How I Beat the Mental Game of Trading [After 5 Years of Failure]

Why is it so hard to stick to your trading rules? Why do you keep blowing account after account telling yourself each and every time, this is my rock bottom. You tell yourself this, but you keep doing it. You keep revenge trading. You keep market ordering in as opposed to planning your trades. You keep chasing price. You keep getting bad entries which lead to terrible stop limits. You keep moving your stop limit. You keep looking for strategy after strategy, conning yourself into thinking that the problem is the strategy. It's not the psychology. The harsh truth about this is that you cannot become a profitable trader without overcoming this specific aspect of trading, which is the psychological aspect right now. The reason that we are terrible traders by nature, all of us, including me, including your favorite trader, right? Professional or online guru, the reason that we are all bad traders is because we are human. The answer is a lot simpler than you think it is. It is based in the makeup of our brains. Our brains have been evolving for millions of years, right? And they're evolved to do what? To survive. That is why I'm talking to you in front of this camera today, is because we survived as a species over millions and millions of years. The problem is our brains are programmed to survive, right? To keep our species alive. Now, why is this bad for trading? You might think that this might, you know, not affect trading at all, or you might think that trading is not. Has nothing to do with the way that we've survived for millions of years. And you couldn't be more wrong. So in this video, it's just going to be a raw video talking to you about some of the lessons that I've learned in psychology over the years. It took me years to overcome this, to become a profitable trader. It took me years to get to a point where I'm making five figures, let alone six figures as a trader, right? It took me years to not lose. And hopefully in this video, I'm going to shed light on, on make you understand really what parts of the human psychology are working when you are.

You know, revenge trading or when you're shooting yourself in the foot when you are going down a path that is emotional and not psychological, right? As I said, the harsh truth is that you have to overcome this aspect of your trading. But the good news is that you can overcome it. Now, why do most traders lose? You see this statistic all the time, right? People throw out 99%. Some people throw out 95%, some people throw out 90%. 90%. No one really comes under 90% because it is a high percentage of traders that lose. Let Me ask you this, if it was just a matter of guessing price, don't you think that you would be right 50% of the time, right? If you think of it as a coin flip where it's just is price going to go up or is price going to go down? You only have two choices, right? You can either long it or short it. So you would think that it would be somewhat around a coin flip. Any, any 50, 50 proposition that I give you. If we do it enough times, you will get closer to 50 50. But why is it that 90% plus of traders lose? It's because we are all human. There is nothing wrong with you per se, There is something wrong with you as a trader, but there is nothing wrong with you as a human. It means your brain is firing as it should be. So what is going on and how do we undo this? Or better yet, not let it affect us as much because you're not going to be able to undo it perfectly, right? But you can undo it at least as it relates to trading to where you are now taking a different path towards profitability. First, it's important to understand why humans are attracted to trading. You might as, as I told you in the beginning, you might think to yourself, trading has nothing to do with survival. Why is, why are our brains and the way that our brains work inextricably tied to failing at trading? And well, let's take a step back. Why are people attracted to trading? Right? People are attracted to trading because.

