Psychology of Successful Trading

Hi, this is Brian McAvoy with Inside Out Trading. And welcome to this presentation on the psychology of successful trading. How to avoid failure and heartache as an individual self directed trader and make your success inevitable. In the short presentation, you're about to discover the one single psychological asset which you absolutely must have in order to succeed as a self directed trader. You'll also discover the two critical skill sets which most traders neglect to their great disadvantage. The most harmful and probably most common misconception there is in trading, and how it keeps you chasing your tail and wasting your time and resources. Now this is important. Understand that without this one critical psychological asset, you will fail as a trader. And until you acquire it and do so properly, no shortcuts or BS allowed, any success that you do experience will be short lived at best. You will continue to fight anxiety, hesitation, stress and never ending frustration and disappointment. The cycle of get ahead and then hand it all back will keep happening over and over again. Fortunately, you do not have to continue down the same path you've been on. Starting right now. By taking just a few minutes to watch this brief presentation, you can set your trading on a much better course. As you're about to see for yourself, this is not a bunch of hype, puffed up claims or speculation. As a matter of fact, this is the most businesslike and sensible manner in which to approach your trading. By focusing on acquiring and developing this absolutely essential psychological asset. Again, you do have to do it properly. Your success is virtually guaranteed. Your success becomes the natural and inevitable outcome. But let me give you a little word of caution here. Do not make the mistake of jumping to conclusions or dismissing the simplicity of what you're about to hear. As a degreed mechanical engineer and as an ASQ Certified Quality Engineer, from my own experience in trading over the last 10 years, and with hundreds of traders that I've helped over the last six years, I can comfortably say that you are about to discover the simple, direct and extremely sensible secret to sustainable success in trading. So what is this must have psychological asset and how do you acquire it the right way? Well, believe it or not, you already possess this asset, just not yet in your trading. And for one very simple reason, you haven't done what you need to do to have it. Now, the cool aspect of the process of acquiring this asset in trading is that you will also address a very harmful and extremely common misconception. Allow me to illustrate. Let's take a look at an activity with which you are already very familiar. One which involves substantial risk and considering the Number of variables, a rather respectable degree of uncertainty. Silly as it sounds, driving your car on the road with all the idiots, people texting drunks, and of course, the various possible weather conditions. Now, when you're getting ready to go somewhere, do you stand there frozen, keys in hand, staring at the car, but unable to get in out of fear that you may get into a wreck? Do you ever pull your car off the road prior to reaching your destination because you're too scared to keep driving? Do you ever randomly yank the steering wheel to one side and run your car off into the ditch if it starts to rain so hard that you can't see down the road, do you. Do you keep driving along at normal speed or do you slow down and maybe even pull off until it's safe? Do you drive through school zones at 50 miles an hour or zoom through lights randomly just for the thrill? No, of course you don't do any of those things. It's safe to presume that you manage to safely drive from one place to another on a regular basis, comfortably and without any major psychological issues keeping you from getting where you want to go. Okay, so we've established that you can experience significant success with a somewhat challenging, relatively high risk activity. And even if you have been in an accident, you were able to get over it in a fairly short period of time and get back to driving just fine. Now, if you think about it much at all, there are probably other activities which involve substantial risk, challenge and uncertainty. Yet you've managed to succeed with them, even if you've experienced some failures and bad experiences along the way. So this brings us to a revealing question. With anything that you're really good at, do you have psychological issues or difficulties staying disciplined? No, you don't. When you're good at something and you know you're good and you know why you're good, anxiety, fear, doubt and hesitation simply don't come into play. And this difference can be summed up in one word, confidence. Now, stay with me for just a moment. Don't make the fatal mistake of jumping to conclusions because you are about to find out exactly what you need to do to eliminate your doubts, fears, anxiety, skepticism and cynicism and replace them with true confidence to position yourself so that you clearly see the path to your inevitable success. See you're no longer hoping to maybe figure it out someday. You know, at this point, no one has to tell you or convince you. You finally see the light at the end of the tunnel and you feel the excitement of knowing, not hoping that success is Realistically within your reach. Now, even more good news before I share with you the two skill sets that form the foundation of unshakeable confidence. As you take the steps to gain true, rock solid, lasting confidence, you will also dispel the most harmful and probably most common misconceptions in trading. And here it is, this fatal misconception. If I could just be more disciplined and stick to my system, everything will be fine. Now, mistakenly thinking that the problem is a lack of discipline makes you miss the real problem. And if you're not aware of it, how can you fix it? Discipline is not the problem. It's something much quicker and easier to fix than your head. You know the psychological issues. Now think about what you say to yourself when you make mistakes in your trading. Mistakes that you previously thought were breakdowns in discipline. I hear these all the time from people that come to me for help. If I could just stop shooting myself in the foot, if I could just get out of my own way. I seem to be my own worst enemy. These are clues that point to the simple truth behind the misconception. You aren't undisciplined. You've been sabotaging yourself when nearly all traders mistake. For lack of discipline is in fact, self sabotage. And you won't fix self sabotage by forcing or tricking yourself into being more disciplined. That's why it doesn't stick. Unfortunately, while there are five different causes of self sabotage, the primary cause is the same thing that keeps you from having the confidence that you need and desire. So by addressing this one matter, you solve the two greatest obstacles currently blocking your success as a trader. Self sabotage and lack of confidence. This is where the two skill sets come in. The two skill sets are practical matters that form the foundation on which the critical psychological asset of confidence is forged. Now keep in mind that while these skill sets are applicable in any pursuit, they are particularly necessary for individual