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Mentality and Focus

“The challenge is not your trading, it is your mind.”  

When trading, it is vital that you are focused and mentally clear. That means you are free from frustration, anger, sadness and even excitement as these emotions can affect decisions. Emotion can impact decisions and ideally you want mechanical style trading based on clear analysis of the current market. But how do you remove emotion?  

A highly valuable ability and practice that you could implement to your daily life is meditation. Effectively the practice of clearing your mind, meditation allows you to be more focused and gain clarity in tough scenarios. This won’t just help your trading, it will help most areas of your life in terms of your response to daily situations. 

Trading is a process driven activity, analyse the markets, identify opportunity and place the order. Over and over again. Nothing more nothing less. Reducing emotional response will help to increase your performance and reduce errors and poor decisions. 

There is an incredible book called Trading in the Zone by Mark Douglas that helps to provide a level of mental clarity when it comes to repetition of the trading process. You might like to buy the hardcopy or an audiobook version to listen to. Ideally, listen or read this one a few times to really let the information sink in.  

A big part of being consistent and focused can be assisted by knowing what you are doing works. Without knowing your real statistics it can be tough to stay diligent. It is highly recommended that you go through the Robots section and run through a test in the Strategy Tester to help you see long term results based on history at the click of a button. This way you can see data, win rates, maximal drawdowns and so on to help you see how the market works long term. The other thing you can do that will provide incredible insights, is check out the Resources page for reporting tools. Reporting tools allow you to apply filters to your trading, so that you can see what is working and what isn’t. This can help you clinically refine what you are doing and allow for an even higher level of clarity and focus.  

While not directly relevant to trading or investing, your mentality is linked to your physical health to some extent. Make sure you are taking care of yourself. Your body creates more chemicals and resources for you than most people could easily list, and keeping fit and providing the right nutrients is critical to allow you to perform at your best, think clearly and have a strong and focused mentality. Physical exercise is imperative to a healthy lifestyle and allows you to practice discipline in areas other than trading. 

With a poor mentality or even the slightest slip in your decision-making abilities could mean months of profits getting wiped due to one poor decision. Strength, discipline and focus is highly important and is not something that should be ignored.  

To be at the top of your game, you need to find each and every way to get the upper hand and perform at your absolute peak.