Thinking Like A Trader

computerized trading

Consider Your Trading Skills and Well As Your Psychology

Consider for example that you were always a position trader looking for long-term moves. Your belief was in long- term trends and day trading strategies. You never saw the relevance, in fact you never even considered, or believed in day trading, whenever someone mentioned a day trading method, your mind automatically flashed loser to you.

One day you discovered a day trading approach that made sense and seemed to fit your personality. In fact you loved the methodology and results when you tested it historically, you even witnessed first-hand someone trading it and making money doing so.

Your new belief in a proven day trading system is in conflict with your old habits that day trading strategies don’t work. Even though the new system has promise, the old habits and expectations from the market have a stronger energetic force thus creating frustration.

To overcome this frustration you must take the energy out of (de-activate) the old habits and beliefs and replace them with a new belief and habits. To de-activate the old habits and beliefs as a commodity futures trader, you need to positively charge the new beliefs. This may require a bit of effort and time.

Little by little with each successive swing trading and day trading positive experience you have with your new day trading system, you take energy out of the old beliefs and create positive energy for the new belief. If there are conflicting beliefs about your trading different markets or trading strategies and we aren’t willing to expend the effort to de-activate the negatively charged belief then acting on our new belief will be a struggle at the very least and perhaps impossible.

Creating a dominant belief requires adherence to several principles of consistent success. Some of these principles will likely be in direct conflict with some of the beliefs you have already acquired about trading.

To overcome this conflict and transform yourself into a consistent winner as a daytrader at marketgeeks you must first be willing to change, have clarity of intent, and a strong desire. You must at every turn choose consistency over every other reason or justification you have for commodities, futures and other types of trading methods.

The first step in creating consistent results is to begin observing what you are thinking, saying, and doing. These actions reinforce and contribute some belief in your mental system. You must start paying attention to your various trading related psychological processes. I recommend you write down your thoughts so that you can come back and see how much different your thought process is compared to how it was when you first began this process.

Become Objective Observer In Your Trading

stocks and bonds

Trading And Observing Have To Become One

The idea is to become an objective observer as a stocks and futures trader of your thoughts, words and actions. Your first line of defense in avoiding a trading error is to catch yourself thinking about it. The last line of defense is to catch yourself in the act of making a mistake. If you do not commit yourself to becoming an objective observer then your realizations will always come after the experience, usually when you are in a state of frustration and regret.

Observing yourself objectively implies doing so without judgment or criticism. Most of us, to avoid emotional pain, typically avoid acknowledging our mistakes. However, not acknowledging our mistakes in daily life usually does not have the same negative consequences it can have as not confronting our mistakes as options and stock traders. Mistakes simply point the way to where you need to focus your efforts to grow and improve your trading. It is an understatement to say that you will encounter great difficulty in achieving your trading goals if you can’t acknowledge a mistake as professional swing and day traders.

When you notice that you are not focused on your objective choose to redirect your thoughts, words and actions in a way that is consistent with what you want to accomplish. The more willfully you engage in this process, and do so with conviction, the faster you will create a mental framework free to function in a way that is consistent with your objectives as traders. .

This process of continually redirecting your thoughts, words, and actions as often as needed is the process of self-discipline. Self-discipline is a mental technique to redirect your focus of attention to the object of your goal or desire. This is a learned technique that are not related to online commodities futures trading and not a personality trait. You have to keep in mind something very important and you need to keep reminding this to yourself while going through this process, people are not born with self-discipline and neither are most commodities and future brokers.

Using Technical Analysis In Trading


Mental Process Professional Day Traders Go Through

If there is anything in your mental environment that is in conflict with the principles of creating the belief that “I am a consistently successful trader” then you will need to employ self-discipline to integrate these principles as a dominant functioning part of your identity. Once the principles become internalized and become “who you are” you will no longer need self-discipline because the process of becoming consistent will become effortless.

