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Your Trading State of Mind

By: Brian Tran
Submitted: 2007-04-13 13:52:16
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The market is a cold and unforgiving place when you make mistakes or trade for wrong reasons. It'll take that reason and turn it against you. It may teach you to do it properly or don't do it at all. There are many traders who use their trading as a therapy unknowingly. How? They reflect their emotions and behavior from their real life into trading. If a trader is angry that day (or an angry by nature), chances are he'll trade like the person he is: aggressive and unreasonable. Being aggressive is not a bad attribute in trading but it needs to used in certain conditions (i.e. the market is trending smooth and stepping up size in the right direction is acceptable aggressiveness). But being aggressive randomly is sure to take your account down and out. Unreasonable is even worst, that throwing dice without thought and reason leaving to chance to decide about your money. Each personality has a weakness and the market will point out that weakness quickly. Unless we hide it away and put forward our strength, it'll be a bloodbath.

Whatever happens outside the trading room (trading hours) should be left outside. It's not an easy task to turn off a feeling or state of mind since we're all humans and we can't manage ourselves as well as we'd like. But if we can't turn it off, better not to trade that day.

But some traders have to trade every day as a way of making a living. How does one go about to overcome this deadly state of mind or put into a proper trading mindset to trade with high performance and consistency? There are several tricks or methods to change it quickly. Here are a few:  

1.. Using a physical cue to engage that emotion or state of mind. Many times a physical action we take change our state of being, such as sports. When we practice sports, the physical activity clears our mind and takes us to another level, mainly state of less stress, worry and anxiety. This cue can be learned. For example, you can practice smiling at the same time thinking of the wonderful time you had in the past. Or by pulling out a cue, the body fools the mind into thinking and feeling something else. This will quickly flushes out the bad emotion unwanted for trading.  

2..Using verbal cues to go into a desire state of mind. This may sound mediocre or cliché but the effect speaks for itself. Sport athletes use these cue every time before a major game or meet. Examples would be, "I´m ready to win today, my mind is clear and focused," or "I'm thinking of a nice sunny sandy beach in Hawaii with a nice drink in the hand and am relax and ready to enjoy the session." Practicing positive words with focus and concentration will eventually cue the mind to automatically go into that state when it hears these words.  

3.. Turn the trading environment into a sanctuary where a state of mind is turned on immediately. Many traders trade at home or trade at the office so it's a difficult to get a place where distractions are the norm. This can only create more stress than necessary. Learn how to cope with it or build a set of rules where limits (such as time limits or no trespassing in the office, etc) are set for others.

Many professional athletes and traders can turn these state of mind on and off on a dime by having practicing these over and over along with the real practicing (physical training or trading knowledge building). It is an essential training to go into the "zone" instantaneously. Without doing, it may take hours or days to get rid of this state of mind before that right state of mind back to be ready to trade. This is a waste of productive time. www.forexplane.com

Article source: Expert Articles