traders. When traders come to me for help, all beaten and bruised and in their confidence, in shambles, they often ask a very understandable question. What really are the odds that I can make it as a trader? After working with numerous traders, I found I can ask one question that will tell me rather accurately and very quickly how likely they are to make it. Have you ever run your own business before, worked for yourself successfully? If they answer yes, that tells me that they've gone through that learning curve, which is actually a tougher learning curve than learning how to trade. A yes to having been successfully self employed before is a strong indicator that they can make it as A trader a no means that they have both learning curves to work through. And together they make for a very formidable challenge. You see, to succeed as a self directed trader, you need two very distinct skill sets. One, being a self employed business owner and two, that of being a professional trader looking at the higher level of your trading business and the related necessary skill set that of the owner manager of the business. A fatal mistake many traders make is not understanding that trading is a real business. See, trading is more than just something to do to make money. Any activity engaged on a regular basis with the intent of making money is a business. Every business that exists, except for nonprofits of course, is there because the owner saw an activity with the potential for profit. Every business, now every trader will say that they want consistent profits. What business owner doesn't? Now the consistent part is because we all want security and a reliable source of income and wealth generation. But how can you expect consistent results from any business that never got properly organized? This is the primary reason that venture capitalists will not even listen to the best of business ideas if the person presenting it does not have a business plan. See, the underlying question is if you can't build it on paper, how in the heck do you expect to build it in the real world? Profitable, reliable business requires organization and the skill set to make it so. How reliable a business is will be in direct proportion to the skills in the organization of the person running that business. So for traders, if you do not have a business plan and you do not have the skill set of a business owner, you will not have the internal support for confidence that you need. Plus, now your subconscious has reason to thwart your efforts as the owner of your trading business and has reason to correct circumstances. If your trading business is making undeserved profits or amasses too much equity in your account. In developing the business plan you think matters through, get clear on what you're trying to do and specifically how you plan to make it happen. Now, regarding confidence and self sabotage, instead of having nothing or a very vague objective like make lots of money, having a business plan gives you a clear and tangible look at what to expect from your business. On top of the detailed picture of what you expect to realize, you've also laid out how you plan to make it happen. Now, having a properly formulated plan provides confidence and also allows your subconscious to support its manifestation rather than sabotage it. Now remember, you are now in a self employed business. Thus the second level on which you operate and need to have confidence and avoid self sabotage. That's what we're talking about critical skill set number two, the thing of the business. That's a phrase coined by Michael Gerber in the E Myth Revisited. At least I think he coined it. But what they're talking about here is every successful business needs a strategy on how they intend to make money, a business model and a method to implement. This is where the day to day activity which generates profit for the business is determined and executed. Another extremely damaging mistake traders make is neglecting or denying the fact that trading is a skill based occupation, a true profession. Again, the misconception of find usually meaning buy a good trading system, figure out how to stick to it and everything will be fine totally misdirects traders. While consistent execution is necessary, of course, confident and reliable trading requires that the trader be more than simply a robot or automaton. The skill set required goes beyond that of simply executing trades. A key skill set for individual self directed traders involves being able to systemize their method effectively. Most traders do not have the skill set or process for this. Then they wonder why they're having such a hard time finding a good system when they have no way to know just how good what they use is and if they can rely on it to live up to their expectations. An ironic phenomenon that I've encountered since starting with trading system mastery coaching is probably 95% of my clients already had systems that worked, but because they didn't know how to make their system user friendly, or how to simplify it, or how to evaluate it, they weren't able to make money with it. In order to have solid confidence as a trader, you simply must have the skill set, method and tools to know just how good your system is and what to realistically expect from it. And probably even more importantly, you have to know what to do if your system is not delivering as expected, like when the market mood changes. So your role as trading system analyst and developer is critical to being a professional trader. And of course getting paid like one. Much like with the business plan is for your trading at the higher level, your trading system is your daily guide to trading, your means of making money. So if you don't have the skill set to know how good your system is, what its true potential for profit is, and what to do if it isn't up to par, then you're running on hope, you'll operate with lingering doubt, little to no confidence, and you'll be very susceptible to self sabotage. Okay? Also, like with the business plan, it begins with knowing how to document it properly. Now why is this so crucial again, because if you can't put it down on paper, how do you expect to be able to do it consistently? The next part of the skill set is testing and analyzing your system and understanding the results to confirm that it will indeed work and so you know its potential. Then of course you also have to be able to optimize, make changes in an organized and business like manner. Only then can you have the confidence you need to trade it consistently and avoid the self sabotage that you've been experiencing. Now the psychology of successful trading is based upon simply taking control of your endeavor by treating it with the proper respect, by acknowledging through your actions that it is a real business, a skilled self employed occupation and a true profession, and acquiring the needed skill sets to have the supported confidence in what you're doing and effectively earning the permission of your subconscious to receive success. Now I hope you've enjoyed this presentation and found it beneficial. Please share this with your friends or colleagues and feel free to leave your comments below. Now for more on how to become a successful trader, visit Inside Out Trading and hey, drop me a line if you like. Again, this is Brian McAvoy with Inside Out Trading. Cheers.