THE TRADER’S MINDSET

THE TRADER’S MINDSET

You must keep in mind that even with a tested and
profitable system, you could have numerous losses in a row. This is usually referred to as drawdown. Being aware that this can and will even- tually occur can prepare you to control risk and not abandon your trading system when drawdown occurs.

This confidence is an important ingredient in your mindset, one that you must develop in order to be consistently profitable. You are striving for a balanced growth in your trading equity curve over time. When you see that steady balanced growth, you’ll know you’ve developed the mindset necessary to be a trader.
Acquiring the trader’s mindset takes time and experience and generally occurs when you least expect it. Here’s a partial list of the traits you should develop:

■ Sense of calm when trading

■ Ability to focus on the present reality and not how you would like reality to be

■ Disregarding which way the market breaks or moves

■ The feeling that the money is not the point

■ Always looking to improve skills

■ Open-minded, keeping opinions to a minimum

■ Absence of anger

■ Enjoyment of the process

■ Trading one chosen approach or system

■ No need to control or conquer the market

■ No feeling of being victimized by the markets

■ Taking full responsibility for all trading results.