Most of humans on earth are stuck in some sort of rat race, right? Their salary is capped, their freedom is capped, right? They don't have a ton of freedom because they're likely working a 9 to 5. Their salary is capped because you can't just go every single day and ask your boss for more money. Well, you can, but you know what the result will be, right? But all of these things are capped. And once someone discovers trading or they see other traders that are successful, they see the possibilities of what trading can bring to them, they start linking that to survival because it is a literal ATM machine. Obviously, once you become profitable and go through years of hardship, years of training, years of market experience, but people can see the outcome. And now with social media, they could see it more than ever, right? They see the outcome of profitable trading, they see the payouts, they see the account balances, they see the lifestyle. So you automatically link that to survival as a human being because it is above and beyond, most likely for most people, it is above and beyond what you are doing now, right? Like the reason that Jeff Bezos and Elon Musk, the reason that they're not attracted to trading as in day trading, is because they don't need it. It's. It's not part of their survival, right? They're not capped in a way that 99.9% of human beings are. So being that you are a human being with limitations in your life as it relates to the amount of money you can make and as it relates to the freedoms that you have, you automatically associate trading or success at trading with survival. Your mind starts bursting with possibilities, right? And imagined outcomes. What, what could my life look like if I just succeeded at this one thing? I need to do it. What could my life look like? How different could it be? How different could my family's life be, Right? So you can easily see now, you know, at least if you didn't think so before, you can at least see the connection now between trading and survival. But as I told you at the outset, our brains have been evolving for millions of years. And everything in trading is antithetical to the way that our brains have been programmed. See, now that we've linked trading to survival, you could see easily how losing can feel to your brain, can feel like not surviving. So what happens when you lose, right? What happens when you lose in trading, when you lose in an aspect of life that your brain now links to survival? Well, you're a human being, right? We didn't survive millions of years by not being problem solvers. So in our minds, when we lose, we try to solve the problem. The problem with this is that we are sitting in front of our desks with a mouse that has one button on it. And all we could do is take another trade, right? At least that's what you think. For now, all you could do is take another trade. So when your brain, when your brain experiences that loss and your emotional being experiences that loss, you automatically go into problem solving mode, right? Because you are now panicking since your survival is at threat. The problem with this is that you think problem solving means taking another trade. I have to fix this or I won't survive. I have to fix this or my chances of survival are at stake. I have to fix this. Or the life that I've been imagining of uncapped money and uncapped freedom will not happen for me and my family. So I have to fix this. So automatically you take another trade. Now, imagine a hunter, right? Imagine a hunter.

Puts his sights on an animal, right? We're in the wild. We lived in the wild. For millions of years. We've only been at desks for, you know, a few hundred years. So in the wild, imagine that you're going after a kill and you miss your first target, right? You miss the. The animal that, that's in front of you. There are animals grazing around in the perimeter, but you miss the first one. What do you do then? Do you just jump up out of your hole that you've been hiding in and start firing indiscriminately at all. At all the animals? No, you don't, because they're all run. They'll all. You'll be exposed. All the animals will run away and you'll never get a kill. And this is what revenge trading is like, right? This is what revenge trading is like. What would you do if you were a hunter, if you missed the first kill, but you see that there are still other animals in your vicinity? Well, you would reposition yourself. You. If the first animal ran away, then you might, you know, set your sights on another one that's in distance. You might calculate, okay, this one is a little closer than the other one was. So that means that I have to adjust my aim, but I still have to maintain my calm, maintain quiet, because I cannot go home without food. So when we enter a trade, taking another one immediately is not the answer. As a matter of fact, I bet you if you kept statistics on the trade that you took after the losing one, I bet you it wouldn't even crack 5%. Right? It wouldn't even crack 5% success. Meaning that after you take a loss, say your stop limit gets hit, and you immediately enter another trade. I guarantee you that the success of those trades that you've taken will not even crack a 5% win rate. See, the most dangerous trade that you take is the one right after a losing trade. It's the one that is the least informed, that has the least amount of thought. It is all emotional. It is the most dangerous trade that you take. So one of the things that I've managed to do over the years was in my mind, make an association between clicking and losing. Meaning if my stop limit hits, the last thing I should do is click to enter another trade, right? That trade is a losing trade. I automatically equate. If I hear that sound that goes off when my stop limit hits, I automatically. It's like Pavlovian, right? I automatically equate the next trade that I