Do the hardest work first. The greatest performers in any field delay instant gratification in pursuit of their ultimate goal, which is to be the best they can be while pushing through less than comfortable situations. For me, the hardest work is determining a loss target. I firmly believe that the very best traders determine where a loss is to be taken before determining where money can be made. It is difficult to consider how much you are willing to lose before you consider the instant gratification of adding to your bank account. But it has to be so. Accept a loss and delay the gratification of instant money for the reward of a lifetime of income.
Practice intensely. “Ninety minutes appears to be the maximum amount of time that we can bring the highest level of focus to any given activity.” It is very important that athletes and musicians in particular practice and practice intently every day but there are limits and the need for adequate rest. How does this relate to traders? For me I trade off bigger charts, such as the daily and weekly, along with one intra-day chart and by so doing I allow myself plenty of time to do other things, such as write this blog. For others, such as day traders, it is just as important that time is spent outside the charts, refreshing the batteries. In fact, I am sure most of you would agree that when we walk away from the charts for a while we tend to see them with better clarity when we return. Trade intently but take a rest. The market will be here when you get back. I promise.
You have to do the mental work to let go of the need to know what is going to happen next or the need to be right on each trade. In fact the degree to which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader. Mark Douglas The most successful traders have found a way to inoculate themselves from the stress of trading, and from the outcome of their most recent trades. Here’s how they do it: They have an unshakable belief in the fact that 1) While the outcome of any given trade is uncertain they believe in their edge over a series of trades. In other words they know the expectancy of their method and have confidence that over a series of random outcomes, the odds are in their favor. 2) Anything can happen! In other words they have learned to think of every trade like tossing a coin – they don’t need to know what will happen. They don’t expect to either win or lose. This firm belief in the uncertainty of any given trade, while knowing that over a series of trades you will be profitable, is very liberating. When you learn the mental discipline of letting go of the result of any individual trade you keep your mind in a state where it can easily perceive the opportunities that the market is offering. It is not distracted by focusing on your expectations of what you think should happen – it can perceive what is most likely to happen. The Body/Mind Connection
