This one is really going to surprise you.
DON’T EVER THINK ABOUT MONEY WHEN TRADING!
I know it sounds insane, but if you ever talk to professional and successful traders they will tell you they never think about the money.
This is a trap I still fall into occasionally, think in $, P/L (profit/loss), wins and gains. But it simply doesn’t work in trading. And it gets me in to trouble. I work on this every day.
So why is this a big no-no?
Here’s the reason why money has nothing to do with trading.
Becoming a day trader is a skill that needs to be learned and honed and crafted. You have put in time and then continue to learn and grow.
I like to think of day traders like doctors, or athletes (the mindsets are very similar) this is a performance activity that needs lots of practice and understanding.
So if we look at it as a doctor, does a doctor think of how much each patient is going to pay her for each operation she performs? No, she goes in there focusing on what needs to be accomplished.
Does Kobe Bryant think of how much he’ll be paid for each game? Not at all! He only focuses on the proper way to manage the ball and himself in different situations.
A trader’s job is to read the charts. To see what the market is doing. It is 100% technical. Meaning, it’s not about the money. It’s understanding where we enter the market. To see what Mr. Market is telling us to do at that moment. It is following the rules you have with your trading plan and strategy.
Just like a basketball player who misses some good shots, traders can take good trades that simply go the wrong way.
But it was making the right decisions.
Anyone can take a lucky trade, win big, and think they are trading. Just like I can get on the basketball court (I never played basketball) and make a 3 point shot. It doesn’t mean I can do it consistently or even repeat it.
In trading, you will see that once you start trading with a plan, if you make the right decisions over and over again, even if you take some losses, you will feel good, because eventually the profitable trades will be more often than the losers.
And after your trading session, if you did all you had to do, you will leave your station feeling great, confident.
I remember working with a business coach for a long time and she kept on telling me I have to think about the money with trading (she was definitely not a trader).So I eventually fell for the trap to think like that. I went crazy with my trading, taking way too many, most nothing to do with my plan. At first, I was doing good, but eventually, the inconsistency of it all got me and I started to lose – rightfully. So since I was only focusing on the dollar signs.
She taught me many amazing things for mindset (which I am able to apply in other ways). But working with her made me realize I needed to work with a mentor specializing in day trading. That’s when I took my studying and training to higher levels. Invested way too much money (LOL) into private training, one-on-one and group classes and so much more.
And this is where I really learned (from truly successful traders) THEY NEVER LOOK AT THE MONEY.
This is like trading 101 – it’s all about making the right decisions.
The same as in life. We have so many things that require us to make decisions. And I’ll be totally honest with you, I was a very weak decision-maker. Changing my mind a hundred times, not being certain, and usually, that’s when things didn’t go well.
But now that I am a stronger decision-maker, it’s like a muscle, I see that I am able to take this to all corners of my life. Don’t get me wrong, I still make bad decisions once in a while – we’re all human and it’s normal, but it’s way way less than before and getting better each and every day.
As long as you focus on what needs to be done, and making the right decisions, you will be successful!
Make sure to catch the Part 1 of Bad Habits of Day Traders and Part 2 – Profit Targets and Part 3 – Chasing Trades
After that, if you have any questions you can always ask me at traderchick.com. Come to my Facebook group and introduce yourself, let me know your experience with trading.