Creating a Belief in Consistency – The following beliefs are the building blocks that provide the foundation for what it means to be a consistent winner. I am a consistent winner because:

• I define my profit potential
• I predefine my risk on every short term commodities trade
• I completely accept the risk
• I act without hesitation
• I continually monitor myself
• I understand and never violate these principles

To integrate these principles into your mental system at a functional level requires that you purposefully create a series of experiences that are consistent with them. You must learn to be an objective observer and think from the markets perspective (every moment is truly unique). If there is enough will behind your effort, it is possible to experience a major shift in your mental structure as a futures trader very quickly. De-activating internal conflicts is not a function of time; it is a function of focused desire and belief. So the amount of desire and how much action you put into consciously following these steps, will determine how fast you begin seeing actual results from your efforts.

Over the years I have seen many traders who assimilated this information and adopted the principles explained in this tutorial. Most commodities traders experienced substantial shift in their thinking process and as a result their trading greatly improved over a short amount of time. One quality that each and every one of these traders shared is unshakable focus and determination to change and complete faith and belief that these principles work.


Emotional Stress and Trading

trade financial markets

Many short term trading and swing traders associate trading with pain and fear as they have experienced many frustrating, emotional monetary losses. The tendency for our minds to associate is an unconscious mental function that occurs automatically. The trader’s negative experience and association of trading being fearful and painful creates an internal conflict before and during each trade. The amount of discomfort is unique to each individual and is related to the degree of emotional duress that stock swing trading strategies  suffered previously when the trauma or in the traders case the loss occurred.

The experience of pain during a trading experienced is what psychologist called a projection. You are instantaneously projecting past experience onto the current situation. The stock swing trader is projecting their pain onto the market and it is reflected back to him and is perceived as painful even though we know the market is neutral. The emotional pain causes us to lose focus, makes it difficult to perceive new possibilities, and inhibits our ability to learn something new.

For untrained stocks strategist or technical analysts their minds will automatically and unconsciously associate the current trading opportunity based on their most recent day trading experience Thus, if the trader experienced a series of losses he feel threatened, and if he is coming of a series of winners he may be overly optimistic.

So the important question is if our previous beliefs and experiences limit and possibly distort our awareness of the information being generated by the actual market environment or market movement, then how do we know what the truth is? Because, the closer we come to really seeing what is happening, the closer we will become to becoming truly objective seeing and reacting to the markets in our best interest, and that’s the goal of the next section.

Conflicting Beliefs and Trading Results

trader one

The Impact of Negative Belief on Trading

Throughout human history and society, there are many examples of people whose belief in some issue or cause was so powerful that they chose to endure indignities, torture even death rather than express themselves in a way that violated their beliefs. This is a demonstration of just how powerful beliefs about trading futures and commodities can be and the degree to which they can resist any attempt to be violated or altered in any way.

There is nothing we can do that would cause a belief about trading with brokers certain bonds, commodities and options to cease to exist or to evaporate like it never existed. This assertion is founded in the basic law of physics. Energy can neither be created nor destroyed; it can only be transformed.

One example could be that as a young child many of us were taught to believe in Santa Claus In most cases these are examples of now inactive nonfunctional beliefs if someone came up to you and said Santa Claus was at the door you would treat it as a joke or as irrelevant However if you were five years old and were taught to believe in Santa Claus would instantly be charged with positive energy in all trading instruments, especially commodities and futures contracts. that would compel you to jump up and race to the door.

Once you learned Santa Claus did not exist it did not destroy your belief in Santa Claus nor cause it to exist it just took all of the energy out of the belief. It was transformed into a nonfunctional, inactive concept about how the world works.

Now you have two contradictory distinctions about the nature of the world that exist in your mental system. One is that Santa Claus exists, the other that he doesn’t. The difference between them is the amount of energy they contain. The first has virtually no energy the second has energy.

Thus from a functional perspective, there is no contradiction or conflict. The secret to effectively changing our beliefs is in understanding and consequently believing that we really aren’t changing our swing trading beliefs we are simply transferring energy from one concept to another, one that will help us to fulfill our desires or achieve our trading futures  goals.