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The Mental Role When You Evolve as a Trader

They say that 90% of the business is psychology, and by that, they mean it’s your discipline implementing your method. I assume other elements of psychology (FOMO, chasing losers, etc.). Considering that the human mind is something we still learn, there could be elements that we don’t even know or aware of that exist. But, ee could agree that we refer to factors that keep us disciplined or those who sabotage us when we say psychologically.

So let’s assume for a minute that you build your system: Signal, profit, or loss. You obey the rules, and implement them with patience and place a trade only when the signal occurs. You will have to evolve your system to match the market structure and volatility at some point.
So the big question is, do you also adjust your psychology as a trader over the years? If you ever achieve your level of highest discipline you can, do you also evolve that? If so, how? Do you improve your methods and systems, or you also have to develop your discipline the same way? Curious to know what you guys think.



The above is an interesting topic that requires some thinking regarding how you maneuver between strategies and keep your discipline simultaneously.

To that end, I do not think that we should
never assume that our psychological composition for trading is conquered. And while I can get into a deep discussion about the human way of thinking, I would summarize it and say that individual thought versus crowd behavior will always be challenging. Our tendency to predict, be $ motivated, and other elements that cause impulsiveness should clarify that we always need to have a checklist and review our reactions. Whether you trade now or for the next 20 years, keeping a journal of your trades and your reactions is necessary.

@138Way, you are right. You would need to adjust or tweak your core strategy to changing market conditions. I am not implying that you need to replace strategies constantly rather adjusting targets and risk management (stops) according to the environment.
That in itself requires discipline and the ability to stay disciplined while monitoring the markets for ongoing changes in structure and volatility.

Second, to trade in different environments, you would need to grow your risk tolerance during volatile periods and have the discipline to realize that your targets would grow smaller when volatility is low. Those who expect to earn an “income” from the markets on an ongoing basis are misleading themselves. You have to grind through the choppiness and hope to gain when the market is reasonably volatile (some extreme volatilities present more risk than actual reward).

These two actions above would require lots of discipline and mental strength. Again, you evolve your mind and your strategies.

Despite all the markets I have seen over many years, I would never wake up one day and say: “I know the markets” because that way of thinking where you assume you have figured it all out is the same thinking that leads to a total loss. I know several traders that would be way above average, but their returns led to arrogance and letting the markets take it all back. They all thought they figured it out and have it all under control.

Stay humble, nimble, and continue to grow as a trader.
I hope this helps.


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Anyone can probably guess that I love this topic and any related to the mental side of trading and performance.

The mind is the same as a muscle, if we do not exercise it we will forget to do certain things, or even how to do certain things.

When we workout for a long period of time, over many months or years, we see the results physically with changes to our body. When we workout the mind over time, we start to see changes in how we respond to things or interpret them, thus affecting the reaction we have and the result.

By regularly meditating, focusing on our mind and making a conscious decision to exercise it, the results will compound over time and the things that used to be difficult now come much easier.

I do believe that yes, under many different circumstances we need to change our trading strategy and how we execute it, but the mind piece stays the same.

We still have to be patient, yet execute at different speeds depending on the market.
We still need to remain objective, but experience situations that are more difficult than others to execute decisively.
We still need to allow the market to give us constructive criticism, sometimes more often than usual.

The ability to maintain the core practices on the mental side will always, in my opinion, remain the highest priority. I know that if I rely on that process I’m smart enough to properly adjust my risk in volatile markets or adjust stops and take profits.

It is very easy to be in a flow then have the market change, which could be the worst environment for your style, and miss that the market changed or you’re trading outside of your optimal times. When that happens, often we fall back into negative dialogue or feeling defeated when we are doing the exact same thing as before.

Instead, if we stop and ask things like:

Is the market trading in a way that is conducive to my style of trading?
Am I following my system or did I fall off the wagon at some point today?
Based on what I’m seeing, removing yourself from trading and just observing the market, would I advise myself to be trading now?

When it comes to psychological case studies on things like priming, associations, beliefs, this is where I’m so intrigued. I’m no expert by any means and am constantly searching for things like this to improve my cognitive thinking and awareness.

I’ll post some brief examples of how I think real-world case studies can be applied to us.


:vulcan_salute: Yes!

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The trading exercise leads us to:
-molding our mind
-be more patient
-Find opportunities faster and easier
-understand situations
-be faster and faster in decision-making
-in choosing to create rules that favor and defend us to cut losses.
-See when is the right time to operate or when to stop doing it before a
possible change that the price has before it can harm us.
-Measure at all times the probability according to the scenario presented by the market,
which is a supremely important point, it is a discipline and a habit that must be
develop little by little, because it is the Trader’s chart.

It is that sense of smell that develops and refines us little by little.

There is always something new that we can create and fine-tune in our trading.

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