Skip to main content

What does a Successful Trader do and Others don't?

stockmarketadvisory.in

The market likes to play with our nerves. It will do what it does best: shake the most amounts of monkeys off its branches.

This means that stress and high-pressure situations (as a result of uncertainty) are unfortunately absolutely inevitable.

All too often, traders are ill-prepared for this.

In this blog, I want to share 4 things that winning traders do to help them think and act better when faced with uncertainty and high-pressure situations.

1.     They Have a Winning Trader Ritual

The first thing is to realize that high-pressure situations cause us to do the exact opposite of what we would do if we were going to do things well.

What this means is that when the market does something that we absolutely didn’t expect, the instinct is to feel bad and shut down rational thinking.

Your heart races, your breathing becomes shallow, and your perception of the event is that it’s a dangerous assault on your sense of self-worth.

Winning traders have learned to embrace uncertainty as the name of the game. At all times, they’re prepared for the worst-case scenario.

Before the market opens, they have a ritual (or a set of rituals) that helps them relax and take on a winning trader’s mindset.

These rituals can be:

  • Meditation – helps them cultivate a state of focus, presence, and equanimity
  • Breathing exercises — brings more oxygen to the brain which helps them calm down and think better
  • Goal and success visualization exercises – helps with motivation and seeing the bigger picture
  • Positive affirmations – helps manufacture a feeling of confidence and ease
  • Negative visualization – done the right way, this helps them prepare mentally for worst-case scenarios
  • Listening to some calm and soothing music – helps distract them from their anxieties

Having such rituals is not only the stuff of winning traders. In fact, high-level performers (pro athletes, business people, professional musicians…) have sets of rituals that they do before performing.

These help them take control and change their state of mind from a closed-off, uncomfortable, nervous state to a confident and powerful one.

You don’t have to perform all the exercises above. Just do whatever you can and see how this helps you approach the trading day with more calm, more ease, and more confidence

2.     They Don’t Think of Uncertainty and High-Pressure Situations as Threats

Most traders see uncertainty and the pressure situations it engenders as threatening.

In turn, this undermines their self-confidence; impairs their judgment; elicits fear of failure, saps their energy level and motivation, and spurs impulsive behavior.

But, winning traders have learned to see those situations not as threatening but as simply fun challenges and an opportunity for growth.

So, try shifting your thoughts: Instead of seeing a danger or a threat situation, see a challenge.

We all have this incredible (warrior-like) desire to overcome challenges and prevail. Hence, when you start to look at difficult situations as challenges that you CAN overcome, you are stimulated to give the energy and attention needed to make your best effort.

So, make that “challenge thinking” part of your approach to trading (and life in general).

3.     They Over-Prepare

Winning traders perform well in high-pressure situations because oftentimes they know exactly what they’re going to do.

They have a plan, and they’ve taken the time to understand why that plan works, and why following it is the best course of action for them.

So, when faced with uncertainty, there’s no need to come up with any decision in the heat of the moment. Everything has already been figured out in advance.  At all times, winning traders know what to do, and they just do what they know.

Your proven plan is your best line of defense against market uncertainty, so make sure you have one, and make sure you’re following it.

4.     They Focus On Trading Well

We all have goals and want to make XXX amount of money in trading this day, week, or month.

But the thing is, you don’t get to decide that. The market does!

Your process and behavior are things you CAN control.

[Your process is what helps you get as close to your goal as possible.]

But the market and trade outcomes are things you CANNOT control.

If you are fixated on a certain monetary goal, you will obsess over every single price move; you will want to check your positions every minute of the day; you will tend to take every outcome personally; you will attempt things outside of your process just to hit your monetary goal.

This is not a way to approach trading because it gives you random results.

You don’t want random results, do you? So, you need a process, you need to stick with it, and you need to focus on trading well.

That’s what winning traders do. For most of them, money isn’t even the real prize. They like to play the game.

They play not for the sake of money, but to win!

So, they keep their eyes on their process (and only their process) because they know this is the concrete step necessary to excel in this field.

Last Few Words…

The market provides an endless supply of uncertainty and difficult situations.

Despite that uncertainty, you must arrive at a place where you can consistently make good decisions and actions.

Hence, handling the pressure that we all feel as a result of uncertainty is a skill and a critical one that you must learn.

These 4 steps I’ve shared above will help you develop that skill.

They’ll help put you in the right mindset and judge decisions not only on the results but on how they were made.

When you’ve come to this point, you’ve adopted the mindset of a winning trader. Good things are on the horizon.


stockmarketadvisory.in

Comments

Popular posts from this blog

Bull Call Spread Options Strategy ( With Practical Example)

I Strongly believe , to be Successful in Stock Markets you Require two things : 1) Edge 2) Hedge Edge means having your own Trading System , following your own consensus & Conviction. Hedge is like an Insurance Policy , it will protect you from losing big and also maximise your earning potential over time without Destruction of your Capital. I will be Sharing one of the Hedging Strategy here. Example : Nifty on Friday (5th June) has closed around 10150. You are Bullish for this Weekly Expiry and what you to do is buy a Call Option of 10200 which is Trading around ₹120. Buying or selling naked Options involves high risk as its equal to betting. If you win you win Big or else you lose Everything. So buying naked Options isnt my Cup of Tea. What will I do in this Scenario? I would buy a 10200 CE (11th June Expiry ) at ₹120 and would sell a 10300 CE (11th June Expiry) at ₹80 to manage my risk. Now there are 3 Situations which can happen : 1) Nifty continues to rise: The 102

Pre - Budget Analysis (1st Feb 2022)

U.S Markets closed higher yesterday. Most importantly , S&P 500 VIX crashed 10%. There was huge Volatility in global markets due to Fed event. Markets remain volatile only when they have topped out or have bottomed out. Right now I feel we have bottomed out at 16850. Asian markets are slightly lower now. Dow futures are lower. SGX Nifty is at 17500. Finally , the most awaited day has come. Budget 2022 is going to be presented today. Expectations are of a good and stable budget. Reasons are the Elections coming up and LIC IPO in March. Govt very well knows if LIC IPO has to go through , Market sentiment has to be good. Without good market spending it would be very difficult for IPO to go through. Market had already fallen a lot before the budget. Although we have rallied in last 2 days but still we have some upside left. Though I feel it's not favourable to chase today's gap up. Today's gap up is a good opportunity to book profits those who carried longs. Bud

Pre - Market Analysis (17th Feb 2022)

U.S Markets closed flat yesterday. Right now Dow futures are slightly lower. Asian markets are slightly higher. SGX Nifty is near 17380. Suggesting a flat start for the day. Yesterday was a heavy Volatile session. Markets have moved all over the place yesterday. At one point of time Nifty rallied and at one point of time we were ready to cross 17500. Then news of Russia came that Russia has not fully taken back their military troops. This led to a drastic fall in the last 2 hours. Nifty crashed all the way to 17300. India VIX came to positive. U.S Markets at one point of time were down quite significantly yesterday. But later during the day they have recovered most of their losses. Most importantly , U.S VIX fell 5% yesterday. Here as well we can hope markets to stabilize and VIX to collapse. Premiums are quite attractive considering only 6.days left for expiry  1000 points away put options are also trading at 20-25 rs premium. These put option buyers you know are crazy peo