Take a moment to recall the last time you were so angry that your emotions got the better of you. Chances are, you reacted in a rash and irrational manner that perhaps you regret to this day. Under these circumstances, could you have made a rational decision that would have impacted others’ lives for the better? One of the most common traps many new Forex traders fall into is trading based on emotion. Their desire to win or fear of loss is so strong that it clouds their judgement and forces knee-jerk reactions. The outcome of this is rarely favourable. Bad trades are often reactions while good trades are decisions. Lacking a sense of control keeps us from achieving our goals and can hurt us in the long run. As a trader, how do you avoid becoming your own worst enemy, and turn into your greatest champion instead? Two words.
Mindset Mastery.
Mindset mastery is the ability to switch your emotions on and off, as and when you need to. If you have mindset mastery, you can manage your emotions, your fears, your greed, your stupidity, your procrastination, your deliberations and your paralysis through analysis. You’re able to curb these feelings and commit yourself to your plan. Once you’re able to master your mindset, I think anything you do becomes much easier – whether it’s trading, teaching, writing, performing a surgery or public speaking in front of crowds of thousands. Great breakthroughs are imminent only when you are able to overcome the internal barriers preventing you from being your best. I can honestly say that mindset mastery has made the biggest difference in my life – both personally and professionally.
Relating mindset mastery back to trading, 80% of successful trading comes down to mindset mastery. Around 10% of it can be attributed to the skills and experience accumulated over the years. This means my 20-plus years of trading experience equates to only 10% of a good trade. The final 10% is luck, for lack of a better word, as I don’t believe in luck. Rather, I believe in opportunity favouring the prepared mind. When you’re prepared, you’re able to identify and grab opportunities that arise. People have called me lucky when I make a successful trade but the truth is, that I’ve always been ready to seize opportunities.
Trading is difficult and arguably one of the most challenging endeavours because of the sheer emotional turmoil one must constantly face – the fear of loss, the fear of failure and the fear of being wrong. As a Forex trader, you need to be able to stay disciplined and committed to your plans. Above all, you need to be in control of your emotions through mindset mastery.
In his book, The Art of War, legendary Chinese general and philosopher Sun Tzu said, “Every battle is won or lost, before it’s even fought.” No matter what battles you face today, the key to victory lies within. It begins with mindset mastery.
Authored by Kenneth Kam
Produced by Callio Media