200 SHORT TRADING PSYCHOLOGY TRUTHS

INTRODUCTION

Money management, system, and psychology are important matters of discussion as each plays a fundamental role in the trading conundrum. Consequently, there are numerous volumes of content out there on each of those three components. And quite often, the principles and concepts expressed in those content can be daunting and difficult to comprehend. While there is certainly value for some authors to maintain that illusion of complexity as it gives them credibility, and it makes their content appear bigger, better, and more valuable, it does present a major problem for the reader. It promotes analysis paralysis and it makes trading appear difficult, confusing, and challenging when it needs not to be the case. 200 SHORT TRADING PSYCHOLOGY TRUTHS

The idea behind this Trading Easyread content series is to take the concepts of money management, strategy, and psychology, and present them to you in an easy-to-read format, for free, or usually for the price of a coffee. I do extensive research for my content, and I also draw from personal experience as I try as much as possible to convey to you, simple, concrete, and straight to the point information that you can start applying right away. This is the kind of information I wish I had when I first started out, and I firmly believe that it will allow you to be light-years ahead in your trading journey!

TRADING PSYCHOLOGY

“Your biggest enemy, when trading, is within yourself. Success will only come when you learn to control your emotions.” Edwin Lefevre

While a proven edge and a sound risk and money management technique are important, psychology is what glues everything together. The reason for that is rather simple: Trading is a very tough profession as it requires us to take quick and often counter-intuitive decisions. And most of the time the quality of these decisions is affected by myriads of factors based on our current mental state – are we sad, happy, anxious, depressed; are we hungry, tired, etc. These decisions will also involve all of our beliefs about money, certainty, failure, right and wrong, and so on. When you’re forced into making quick decisions, if you are incognizant and unaware of your inner states, the strongest thoughts, feelings, or emotions are going to prevail. So to succeed as a trader, we need a certain presence of mind and an awareness of our inner states.

I don’t believe we should attempt to control our emotions, as the above quote suggests — if by this logic, “emotional control” suggests eliminating or suppressing emotions. Edwin Lefevre among others, although well intentioned are unknowingly responsible for the spreading of certain platitudes, conjectures, and fallacies that people take for granted. I have been trading for 8 years now and I still can’t figure out what it means to control emotions, or to trade without them. From personal experience, even though I’ve been trading for quite some time now, the emotions never go away completely. So, rather than “controlling them” we have to learn to sink beneath them. In other words, we don’t associate ourselves to them anymore. We become passive observers of our thoughts, feelings, emotions, in such a way that they do not impede our behavior anymore. By means of observation, we become detached from them!

The character of this conversation we’re constantly having with ourselves is by and large what engineers our results. Our worries and anxieties, self-doubts, and self-criticisms — they demand expression, and they will find a way to do so when we interact with the markets. Thoughts are necessary and we couldn’t navigate our lives without them but this automaticity of being lost in thoughts; of identifying with them, and not knowing that we’re thinking is really the root cause of our mediocrity. This is something that I address in my acclaimed Article, Paradigm Shift, which you will find an excerpt of at the end of this Article. I also delve further into the subject in my upcoming Article, Zero to Hero.

The good news is that there is hope, and introspection allows us to inquire about the nature of our mental occurrences. The short trading psychology truths you’re about to read came to me through my humble encounters with my own mind. I hope you can find them useful, more so insightful. Feel free to email, print, and share them at your convenience, but please do credit me for them.

Thank you!

200 SHORT TRADING PSYCHOLOGY TRUTHS

When losses can’t strip you from your well-being, you know you’ve matured as a trader.
There is always more to be learned from price action than from news.
Good trades become good memories; bad trades become good lessons.
When you lose money, it is human nature to want to make it all back twice as quick. Slow down, keep focused, and stick to your strategy.
Never trust a trading guru who claims to have all the answers.
To get long term consistency you must create your own system by absorbing what is useful, discarding what isn’t, and adding what is uniquely your own.
The over-identification to thoughts and feelings is what causes us to deviate from our methodology. Become a mere observer of your inner conditions instead of acting on them.
The first and best victory, for good traders, is not the money; it is to conquer the self.
Learn the ability to be happy unconditionally. This way the markets can’t take that happiness away from you.
If you are feeling uneasy about a trade, ask yourself the question: How would I place, manage, or exit that trade if it were to be the last I ever placed?
Trading mastery won’t be easy. It will hurt as you work towards acquiring skills. It will take patience, hard work, discipline, but it will be worth it!

