Trader Mindset

Write out a short list for some of the things that you're grateful for. This is your Gratitude List and it can help you feel a little bit better about things when you think nothing is going right.

You can try this just when you think you're gas tank is empty and you don't know where your next source of motivation might come from. Do everything you can to remain persistent and determined.

If you have no trading edge, where you execute your business doesn't matter.

Putting space between yourself and the market can be refreshing.

You don't have to do this only when you're losing.

You can learn trading faster intellectually rather than emotionally.

That's why it's easy to understand, but hard to do.

Your emotions can get the best of you, stop you cold in your tracks, kill your confidence, and keep you at the level of a very knowledgable spectator.

Just like professional athletes and competitors prepare mentally for a match, so can you.

In fact, you have to. You can't just wing it.

Intentions equal results.

Put it in your mind that you are going to achieve your goals then go and do it.

Here's a great example of how to combine your passion for one area of your life that can potentially benefit your business.

Michael Martin discusses how you can get potential clients to come to you.

People do business with people they like - so be likable.

If you're a fly fishing nut and know all the best spots to fish, you can find like-minded people to cohort with by joining a group or association that is passionate about fly fishing.

Or even better, you can start a weekenders fly fishing getaway for which you are the guide.

Successful businessmen like to fish and be outdoors, so it's a good group to affiliate with. They have the success, the business acumen, and the capital to risk to either back your company or become clients.

Setting personal goals in parallel with you trading goals can have a 1+1=3 type of payoff.

For one, achieving personal goals can give you a boost of confidence and raise your self-esteem. I generally believe that it's impossible to do anything well if you lack confidence.

Trading is a game of failure and learning to succeed in the face of low accuracy and high expected values can help you develop the mental stamina necessary to survive periods of time where you have no evidence of any trading skill.

Two, having personal goals keeps your brain in a mode of "figure-out-ability" that is critical for trading success. Your trading tactics and methodology is going to come from much trial and error.

When your brain is conditioned to figure things out, you're in a natural state of "curiosity leads to revelation leads to eventual solution."

When I have had to come to the trading whiteboard "cold" so to speak, it took me much longer (days and weeks) to get my brain in gear to figure out a solution.

Lastly, you'll meet new people along the way when you have similar interests. People tend to like and become friends with other people who share experiences.

Maybe some of these people would be interested in learning about your trading process and hiring you to manage the money?

Position sizing has the most impact on your P&L, so make sure you get it right.

In strongly trending markets, you can throw a dart to pick your entry and make a ton of cash.

The position size is the part of your trading algo where the sword cuts both ways. It's also the part of your trading that goes to the core of any self-doubt you might have about your ability.

Trade to big and bad news and bad luck can hurt you badly and destabilize you for weeks or months. Trade to small and never get anywhere for all your efforts (it's possible to trade too small and not have enough risk to meet your financial goals).

In this episode, Michael Martin discusses several things to consider as you carve out your methodology for position sizing.