Winning Trading Mindset: Thoughts to Internalize for Success

Having the right mindset is the key to success for any trader. After all, trading is also and above all a psychological matter. In this specific case, the mindset coincides with some positive thoughts, and obviously with the ability to follow up with coherent actions. We'll discuss it here, providing a brief overview of the relationship between trading and psychology, and listing some of the thoughts that should make up a trader's mindset.

Trading is also a matter of psychology

Trading is considered by non-experts, at best, as an activity of a purely technical nature. Certainly, it is not thought of as an emotional activity, or one that can be driven by the psychological sphere. Yet the latter has a significant impact on the speculative investment experience and radically impacts the results. The reason is simple: the stakes are by definition high, the market is by definition unpredictable. So the psychological pressures on the trader can be devastating. The pressures cannot be eliminated, they represent a physiological element. However, they can be controlled, kept at bay or channeled into a positive development. And the best way to do this is precisely to develop an adequate mindset.

The mindset of the winning trader

So, here is a roundup of "positive thoughts" that allow you to build a winning trader's mindset.

Trading is more similar to an entrepreneurial activity than to gambling

This is an important truth, which all traders with a minimum of experience have internalized. A little less so for beginners, or those who have approached trading by already taking some missteps. In any case, the conception of trading as gambling can remain in the background, and compromise the quality of investments. To all intents and purposes, thinking of trading as a bet is the best way to deprive the investment action of the necessary systematic approach and therefore increase the chances of losing. Moreover, the trading-gambling equation can lead to the development of gambling addiction dynamics, adding further damage.

In trading, defeat is a physiological event

Another important truth is that defeat is a recurring fact in trading, an essential element of the journey. The difference, if anything, is made by the "how much". It is pleonastic to specify that the balance must be positive. In any case, this "thought" is an invitation not to be discouraged when trades fail, but to include them in a path of growth and why not, actual gain. The goal is to adopt an approach that is as rational and scientific as possible to understand where the error was, if there was one, and to refine one's skills, improve one's ability to react.

Emotions must be managed even when they are positive

This is an important point and one that is often overlooked. Generally, it is believed that the only emotions to be managed, somehow to be put in a position not to harm, are the negative ones: anxiety, fear, discouragement, etc. In reality, positive emotions can do just as much harm. Obviously, we are talking about emotions that carry within them the germ of extremism, of excess. Euphoria after a victory, for example, can be dangerous, as it leads to an overestimation of one's abilities. The dynamic is similar to those often seen in gambling and betting contexts.

Organization is everything

Another very important and exquisitely mental aspect. Organization is basically an attitude, but it must be a work methodology. Organization in trading essentially means operating with a system. A trading system is a set of rules, and conditions at the onset of which the aforementioned rules are activated, involving all aspects of the investment activity: from the identification of entry and exit points to the allocation of resources, passing through analysis techniques. Operating with an organized system means removing discretion from the action, thus reducing the decision-making space at the moment when making decisions could be dangerous. Deciding when you are in the middle of the storm can lead to a dramatic loss of clarity. It can lead, precisely, to succumbing to emotions.

The training path never ends

Many make the mistake of not even doing it, the training path. They learn just a couple of notions and start investing, thinking it's simple, underestimating the pitfalls. It may seem trivial, but having completed a complete training cycle, perhaps even a long one, is a necessary condition for success in trading. After all, we are talking about a deeply technical activity, and therefore complex. But there's more, the path must be continuous. The market is only superficially always the same as itself. In any case, there is much to learn, new tools to master, solutions to find for the unexpected, etc. Like any complex activity, it requires an active and vigilant mind that embraces change. In this context, participation in communities of experts, or at least peers, makes a big difference. They represent a resource for sharing ideas, for enriching oneself, for taking on different points of view.