things that I practice daily to keep me on top of my game.

Kamd Dhadwar – Owner L2ST

This entry was posted in Trading Psychology. Bookmark the permalink.

4 Responses to 8 Steps for shifting to a “Trading to Win” Mindset

  1. uri says:

    thanks again
    there are 3 thing in the trading process ,that on the intellectual level are verey logical and understandable but to contain and to internalize it , is the problem :- Uncertainty in the market ,The outcome of the specific trade is randomly, so do not build expectations for the curent trade ,loss are inherntly part of the trading .
    overcoming on this 3 isusse are the greatet step as i see it .HOW ? I DO NOT HAVE THE AMSWER YET
    Uri

    • Kam Dhadwar says:

      The answer is simply: Acceptance by embracing all of this as normal parts of doing business as a trader. On a conscious level this is as easy as saying “yes”. If one knows to make it in this business they must DO THIS, they will find a way to motivate themselves to make it happen. However on an unconscious level underlying beliefs, values and attitudes may prevent one from making this a simple process. For this very reasons many traders will find that the journey towards successful trading is a more of a journey towards greater self awareness.

      The question one must ask is WHY is it a problem to accept this as a part of the trading business? when in any business you must also embrace uncertainty and the risk of losses?

      Highlighting WHY one may have any issues with any of this as a trader is useful for one to know to overcome it. Every individual may have a different reason as to why. You must practice acceptance of this, you cannot overcome it unless it is accepted as part of the business. You must accept the risk involved in trading and trade the plan the best you can. Uncertainty and losses are inevitable for a trader, you have no choice apart from accepting this. The issues arises for a trader when they are unwilling to accept these as the norm or have issues with accepting this. Many people are naturally risk averse, and in trading (or any business) you cannot be risk averse. An Entrepreneur must be a Risk Taker. At the same time the Risk Taker must manage risk well, and not be too risk seeking or become too careless when taking Risk.

      I highly recommend the following book “The Psychology of Risk by Ari Kiev”, which was very infuencial in ability to think correctly when it comes to Embracing and Accepting Risk.

  2. uri says:

    the trading force you to remove the masks that in ordenery job or circumstances they are ok and we have not even been
    aware of them at all/some of them.
    thanks for your reply .
    i will read Kiev book
    Uri

  3. L2ST says:

    Yes, trading is NOT an ordinary job, its a BUSINESS. However the task of actually trading daily can be seen as a job or part of the task at hand, but in this game you only get rewarded financially if you play well. Its much more like playing a Sport. Trade well, you get paid well, trade poorly … then you have to get better and come back and play again. The alternative is to play another game all together, and not trading. If a trader can see themselves like an Athlete rather than someone whom is just performing a job, you have a better chance of success. Think of what the BEST athletes do to stay on top of their game:
    – Stay in top Physical condition, Eat, Drink and Sleep Well.
    – Stay in top Mental Condition – Through Preparation, and lots of good mental and physical practice.
    – In the NOW – Do not get engaged to emotionally in the sport and the moment ,and emotionally balanced. They play in the moment, not tied to past experiences and possible future outcomes.
    – Stay focused on the game and get in the zone, when playing well.
    – Getting paid is a result of playing well.

Leave a Reply