take immediately after as a losing trade. Right. Now, in the beginning, I will give you some. Some tips on, on what to do actually, let's keep it till the end. I will give you some tips on what to do, how to resolve some of these inefficiencies that have been programmed in our brain. But here's why going down this path of revenge trading is so dangerous. Because after weeks, months, years of doing it, you start to develop something called loss aversion. Now, what is loss aversion? Loss aversion is exactly what it sounds like. It's when you are scared of losing, right? And I bet you, because you're watching this, right, I bet you are most likely an unprofitable trader. And I'm not trying to denigrate you, I'm not insulting you, so stop me if I'm lying. But again, you're probably an unprofitable trade. And I bet when you enter a trade, your gut feeling, your gut reaction when you enter a trade, the first thing you say to yourself is, I hope I don't lose this trade. Or man, I hope my stop limit doesn't get hit. I think my stop is going to get hit. I hate when my stop limit gets hit. And I guarantee you that you're not saying time and time again when you enter a trade, I guarantee you're not saying, oh, I know what the stats are in the setup. This is my preferred setup. This is my, it has all of the trappings of an A plus trade according to my rules, my backtested strategy. I know this setup. And if I wait until price gets to my entry, then I'll be fine, right? If I wait until price gets my entry, I know likely what's going to happen with a 65% or 7, 70% degree of confidence that the trade is going to hit. I guarantee you're not thinking on those terms. And you cannot be a profitable trader until you get to that point. So the problem with revenge trading or the problem with entering trades, rushing your entries, chasing price, etc. All this stuff, the problem with all this stuff is that it builds over time. Weeks, months, years of what we call loss aversion. So now you are. All you are doing is entering a trade hoping you don't lose. You're no longer entering a trade to maximize your profits and build your account up, right? You were entering a trade hoping not to lose. So now you associate trading with pain. You still see the possibilities, right? And especially if you're on social media, you still see the possibilities of what trading can bring, so you keep doing it. A lot of people do quit. A lot of people don't, right? Years they don't quit. But now you associate trading with pain. And this is the worst place that you can be in. And everybody, successful or not, has been in this place, right? But I'm hoping again to shed light on this so that when it's happening, when you are doing these bad habits, you can see it in real time like Neo from the Matrix, and you can stop yourself, right? And I will give you tips on things you can do in order to avoid these pitfalls. But now you associate trading with pain, right? So you start reinforcing even worse habits. So you let your losses run, right? Maybe you remove your stop limit and you let that position bleed because you're hoping that it turns around. And now you might be hoping that it turns around just to cut your losses as opposed to winning a trade, right? But the reason you do this is to avoid pain. You take profits too early, right? The minute that you see green, you close it out. Because remember, you now associate trading with pain. You no longer are associating trading, or you might have never associated trading with a profitable strategy. So now, the minute that you see green, you cut it and you take green on. You know, you might take 150 or $200, and then the trade ends up running for 2, 3, $4,000. And you're like, oh my God, that was where my target profit was. If I just kept it, why didn't I keep it? And it's because you're trying to avoid pain. You associate trading with pain. You keep trading after taking large losses, or you might revenge trade the source of that. We talked about this a little bit. You're trying to problem solve your way out of bad trading, right? But you, at the end of the day, are trying to avoid pain. You want to get back to green, right? So you're trying to avoid pain. Trading without real conviction, meaning chasing price fomoing into a trade that someone else might have taken, that you missed their good entry. And so now you're taking a suboptimal entry because you now have a fear of missing out. And a fear of missing out causes pain. So your subconscious mind that has been, you know, evolving for millions of years is trying to survive and avoid pain because it sees trading as survival and it sees success in trading as surviving, right? So this is all antithetical to trading. This is why, you know, you always hear, oh, you have to be a robot when you trade. You have to remove your emotions when you trade. Guess what? That's impossible to remove your emotions. You're a human being, right? Unless You're a psychopath, which I don't know what the stats are on psychopaths and trading, but you are a human being with real emotions, right? And it's hard to suppress your emotions. However, you can rewire your brain. Obviously there's been millions of studies done on cognitive behavioral therapy, you know, on rewiring the brain in order to make certain associations more prevalent or to suppress certain associations. So in your mind, right, like you have to make the association. For instance, as I said before, clicking is losing, right. If you make that association and you keep reinforcing it over and over again, then you are less likely to do it, right? But you still feel bad when you take a loss and it's just what, what are you doing now? As opposed to revenge trading, right? Letting the emotions build up so much into a decision, you could still feel bad. And there are ways to overcome the, the emotion of losing a trade right in the beginning. Actually