Accept what you can’t change. Change what you can’t accept. In a nutshell, that’s the key to success in the markets.
Don’t look for your trading dreams to come true, look to become true to your trading dreams. Follow your plan; follow your rules!
Trading consists not in holding good cards but in playing those cards you hold well.
Anchor that in your mind:
— It’s a process
— It’s a process
— It’s a process
Trading success takes time!
If you are wrong but still make money, you are a trader.
It is not whether you win or lose on any particular trade but whether you make money over a set number of trades.
Winning in the markets is a function of habits. Unfortunately, so is losing!
Experience tells you when to trade; confidence allows you to do it.
The more you trade (a proven methodology), the luckier you get!
Trade what you actually see, not what you think you see.
As traders we have to be able to center ourselves; that is when we can see the markets with the greatest degree of clarity.
You cannot predict markets on a trade by trade basis. But you can control yourself, and that is the key to success in this field.
If you are going to become a great trader, you must be willing to pay a great price – sacrifice, hard work, and dedication. That’s the way it goes.

Follow your plan and not your fears.
Discipline in trading means doing what you should do rather than what you want to do.
Focus on your losses and you will have more losses. Focus on the opportunities and you will see more opportunities.
When you become an observer of your thoughts, feelings, and emotions instead of an actor, you will have control over your actions in the markets.
If you spend too much time thinking prior to entering a trade, you will never put it on. And if you do, you will do it at the wrong time.
Trading the markets is living a few years like most people won’t, so that you can spend the rest of your life like most people can’t.
The best traders are perpetual students of the markets.
The origin of most trading woes is found in the inability to manage stress.
Accept failure. Everyone fails at something; but do not accept not trying.
You can’t let winning trades or losing trades get to you. It’s a weakness to get caught up in either one.
Success in the markets is a function of our ability to do (or not do) things that are (or aren’t) in our best interest.
Be a confident trader, not a cocky one. There is a difference.
The more we do what we have to do in the markets — the more we follow our plan — the more it becomes part of who we are.
When in doubt, stay out!

Trade your set of rules, not your impulses!
It is neither your analytical skills nor your math skills that will make u a great trader. It is your determination.
Trade for the love of it, not for the money. Money is just a by-product and comes as a result of trading well.
Limits like fear exist only within the confines of our minds. Once we truly acknowledge this, we can work on being the best traders we can ever be.
Do not compare your results to others. If you want to see your biggest competition, take a look in the mirror.
Durable success in the markets is almost always a function of self-knowledge.
Enter every trade without giving mental recognition to the possibility of feeling defeated by losses.
Trade often:
— To minimize the impact of any single losing trade
— To build skills and refine your craft 3
— To make the probabilities work in your favor
Keep your size small:
— To reduce the risk of ruin
— To reduce emotional involvement
— To give you the chance to learn from your mistakes without major consequences
From the market’s perspective, every up or down tick is just information. You are the one putting context behind that information.
It is a bad idea to follow other’s trades. Learn to trade and trust your own system, time frame and objectives. Don’t wait for the fish; learn to catch it yourself!

Don’t focus on the individual fluctuations in your account. Keep this in mind: Winners, losers, what count are your long term results.
Winning traders execute their plan methodically, losing traders make excuses.
The purpose of trading is to make money, but if you focus too much on the money, you’ll end up shooting yourself in the foot.
In essence, if we want to improve our trading, we must adopt consistent actions.
At the end of the day, the markets don’t owe us anything, so don’t attach your well-being to them.
Never mistake luck for talent. Know your methodology and adhere to it by all means.
Before everything else, preparation (prior to market open) is the secret of trading success.
Sometimes the best trade is no trade!
There is no opportunity without risk. Understand this, trade small!
Remember, if there is no set ups, do not force any trades. Go fishing!
The markets can’t hurt you. Only you can!
A good trader is someone who recognizes that he cannot predict the markets.
Overtrading doesn’t exist for someone who trades a proven methodology.

