GETTING YOUR MIND RIGHT
One’s chances of progression and success with trading development is strongly correlated to one’s perception of self, and general state of mind. Many individuals begin their quest for trading proficiency by seeking to adopt any and everything new: from new markets to new tactics, from new indicators to new recommendations. But not more than a very few beginner traders eventually get to realize that, to a great extent, a traders’ development begins with the negation of erroneous beliefs and attitudes.
Before a new trader advances into the broad learning categories of trading psychology and market knowledge, a ‘self-assessment and personal adjustments’ (SAPA) should be conducted, with aim of identifying and correcting beliefs, habits and attitudes that could hinder one’s development as a trader. Below are a few lines of perspective that may be of relevance and support to your SAPA process.
- A healthy lifestyle is the best of lifestyles. The aspiring trader should make a habit of eating and drinking healthy, in addition to exercising as often as possible. Maintain a healthy distance from fast-food outlets, avoid high sugar and salt intake, and keep alcohol consumption to a minimum. The traders mind must be as clear and relaxed as possible.
- Always believe in yourself and be positive. Believe you can achieve great success.
- Sidestep negative individuals (even those close to you) on matters relating to business and wealth. Negativity can spread like the cold: and you can catch it. Don’t let any individual distract you from achieving success.
- Always hold yourself accountable for your financial reality; don’t blame your family, friends, or the government.
- The average person does not make money, because the average person does not invest in anything.
- The government is neither your family member nor your friend. Politics is a game; hope on political interventions to ease your financial distress.
- Quit being average: dream big, think big.
- The days of secure jobs with securities are gone. Most major corporations (governments and banks) are heavily indebted.
- Be mindful of media content intake, for it is intended to induce fear and unease. Don’t let fear take control of your mind.
- As an employee, you are nothing but a number. Employers work employees until physical and or mental exhaustion. Working for yourself might be a better option.
- Tough times show character. Success in life is nothing more than a decision away.
- Always make good use of your time. Stop waking up late; get into the habit of waking early.
- Until you achieve success, don’t waste time with partying and other distraction that have nothing to do with success. Direct your time and energy into development of your craft.
- If you’re the smartest person in the room, you’re probably in the wrong room.
The SAPA process is all about getting your mind right for success, and there is no time limit within which you ought to get it completed. In fact, time of completion should be of secondary importance. For some individuals, the self-assessments to be conducted might present the need for certain types of adjustments that could only require a few days or weeks to achieve; for some other individuals, the adjustments required could take months to achieve. Either way, what is most important is to identify what needs modification, followed by a structured approach to implementation.
Perhaps you are still somewhat unsure about how to commence with the SAPA, or how to think through your own unique requirements. Let us approach some more related considerations from a different perspective.
SAPA – And the Analytical Mind
There are three main types of analysis that can be utilized in trading (be it stocks, bonds, forex, crypto, etc), namely: fundamental analysis, technical analysis, and sentiment analysis. There are successful traders who are primarily focused on utilising one of three types; and then there are those who utilise two or three of three types of analysis. Which or how many types to use isn’t of consideration at this point in time; what is of importance to keep in mind is that professionals spend time in identifying what works best.
For instance, there are individuals who uphold a preference for working with data and facts above all else; and so, adopting fundamental analysis would be of natural preference to them. If such individuals where to trade purely from a technical analysis perspective, just one or two strings of loses could be enough for them to disregarding existing trading plans
SAPA – And Uncertainty Avoidance
There are some individuals who respond poorly to prolonged periods of uncertainty; if unable to monitor a situation for any period past a few short hours, they become really unsettled, and might begin thinking through worst-case scenarios. Once such a trait is identified under the SAPA process, the individual would recognise that day trading could be the best specialty to pursue.
In conducting your SAPA, keep in mind that trading is about execution; in fact, trading is execution. You need be in great shape (physically and mentally) to put together a sound trading plan, and even better shape to execute that plan.