Forex Articles - Positive Mental Attitude

PMA, maintaining a Positive Mental Attitude regarding your positive expectancy

Sep 9 • Forex Trading Articles, Forex Trading Training • 2501 Views • No Comments

Now before you switch off having read the title thinking; " here we go, another 'happy-clappy' you can change the world type PMA trading article" that's not the intention, bear with me..

As individual traders we are (at heart) entrepreneurs, we often forget that simple fact, particularly when we get discouraged. We are running our own perfectly formed micro business opportunity and can operate our business with; a relatively small capital balance, an iPad or net-book and a wireless connection, that's a huge positive. However, here's a negative; there's no other business that can 'hurt' like trading and it's during those low reflective moments of introspection that we should take time out to rationalise our emotions and re-set our trading mind. Hmmm, that last bit sounded a bit like the psycho babble we want to avoid so let's fix it by paraphrasing my eighteen year old Daughter; "you need to get your 'nut' back in the game"..

Being positive is an attitude, it's not a feeling, it has to be learned. It's a state of mind that has to be self-induced, you have to teach yourself positivity in this game. If you haven't got a winners' mentality then you need to start developing one and quickly, it's as crucial to your future trading success as your strategy and money management. To use a phrase I use when my older kids are going after opportunities; "you're ready, you've got what they want and need, now get into character and take the opportunity before someone else does". Training yourself to have a PMA towards your positive trading expectancy won't come overnight, compare it becoming a black belt at a martial art; it takes years and many martial artists testify that only when they reached black belt status did their learning really start.

Now I'm a glass 51% full kinda guy, an optimistic realist. I've met permanently shiny 'happy' people who appear to be made of the shiny crystals they swear down have given them their positivity. Being in their company can be as equally emotionally exhausting as being around a room of football supporters in a bar after their team's been relegated, so my cynicism antenna vibrate furiously when confronted by the typical amateurish neuro linguistic programming speak. Particularly If it's done by amateurs who are as likely to leave your head in a complete mess as opposed to being left in the clouds doing some 'blue sky thinking'. But I have to confess I'm actually partial to certain phrases and trader 'mind help', particularly if it immediately resonates and permanently lodges in my grey matter remaining at the forefront of my trading mind. There's a question I force myself to recall at the start of every trading day, the question is; "what's the worst that can happen?

The worse that can happen today is that I'd lose 5% of my trading account. That's the built in default 'time out' risk my trading plan has. If I breach that I simply stop trading for the day. Bearing in mind I'm a swing and position trader, risking no more than two percent of the account per trade, I'd need on average three losing trades in a series and to be exiting the third before it's hit the hard stop in order to lose 5%. I can confidently begin the trading day knowing that that's my low. So the worst thing that can happen is I lose money, I'll survive, my business won't be bust, there's no external outlier event that can kill my business, I can trade confidently knowing I'll still be in the game.

The market is an external force, you can allow yourself to let external factors control you, usually causing a negative attitude, or you can choose to achieve and sustain a positive outlook. Here's another crucial lesson I learned early on in my fledgling trading career; ensure that negative trading experiences are transformed into positive experiences by making them learning experiences. There is always something valuable to be discovered in a negative situation. Search for and draw your attention to the positive. Instead of berating yourself after making a mistake, learn from the experience and move on. What did you learn about yourself and your trading, what new skills did you develop, even micro 'coping skills'?

How can we be positive when suffering a losing trade? Try ticking this mental check list after asking yourself; "overall did I plan the trade and trade plan?"

  • Did I take my trade according to my alert, or pre determined target and conditions?
  • Did I monitor news events?
  • Did I set my stop?
  • Did I set my stop whilst taking into consideration; big round numbers, resistance, support and key moving averages?
  • Did I exit and monitor the trade at the key intervals as determined by my plan?
 

 

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You could add more of your own check list, but I'm sure you get the general idea. If you followed your plan there's a huge positive to be taken out of your losing experience. You can congratulate yourself for exercising total discipline. There are lessons to be learned from losing trades, in our game these lessons can be expensive, but every trading problem is a learning opportunity in disguise. You will make mistakes, accept that fact and move on knowing you'll make a different decision next time. As with any habit, the habit of remaining positive in all situations takes practice and a commitment to yourself to take control. But start small, start paying attention to your emotions, start by wanting to change.

When trades go bad practice seeing yourself in a positive and confident light. Self-affirmations (list of positive statements about yourself and your self image) are a simple and powerful tool to train your subconscious to see yourself in a positive light. This is important, as many of us can be hard on ourselves through social conditioning; supposedly we all have to strive, we have to conform. Hard physical work and conformity and not the key characteristics of the 'work smart' successful trader who has opted out of the 'nine to five', so don't bow to social conditioning, embrace your decision to stand aside from the crowd..

The true test of an individual to remain positive is when challenged. Negativity is contagious; not only does it affect the individual, but it spreads to anyone they interact with. Eliminating negativity, or rather, being positive is a mindset that can be found at any moment, and turned into a habit. Whether you are positive or negative, the situation you find yourself in does not change, therefore we might as well be positive..

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