Trading Psychology Tip #1: Detach yourself from the results and attach yourself to the process
I get it…
You want to make money from the markets (who doesn’t?).
To quit your 9-5 job and be your boss.
To make trading your main source of income.
To help you pay off your debts and medical expenses.
Now let me tell you as early as now…
All of those things are entirely possible!
But being attached to those goals too much will give you the false impression that the markets can fulfill them.
And you’ll think the markets must hit all of your take profits and avoid your stop losses!
However…
Having such expectations is incompatible in a trading environment.
It will move money further away from your pocket and limit your growth as a trader.
Don’t believe me?
Let me prove to you…
Let’s say that you’re currently on a losing streak and that you’ve entered a trade on Silver on the 4-hour timeframe:
This time, you’ve done your due diligence.
You’ve made sure that the:
- Technical analysis
- Fundamental analysis
- Statistical analysis
- Sentiment analysis
All goes in favor of your trade.
So of course, you’d expect the markets to shoot up like this and give you all the gains, right?
Now, what if the market immediately goes against your favor…
What would you do?
How would you feel?
If you lost the trade, would you increase your risk on the next trade?
Will you move your stop loss lower, or will you remove it altogether and become an “investor?”
Do you see what I mean?
Imposing your expectations in the markets makes you focus only on potential gains:
While trying to put yourself a blind eye to potential losses:
Some traders even insult and attack other traders whenever they are being met with information against their position!
So, how do you trade without expectations?
Will I tell you to make sure you have a well-defined trading plan with an edge?
Sure, but not for today, because you can learn more about it in this article here.
Instead, one solution that you should look into is to…
Reduce your trading balance relative to your networth
Just because you have $10,000 in your pocket doesn’t mean that you have a $10,000 mindset when trading such an account size.
Let me show you what I mean:
Imagine this…
You have a $10,000 trading portfolio which is more than half of your networth.
However, you’ve only entered less than 30 good trades (low skill) with discipline with little results to show.
So, you’re trading with confidence you don’t have yet.
What do you think’s going to happen?
Well…
You will have this IMMENSE pressure while trading the markets, of course!
Going almost all-in on trading the markets means that you’re expecting to grow your account.
There’s also an emotional attachment to your portfolio.
Since you know that expectations in the market don’t work…
What’s likely going to happen is that your portfolio would decline along with your networth while you’re also not improving as a trader:
See what I mean?
So as a trader who hasn’t found consistency yet, what should you do instead?
Simple.
Start trading with a small account size relative to your networth.
This time…
You’re trading almost without any attachment to your portfolio.
You’re not afraid to take a couple of small losses in the markets.
You’re focused on improving your skill and your growth as a trader by taking one good trade at a time.
You’re now treating trading as a business and not a hobby.
Now, what would happen once you’ve consistently played your edge and executed more than a hundred trades?
Your confidence as a trader would be at its peak!
Since you now have high trading confidence, who’s to say you can’t continuously deposit more funds into your portfolio?
Can you see how exciting this is?
Once you’ve detached yourself from the results and attached yourself to the process…
You’ll start thinking about how to expand your trading business beyond your imagination.
You’ll start to out-grow your goals and have bigger goals.
And you’ll start to see charts objectively:
Now wherever the market goes, you’ll have a plan ready to execute.
P.S. All of the illustrations shown recently are for educational purposes only and not financial advice, however, I do request that you extract the principles that I have shared with you.
Great!
Now…
I know that I’ve shared with you a robust concept of how you can grow your trading business.
But the next thing that I’m about to share with you will be your foundation to reach the end of that trading business plan…