If you are looking for a Holy Grail trading system, stop the search, there is none! You are the key to the trading conundrum. Mastering oneself = $$$
If you feel uneasy or conflicted, it’s probably not a good idea to trade. Take the day off and reassess!
Without self-discipline, trading success is impossible, period!
Trading is meant to be a challenge, and challenges make you grow.
Those who can free themselves from their thinking will surely make it in the markets.
In the end, the monetary gains aren’t the real prize. The journey is!
In trading or in life, never compare your chapter 1 to someone’s chapter 20…
Great trading stems from great trading practices.
The way to trading mastery is not in the myriads of systems. The way is in the mind.
Can you make money in the markets? Yes! Is it easy? Hell no! It will involve all your beliefs about failure, money, being right, uncertainty, etc.
Trading mistakes are a function of the internal dialogues we have with ourselves. Trading mastery is the kind of dialogue we don’t have!
How can you expect consistent trading results if you don’t have consistency in your life.
Do not dwell on past trades; do not dream of future trades. Concentrate the mind on the current trade.
As traders, our biggest problem is our thoughts. Reduce the thinking to the bare minimum!

Good trading will make your day or week, but it takes entrepreneurship to make a trading career.
Successful trading is a function of the kind of habits you have. Unsuccessful trading also! You decide which one you want.
If you can’t turn your attention inwards, you can’t be a trader. Simple as that!
We cannot flow with the markets when we are too much in our heads.
We all have dreams of making enormous amounts of money in trading. But it takes a lot of determination, dedication, and discipline to make that dream a reality.
No matter how long it takes for you to become successful in trading, if you work hard at what you love, you are still lapping every couch potato.
Trading is a game of inches. Everything that contributes to providing us with an edge shouldn’t be ignored. Sleep, nutrition, hydration, exercise – all these things matter!
Maturity as traders is when we are able to detach ourselves from our ego. This liberates our potential to trade from a care-free mindset.
If you are trying to become a successful trader, there will be roadblocks. I’ve had them; everybody has had them; but obstacles don’t have to stop you.
Trading success is never permanent, and failure is never final. Enjoy the journey!
Trading should be made as simple as possible, but not simpler.
If there ever existed no possibility of failure, then trading success would be meaningless.

If you want to outstanding results in the markets, you have to be willing to fail.
The pessimist trader complains about unexpected market action; the optimist trader expects it to change; the realist trader adjusts…
Trading to the best of your abilities at this moment puts you in the best place for the next trade.
The good trader is a doer, not a dreamer!
Don’t compare your results to someone else’s. You can never be another person; you can only be a better version of yourself.
The difference between a pro trader and an amateur lies not in their methodology, not in their knowledge, but rather in their ability to follow their set of rules.
We, traders, either suffer the pain of discipline or the pain of regret.
Your motivation to succeed as a trader must be absolutely compelling in order to overcome the obstacles that will invariably come your way.
Nothing is ever wrong. There are no mistakes; no failures. We learn from every step we take. Whatever you did today in the markets was the way it was meant to be. Find wisdom in your every action!
Every success story in trading is a tale of struggle, reassessment, and adaptation.
Your beliefs about myriads of things have the power to create your success in the markets. It also has the power to destroy your account.
It is the worry that gets you, not the actual loss.
You must expect failure as part of your trading journey. Failure and success go hand in hand; you cannot have one without the other.