we can jump into this now. So what are, what are some things that you can do in order to improve this aspect of your trading? And I, I guess I want to start off and just say before we get into what are some things you could do to mitigate. Not all problems with trading are psychological, right? This is something that you hear a lot of newbies say, like, oh, my problems are psychological? Yes, you do have psychological problems as it relates to trading. But how do you know that your problems aren't technical? Are you trading a back tested strategy? Are you trading a strategy that you've tested out or paper traded for months and you know is profitable? But the only problem is that you go outside of, of that strategy, right? If you are not at the point yet where you have a strategy, you're not confident in the strategy that you're trading, that's fine. Your problems should start with finding a backtested strategy. There are tons of people online that, that you can follow that have backtested strategies or that have stats to back up their trading or have payouts or whatever, right? That's really not that hard to find a winning trading strategy because they all, from my experience, I, a lot of them work, right? Smc, slash, ICT works. I know traders that trade just momentum. I know traders that use footprint charts and volume, etc. There aren't, there isn't just one strategy that works, right? If you can find a strategy that's more than a 50% win rate and you can stick to that mechanically, then you will likely find profitability, right? It's just the problem of being confident in that strategy and only taking trades in that strategy. So I just want to put that out there that a lot of times, if you are really, really, really a beginner trader, your problem is not psychological. If you are a good technician, if you know how to read a chart, if you're comfortable entering trades, if you are familiar with certain strategies that work, if you see your stats work when you do trade your strategy, but the problem is that you're trading outside of it, then your problem is likely psychological or mostly psychological, right? So here are some tips that I can give you in order to overcome your natural pitfalls as it relates to trading. Number one, sign a contract each and every morning. I've talked about this time and time again, but write a contract, say, I will only take trades that adhere to my rules. I will not market in market order in. I will only wait for my, my limit price to hit. I will set the trade up before I get in. I will have a my stop limit, my TP and my entry defined before I get in. So write down all of your ground rules and leave a space for a signature and go to a copy store and print 250 of them for the number of trading days a year and sign it every morning and leave it on your desk right next to your keyboard. Trust me, this will work. It's not going to fix all your problems, but I bet you it will limit the amount of trades, the number of trades that you take. I guarantee you it will cut down the number of unnecessary trades that you take. It's not going to solve all your problems. Nothing will. Except for reinforcing these good habits every single day and then seeing the results, becoming confident, and then, you know, sticking to those results, right? Once you have, once you see a small subset of good results, it gives you the confidence to stick to those results. And it compounds like a snowball. Trust me. After each and every trading session, you should be able to recall off the top of your head every single trade that you took, right? A lot of times you'll see, I know you're guilty of this, but you'll see your executions after the day's over. And there's like a million trades, right? And if I said, hey, what did you trade today? You will not be able to recall each and every single trade, but you should be able to recall each and every single trade. So on most days, if you ask me what did I trade, I can easily tell you, okay, I took a long on the NASDAQ in the morning and I shorted gold in The PM session and that's it, right? This, that's how your trading day should look. Because once you find confidence in your strategy, then the next step up is to scale your trades. You will not need more trades, you will just need bigger size trades. Obviously, once you get to a point where you have achieved some semblance of profitability, then the path to compounding that is to increase the size little by little on your trades as opposed to taking more trades. Don't ever enter a trade without having a defined stop limit TP and entry. I've already talked about this, but every single one of your trades should look like this, okay? Every single one. If you. If they don't, it's because you don't have a system. The other thing is, do not move your stop limit around. Now it's okay to have a dynamic stop limit, meaning if your trade hits, you know, one and a half R or one R one to one and you say, at this point, I'm going to move my stop limit to break even, that's fine. But just fidgeting with your stop limit and your take profit constantly, it just shows that you likely don't have a mechanical system yet, right? So do not do that if you do have a system. If you have a mechanical system that you know you should be trading, do not move around your stop limit and your take profit. Just don't do it at all. The next one. We talked about this before, but always equate clicking with losing, meaning after your stop limit hits. If you lose on the trade, you should always equate clicking right after that with losing. Right? Clicking does not mean there's a chance to win. It automatically means a loss. If you're able to associate that right over and over and over again, then I guarantee you will limit the number of times that you click after losing your trade. You should also implement some sort of good habit, some sort of.

