The following is the beginning to a series of threads which detail what I believe will help aspiring traders understand the discipline and mindset required to attain a professional level of performance.
The information presented here comes from my years of experience trading independently, and trading for private equity firms. It also stems from my observation of near countless peers within my industry struggle to gain consistency, even with all the help an institutional level proprietary trading desk can provide, and what common elements the few who 'made it' had in common.
This content effectively started FXGears as a site, and was originally separate posts and threads I had written on other forums around the net which I later consolidated on this site to have a central place to reference my thoughts and writings.
After recently turning FXGears into a full fledged online community, I realized that the site should be focused on the community itself, and not just my articles. So I reformatted the entire series back to their original medium as forum posts and removed them from FXGear's front page.
Now, as threads within a forum, you the reader can interact and respond to each section/topic as so please.
So read on, start a conversation, ask questions! It's a forum after all!
This is the start of some major changes for the site that will pave the way for trading tools, market information, and other features that the community can utilize. It's an exciting time for FXGears. We're going places.
Without further delay, I present the introduction and first thread of the series:
Table of Contents:One:
(This page, no need to link, Just keep reading below.)Two: Exercise and Understanding the Impact of Trading on your EmotionsThree: Meditation, Visualization, and Positive Self-DialogueFour: Purposeful Practice, sizing up, and why to Keep a Trading JournalFive: Clean your ChartsSix: Support and Guidance for Tribal Minds - Part 1Seven: Support and Guidance for Tribal Minds - Part 2Eight: Losers Average Losers, Averaging Down, and Griding it OutNine: Decision Tree Trade ManagementTen: Points not Dollars, and Non-Monetary Trading GoalsEleven: Never Take Advice From Friendly Strangers and Series Conclusion
Being a professional is, before anything else, both a lifestyle and a state of mind.
If you dream of becoming an independent trader, but feel the need to command a prestigious job title, or own a ultra large account balance, just to have the sense of being "professional", you're in the wrong game.
There's nothing wrong about that. Seriously, the majority of people out there will tie their self-esteem (and judge their peers) to this metric. If this is you, and you love the markets/finance, go out and get a job at a brokerage as a sales/account rep, or work for a large company where years of tenure will land you with some VP title and a nice salary, and enjoy life. Don't attach your idea of 'success' to trading results alone, you'll only end up frustrated an in emotional pain (and worse yet, you might find yourself sour on the industry as a whole.)
However, if you're not interested in living life where title and prestige come first, and you seek the kind of fulfillment that can comes from taking total control over your actions and emotions, even against humanity's strongest instincts and psychological flaws... then the life of a professional trader might just be a good fit for you.
"nanos gigantium humeris insidentes"
"...If I have seen a little further it is by standing on the shoulders of Giants" - Isaac Newton (but this ideology stretches far back, well before his time.)
Most things you'll read in this series of threads might have already been published by various authors in the past. I'm not reinventing the wheel here when it comes to trading psychology or the professional mindset. Instead, I aim to highlight select bits of info that, I feel, showcase the acme of skill in trading and with that do my best to right the path may aspiring traders are currently on.
Here's the best part; we're not even going to talk about trading itself right now. No, that's going to be far down the road from this point. Right now, we have a much greater challenge ahead of us: We must undo thousands of years of instinct reinforced by your life's experience that lead you to where you are as a human being right now.
We must first understand thyself before we can understand how the market affects us.
With that said, I'm going to ask you to do something if you're currently trading live and any of the following applies to you:
- You've been trading in general for less than two years.
- You're net negative return wise across all trading accounts (even if you're positive on your current account. Tally up all net deposits vs returns since you started.)
- You have a drawdown on your account of greater than 20% from its peak.
- You are frustrated with your current trading results or current strategy.
- You haven't written out a trading plan or journal before, nor can you remember when the last time was that you didn't violate your personal trading rules.
You are to STOP trading right now!
Don't worry about missed opportunities, the market will provide you with many more. Literally an unlimited amount of opportunities will be found, so don't sweat it. What's important now is that you limit the risk you can inflict on your own accounts while you're taking this time to reflect and sort things out.
(Notice I didn't say "limit the losses", but instead, I said prevent your account from being subjected to "risk" in general? Risky trades could go your way, but that doesn't remove the risk you took and the chance that it could go wrong. A gamble of a trade working out is still a negative for your development as a trader, which we will talk more about as this series goes on, and right now we must do everything we can to stop reinforcing bad habits.)
You will not trade again until you can prove to yourself that you're ready and properly focused.
This is both an exercise in discipline as well as a chance to clear your mind as you continue reading this series. If you do not have the discipline to stop yourself, you should seek out your local Gamblers Anonymous organization and sign yourself up. I'm not joking; if you can't stop yourself from trading, seek help, trading can be addictive and if you don't have control over yourself on this level then you have a problem that will prevent you from excelling in this field (and will most likely end up hurting you in the long run.)
Now with your accounts disarmed let's get move on.
The next installment in the On Professionalism thread series can be found here: Exercise and Understanding the Impact of Trading on your Emotions