We need emotional intelligence when trading the markets. It is not all math and logic. And that is what makes it challenging for most.
Trade well in the present and your future results will take care of themselves.
Don’t just read trading Article and blogs. You may be entertained by them, but you will never grow from them without practical application.
As a trader you must face your fears and limiting beliefs about money, certainty, being right, etc., to develop your self-belief.
Luck is predictable in the markets. If you want more luck, take more chances. Be more active. There is no overtrading if you have a tested methodology.
Successful trading is a matter of waiting for the right moment to act.
The point is not to avoid trading losses but to go through them with stability.
If you want to trade for a living, decide today that you won’t give up on your dreams and keep pressing.
Understand that there is no greater wealth in this world than peace of mind. Work on that instead. Money will take care of itself.
You will never trade consistently until you change something you do daily.
Your goal is not to be better than the other trader next to you. Your goal is to be better than the person you were yesterday.
I think all traders should find the time to sit in meditation for 20 minutes a day — unless they don’t want to, or they’re too busy, then they should sit for an hour!

If you are not a risk taker, you should get the hell out of trading.
However many trading Article you read, however many traders you follow on social medias, what good will they do you if you do not act?
It is the trader’s own mind, not the markets that causes him to lose.
Markets are responsible for 10% of what happens to you. 90% is how you respond to it. That’s trading in a nutshell.
As traders, we’ve got one job, and it is to get better at what we do. Forget the damn money already; it is causing you to shoot yourself in the foot!
No one can bring us trading success but ourselves. We, ourselves, must walk the path.
Keep calm. You will not be punished for your anger and frustration; you will be punished by them!
It is imperative to make your trading decision before you enter your trade, before you are subject to the wild emotional swings.
Trading small will help you keep emotions in check. You will have plenty of time to increase your trading size once you become a competent trader.
Be sure to put on many small trades and carefully document every entry and exit. Good records allow you to learn from experiences.
— An edge in the markets
— Emotional balance
— Capital
If you don’t have these three, don’t compete!
Even though we talk about “trading the markets”, we can only trade our rules. So trade them well.

Every time you choose to perform a good or a bad trading habit, it’s a vote for that type of identity.
The longer you trade, the more you learn — practice will make you a better trader.
Believing that markets will conform to your expectations on a trade by trade basis will be met by sheer frustration, disappointment, and ruin.
You have power over your mind — not the markets. Realize this, and you will improve your trading.
People erroneously see trading success as an event. It is not! It is a process!
If you know neither the markets nor yourself, you will succumb in every battle.
Fear, greed – these only exist in your mind! So when you practice staying outside of your head, that’s when you begin to see markets objectively.
If you have lost money today, think of what a privilege it is to be able to participate in this game. What challenges us makes us grow.
Discipline as a trader means doing what you should do rather than what you want to do.
Anyone can call himself a trader; however, a good trader shows what he is really worth when he is tested by the markets.
If we want better trading results, the quality of our decisions has to improve.
Never give up on a trade until a risk management stop-loss has triggered.

Desire is what gets you started as a trader; discipline is what gives you results.
You will rarely catch the top or the bottom, so most of the time be content with a chunk out of the center.
If you know the markets and know yourself, you need not fear the result of a hundred battles.
Most people dabble their way through trading, never deciding to properly test and master a particular trading strategy. Big Mistake!
Experience is knowing when to enter a trade and when to exit it. Skill is knowing how to do it. Virtue is doing it.
Don’t blame markets for your decisions. Take responsibility, your trading will improve.
Nobody’s a natural at trading because all of this stuff is counter-intuitive to our nature. You have to work hard to get good at it.
Once you choose to accept yourself as a trader, then, and only then, can you work on being the best version of yourself that you can ever be!
The function of risk management is not only to preserve your capital; it’s also to protect your emotional well-being.
Be thankful if trading is a little harder than you’d like. A chunk of coal cannot become a diamond without heat and pressure.
Traders who accept that the future is unknown generally don’t personalize their positions and cut ties quickly.
Don’t give up what you want most (market success) for what you want now (short term emotional gratification).

