Trader Mindset

This page is a work in progress to help with trader mindset (particularly worth reviewing when I have a bad day).

Fundamentals of a Trader Mindset

The 4 Ms of Trading

The four Ms are:

  • Markets
  • Method
  • Money Management
  • Myself

Markets

  • Do the market hours fit with my day
  • Is the volatility ok for me (will the moves stress me out)
  • Does my method suit the market I want to trade
  • Are you clear what the market is doing?

Method (least important)

  • Does the method suit me and my circumstances
  • Is it clearly defined? No grey areas/no conflict
  • Am I trading the correct method for the market environment

Money Management (most important)

This really means risk management.

  • Are you capitalised enough for your market
  • How much risk am I prepared to trade
  • Never trading without a stop loss, never risk too much so you can come back another day

Myself

  • Do you have the support structure around you to trade (family, mentors, etc)
  • Are you well rested and healthy. You need to be to handle stress.
  • Are you financially comfortable. If you need money don’t trade.

Working from a foundation

This is probably one of the most important things I’ve learnt since I started. If you don’t have an approach to your trading that you can measure and compare yourself against you have no real idea if you are improving or just lucky.

Risk Management

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Dealing with stress and trade anxiety

The power of taking time out / away from trading to refocus

The power of taking time out / away from trading to refocus

You learn a lot when you’re going through a drawdown period [where to make tweaks/improvements]

Dealing with losers and poor performance

Putting losing trades in to context

It’s just one of hundreds of trades that you’ll make.

You never stop learning


Not a fan of this guy but he makes some good points. Interesting that he said it took him 2 years to get consistent trading.

Keeping up moral when things seem to be going sideways

2nd half of the video.

If you’re account is going sideways – you’ve built up experience without losing money!