Recurring good habit after a loss, right? You should be going to the gym or going outside or doing push ups or going for a drive or spending time with your family. Or say, you know, if my stop limit hits, I have to get up out of the seat and do X, whatever X is, playing guitar, whatever. You can come back to your desk in order to trade. But do not look at that same setup anymore immediately after you take a loss, right? Do not stay stuck to that setup. Go away, come back in 5, 10, 15, 20 minutes and then look at the chart and reassess from there. And if another trade fits your criteria, again, you're Supposed to have a set of criteria. If another trade fits your criteria, then you can enter it. But the minute that you that your stop limit hits, get the hell up off of your desk and go do something else and make that thing a habit. Every time I take a loss, I do 100 push ups. Every time I take a loss, I go practice guitar for 20 minutes. Every time I take a loss, I go make the kids breakfast or whatever, right? Every time I take a loss, I go for one mile run. Every time I take a loss, I go do four sets of bench press. Like whatever it is, it could be anything, right? I go draw a picture or paint or whatever it is that you like to do. But you have to associate a, you know, hit a trade, hitting your stop limit with you getting off of your desk to do something. And finally write down a summary of your trading session each and every day, right? What were your emotions? What trades did you take? Did you like certain things about what you did today? It's important to also reinforce good habits when you find them, right? What did you do today that that you didn't like that you want to avoid tomorrow? Doing this really is underrated. Because if today I did something like I revenge traded, right? I avoided revenge trading for seven trading days straight. But today I revenge traded. So I can write that down. I guarantee you you are much less likely to do it the next day, right? And then maybe you can go 14 days without revenge trading. And lastly, I want you to have a risk management plan. I don't see a lot of traders having this, right? What are your limits for the day? Meaning if you tell yourself I can only take one loss per day, right? And your risk management plan might look something like this. You say you risk 250 to make 500, right? A two to one basic two to one risk to reward. Now if you take a loss, you're done for the day, you're down 250. That's it, you're done for the day. You get up, you try again tomorrow, okay? If you win, you make 500 bucks, right? And you allow yourself to take another trade. Now what if you lose that second trade? So you made 500 the first trade, you lost 250 the next trade, you are now up 250 for the day and you are done. Because remember, you have a one loss trigger. Now imagine you take two trades and you win. You are now up $1,000. And imagine you lost your third one. Then you would be up 750 on the day and you were done because you took one. L. Now imagine this is a very, at least according to the way that I trade, this is a very unlikely scenario. But imagine you take three trades and you win all three of them. I'm not saying winning three trades is an unlikely scenario. I'm saying I rarely take three trades. But imagine you take three trades and you win all three of them. Then you are now up 1500 on the day and you. I probably would venture to say you cannot find four A plus trades in a day. But you know, either you stop or, or you know, you take another trade until you lose. But you get, you get the picture that having a risk management plan where you know, you're limiting yourself to one loss a day and you every trade, at least to begin with until you get really good, but every trade to begin with is a 2 to 1 risk to reward you are risking 250 to make 500. Like you the imagine those gains compounded over a month, right? Imagine those gains compounded over a month. And more importantly, imagine the limited losses that you'll take if you actually stuck to this strategy. Every time you lose, you're only lose 250. But if you win two trades and lose one, you're up 750. If you win three trades, you're up 1500. Even if you win one trade and lose one, you're still up 250. Like people do not think of a risk management plan when they start trading, unfortunately. But hopefully I shed some light on why it is that, you know, as, as natural beings, as cavemen, why we do suck at trading. But I'm hoping that you know this talk here, maybe you should listen to it every day before you start your day. I don't know. But I'm hoping that this talk here really will allow you to step outside of your body and like I said, Neo from the Matrix, see what's going on when you take a loss. Like what? Why is the urge so strong to enter another trade? Right. But hopefully you got something out of this. This is by far the most requested topic that people ask me to make a video on. So hopefully this shed some light. Even though it was a RAW video, it took me a while to compile my thoughts into a coherent video. So hopefully made sense for you. Hopefully you got something out of it. If you want to trade with me. If you seven days for free. I go live at Market Open every single day. Click the link in the description. Would love to have you follow me on IG and on X for daily trading and finance content. And also on ig, I post my travel content. Right now I'm in Italy as of the time of this recording in Sicily. It's. It was light outside when I started the video. Now it's dark. But stay safe out there. Traders Peace.