When you embrace uncertainty that is when markets start giving to you, instead of taking from you.
Trading is a very psychologically rewarding endeavor because it often looks like it cannot be done.
Trading success can be a function of two things: Luck, or skills. One can leave you in an instant; the other is more durable in time.
It is not a problem to make trading mistakes; everyone does, but it is a problem if you don’t learn from them.
Losing traders think they have all the answers. They can’t learn because they’re busy telling everyone what they know.
Being a trader is ultimately an act of competing against yourself. It’s about self-improvement; about being better than you were the day before.
Good traders come in each day with a plan formed outside of market hours. They know their levels; all they must do is “click”.
Only to the extent that you expose yourself over and over again to trading losses and failures, can that which is indestructible arise within you.
It is much easier to trade fearlessly when you embrace failure as your teacher.
Trading success isn’t the key to happiness. Happiness is the key to trading success. If you love trading and work hard, you will be successful.
It is ok to admire someone else’s trading results, but never compare them to your own. We all trade different time frames, methods, and beliefs.
To become a trader is to study the self. To study the self is to forget the self.

Show me a trader who has never made a mistake, who has never experienced failure, and I’ll show you someone who has never achieved success.
The goal of a good trader is not to make money but to trade well. If a trader trades well, money will follow.
Every trading decision you make is not a decision about what to do. It’s a decision about who you are!
Traders: above all, enjoy the ride!
The market itself is your teacher, and you are in a state of constant learning. Accept the lessons with grace.
If when you lose on a trade, you learn from your mistakes (if any), and it motivates you to work even harder, you’re onto something!
Knowing the game is not enough, we must apply. Willing is not enough, we must do!
To improve as a trader is to be open to change.
Discipline in the markets is the bridge between goals and accomplishment.
Trading success is an iceberg. People only see the top. What lies beneath is failures, mistakes, losses, persistence, and hard work.
Adversity causes some traders to break; others to break records in terms of results.
It is ok if you trade and lose, but it’s not ok if you fail to trade. Success comes when you take your chances. Stay active, trade small, and keep learning.
If you follow your dreams and spend your life doing what brings you
joy, you are more likely to find success.

Our health always seems much more valuable after we lose it. Don’t make trading the center point of your whole life.
Money is just something we need in case we don’t die tomorrow. Trade for the love of trading, not for the love of money!
If you assume that your excellent math and analytical skills will automatically translate into success in trading, you are dead wrong!
The mental resistances you fight in the markets and the ones you fight in life are one and the same. Once you prevail over them, you take control of your life.
The voice in your head that says, “You can risk it all on that one trade” is a liar.
Winning in the markets can be a function of skills or luck. If it comes through luck, take the damn money and run! If it comes through skills, rinse and repeat.
Success in the markets isn’t something that just happens. It is acquired through sheer perseverance in the face of failure.
Everyone gets their ass handed to them by the markets at some point. Only the best get back up.
If trading success is important enough to you, you will find a way. If it is not, you will find an excuse.
If you believe enough in your trading process, success will come to you. You just have to be willing to see it through to the end.
New traders: don’t find the time to research the efficacy of your system, make the time!

Losses are intended to make us better, not bitter!
Never let a winning trade go to your head, or a losing trade to your heart.
Be decisive in your trading. A wrong decision is generally less painful than indecision.
Durable success in the markets isn’t given. It’s earned!
Trading opportunities are like taxis, there’s always another one coming. Don’t get attached to any single trades.
In the markets, we will act consistently with our view of who we truly are, whether that view is accurate or not.
After each trade, I want to be able to say “I executed the trade to the best of my abilities.”
There are two types of traders: Those who truly desire success and those who are trying to avoid failure. The question is which one are you?
First rule of trading: everything is your fault! The sooner you accept this, the sooner you can work on improving the quality of your decisions.
As a trader, your job is to befriend uncertainty!
If you struggle with losses, ask yourself this: What’s the worst thing that could happen as a result of those losses? Your answer should put a stop to your cataclysmic thinking.
In the end, trading is simply acting on what you can control as opposed to acting on what you can’t control.
A good trader knows himself and works on leveraging his strengths as opposed to fixing his weaknesses.

Profits, although amazing, don’t teach you much. Losses are the real prize!
Remember this: It’s not how you start; it’s how you finish! You can do this; you can be a successful trader. Don’t give up!