A List

I am continuing to review and work on things after last year’s less than stellar showing. As such I have been building a little ready reckoner of general points to adhere to and review.

Somewhat frustrating when the basis for this list was first written over three decades ago.

If you have any additions drop them in the comments.

 

Mental Relaxation

Prioritize a calm and focused mindset, emotional upheaval leads to costly mistakes. Trading in a distressed state alters the perception of market activity—price movements may seem exaggerated, leading to rushed decisions or second-guessing. Over time, this creates a negative feedback loop where poor results erode confidence, further increasing stress.

 

Actionable Steps:

• Take regular breaks to centre yourself, especially after intense market sessions.
• Practice mindfulness or meditation techniques to foster a sense of calm.
• Develop pre-trading rituals that emphasize relaxation and clarity, such as deep breathing exercises or journaling.

---

Physical Calmness

Mental and physical states are deeply interconnected. Physical tension, is reflective of mental strain, disrupting the clarity needed for sound decision-making. Conversely, physical relaxation can enhance mental tranquillity.

 

Actionable Steps:

• Incorporate stretching or light physical activity into your daily routine to reduce tension.
• Maintain a comfortable and ergonomic trading workspace to minimize physical stress.
• Pay attention to your posture and body language, ensuring a relaxed yet alert state.

---

Ongoing Self-Monitoring

Continuous self-awareness is crucial for identifying emotional and physical imbalances that may impact trading ability.  Regular “check ins” better equip one to maintain focus and composure throughout the trading day.

 

Actionable Steps:

• Set reminders to assess your emotional and physical state during trading sessions.
• Use a journal to document fluctuations in mood, energy levels, and activity.
• Develop a scale to monitor your readiness before entering a trade, ensuring you’re in peak condition.

---

Confidence

Confidence is key – overconfidence is fatal. Without it, hesitation and fear dominate, leading to missed opportunities or impulsive trades. Confidence stems from preparation, experience, and a belief in your ability to navigate the markets over the long term.

 

Actionable Steps:

• Build confidence by reviewing previous trades – what went well and why.
• Celebrate small wins to reinforce positive trading habits.
• Do not trade on days when confidence is low; instead, use that time to refine skills.

---

Managing Mental Images

Poor imagery sabotages progress by framing the market in negative or adversarial images. Viewing trading as a “battle” or “war” introduces unnecessary stress and fear, which can erode confidence and rational decision-making.

 

Actionable Steps:

• Replace negative mental images with constructive metaphors, such as viewing trading as a puzzle or exploration.
• Visualize successful trades and the process that leads to them, reinforcing a positive mental framework.
• Limit exposure to overly dramatic trading narratives or content that emphasizes conflict.

---

Optimism

Optimism is a hallmark of successful traders. An optimistic outlook fosters resilience, enabling recovery from setbacks. This mindset doesn’t mean ignoring risks but rather believing in one’s ability to adapt and succeed over time.

 

Actionable Steps:

• Practice gratitude for the learning opportunities provided by both wins and losses.
• Surround yourself with positive influences, such as mentors or supportive trading communities.
• Reframe challenges as opportunities to grow and improve.

---

Optimistic vs. Pessimistic Views

View wins and losses for what they are. Optimistic traders see wins as lasting and personal achievements while viewing losses as isolated and temporary events. Conversely, pessimistic traders see wins as fleeting and impersonal and losses as permanent and pervasive. This is a long game – treat it as such.

 

Actionable Steps:

• After a losing trade, focus on identifying actionable lessons rather than dwelling on failure.
• Keep a record of successful trades to remind yourself of your capabilities.
• Challenge negative thought patterns by reframing losses in a neutral or constructive light.

---

Focus

Staying present is critical in trading. Dwelling on past mistakes or anticipating future outcomes will cloud judgment, leading to missed opportunities or impulsive decisions. Intuition and discipline flourish when a trader’s focus is grounded in the present moment.

 

Actionable Steps:

• Use visualization techniques to mentally “reset” after each trade, letting go of past outcomes.
• Multitasking during trading is a recipe for disaster.
• Incorporate mindfulness practices that anchor you in the present, such as focusing on your breath.

---

Methodical Approach

A systematic and methodical approach to trading creates clarity and structure, reducing the likelihood of emotional decision-making. By breaking down analysis into manageable steps, traders can build a solid foundation for informed decision-making.

 

Actionable Steps:

• Develop a step-by-step checklist for analyzing market conditions and executing trades.
• Regularly review and refine your trading plan to ensure it aligns with your goals.
• Do not take shortcuts by committing to thorough analysis before entering a trade.

---

Restoring Focus

Losing focus is natural, but recognizing it early and taking steps to recalibrate is essential. A distracted trader is more prone to errors, so stepping away from the market to regain clarity can prevent further mistakes.

 

Actionable Steps:

• Step away from the screen when overwhelmed or distracted, even if it means missing potential trades.
• Reflect on your trading goals and the motivations behind them to reignite your sense of purpose.
• Engage in activities that promote mental rejuvenation, such as walking, meditating, or journaling.

---