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