By Areena FxWhen the trading path is painful, you listen to your frustration and pain.
And what you’re hearing is your psychology, patience, and discipline are off.But fixing those does what?
You make fewer errors? Fewer impulsive trades? Does that really fix the problem?
You reduce your size or even move to SIM, getting the mental inferno under control.
And then what happens?
Without the pain of losses decimating your account, your consistency hasn’t improved.
The smouldering keeps on, and you’re at your wit’s end. Sound familiar?
Keep reading for a new perspective and approach to trading that puts your trading psychology on cruise control.
The path outlined above is nearly identical for everyone who gets into trading…
Including those who go on to have rewarding and self-fulfilling trading careers.
But here’s the thing
Roger Federer only won 54% of his points. Like tennis, trading is not a game of perfection.
So while it feels like your psychology is the issue, great trading is often riddled with human mistakes.
Consistent profitability is achieved despite these errors.
Psychology is crucial in trading. But the real game lies in understanding others’ minds—not your own.
As the most successful trader of our time, Jim Simons famously said:
“We don’t want to predict price, but we want to predict when other market participants are going to do something.”
I’ll show you what it looks like using real trading in a minute:
But first: What’s intriguing about focusing on the minds of everyone else?
Not only is it vital in reaching consistent profitability…
It also profoundly shifts what’s going on in your mind.
Let me explain
This new focus on others requires your full attention.
It’s not different from the focus of a surgeon, race car driver, or musician performing.
And this full attention uses all your mental RAM (to use a computing analogy).
Ask yourself
- During a race, is a driver thinking about breakfast?
- Is a surgeon worried about traffic during surgery?
- Is a pianist thinking about the weather during a solo?
No! Right?
Because they’re all 100% engaged in what they’re doing at that moment.
And it’s the same when you’re focusing on the minds of others in the market.
It requires your 100% mental engagement.
Shifting your focus to others transforms your trading and puts your trading psychology on cruise control.
Mentally, you don’t have space for sabotaging thoughts which can undermine your trading.
I know this sounds incredible.
Solving two issues in one: achieving consistent profitability and solving what you thought were struggles with your trading psychology:
First, adopt a new way to trade.
But before you get stuck—not wanting to change due to a sudden case of a sunk-cost fallacy—consider this:
Even though no one I’ve worked with to reinvent their trading knew any of the material, concepts, and skills I share…
I only work with people with years of trading experience.
Any guesses as to the reason why?
As painful as it is, experiencing the full gamut of trading emotions provides the much-needed context to learn how others think and act.
To quote Ray Dalio: “I believe anyone who has made money in trading has had to experience horrendous pain at some point. “
Now, watch this play out in real trading: Two examples follow of how understanding others’ minds transforms your trading.