This is a guest post from Tino @tradersreality. This article originally appeared on tradersreality.com and is reposted here with permission.
Consistency is the one skill that every aspiring trader desires to achieve. It is also the most difficult to master. However, with the correct tools and knowledge, anyone can enter the arena of trading and succeed.
This post is going to reveal my journey towards the point of consistency. I won’t be talking about how much I have made on the market, what system I used, my stop losses, balances. All these factors are irrelevant to what I am about to reveal to you.
Most importantly, I will reveal everything I used to get to the current position I am as a trader. I will share the thought processes and the adjustments I made that helped me come to the awareness of where I was going wrong. I believe what I share may help someone who is struggling to break psychological barriers that trading introduces. I’m not saying I can guarantee you success, but what I will say is if you follow the procedure that I did, you will most definitely produce results. You have to want it really bad and make the commitment to educating yourself and learning how the market works.
I will give recommendations, (I only like to give recommendations if I can back up its relevance and purpose. I want to make sure that its valuable and credible to whoever is reading this post).
So Here goes…
How long Can I Keep losing?
You probably wouldn’t fathom how many times I considered to quit trading. It’s very difficult to invest so much time in this craft and not see any results from it. If you read my first post you would know that I lost quite a lot of money on my first attempt at trading the markets. It was certainly a soul crushing experience that made me realize that there was so much more to trading than simply placing a trade and hoping that my analysis would play out.
Ill be honest, in my 8 years of exploring my craft, it was only the last 4 years that I came to the realization that there was something deeper that needed to be addressed. All along, it was right there in front of me. I simply didn’t pay enough attention to it… My Psychology.
The psychology I traded with previously, had cost me so much money. If anything, I’m confused as to how I was able to lose so often when I had everything I needed. I had a system that I had pretty much mastered its application, I had the capital, I had the time. But I just kept on losing.
Moment Of Realization (Again)
At some point in a traders career, they come to understand that something is missing in their trading approach. They follow everything by the book: “Cut your losses short” ” Ride your winners” “The trend is your friend”, but they still lose. They still fail to cross that barrier of “Consistency”.
Having made the decision to pay more attention to my psychology when I trade, I decided to pay attention to my emotions and look deeper into the way I “think” when I trade. I started to do the following:
- I kept a “thought journal”
- Traded when I felt “good”
- Traded the most active times of the day.
- Avoided any disturbances.
Now I thought that if I paid attention to my thoughts during my trading I would be able to determine patterns of behavior, which would then allow me to analyze what I could improve on. This new approach to trading ended up being quite productive. My “thought journal” allowed me to see the mistakes that I was making over and over again: I was always frustrated, I kept saying to myself ” you’re a bad trader” ” you are wasting your time” I also found that I always started to become “tense” whenever I had a trade on and I didn’t see it perform the way I wanted it to. This behavior then led me to close trades too early or held them too long, to only see them reverse and take a loss.
Dwelling upon my thoughts, it hit me… The only way I could change the way I traded was to reset my mind. HOW could I reset my mind? There are so many factors that affect thinking and the mind. Experiences during childhood may have had a detrimental affect on the way I perceive trading. E.g. If failing was seen as wrong, then you end up growing up trying to avoid it. Well trading is all about accepting losses. So fearing failure can lead to impulsive decisions that leads to irrational trading.
Now up until the point I realized I needed to reset my mind, I had managed to install bad habits and made them occur without knowing they were present. This in turn, was effectively compromising my trading and I just couldn’t be consistent at all. I just kept losing and blowing account after account. I hit rock bottom. I invested so much time into this trading and I was not seeing any fruits from it.
Back To The Lab..
Over the past 8 years I accumulated a vast library of books on the field of trading. I probably have around £3000 worth of books from established traders in the field. I needed to explore how they trained their minds to establish consistency in their trading.
Now don’t get me wrong, the content that most of these books had was very valuable, but it was some what cryptic.
There was never a clear and concise answer.
It would always be “You must be disciplined” “Cut your losses” ” Don’t over leverage”. These nuggets of advice were great and they still hold value to any trader. But for me, it wasn’t enough, it just didn’t help me overcome the reason why I was losing so often.
If there was a common trait that I found with all of the books that I read again, it was this…”You have to be calm”. I came across this sort of sentence many times in the books. Other books would say:
- You cannot be emotional, you won’t remove emotion but you can control it.
- Do not allow the Monkey Mind to take control.
- Never Trade angry. A Loss is an opportunity to explore where you went wrong.
- Maintain a positive state of mind.
- Trading must be boring for you. If it is it means you have no psychological attachment to any wins or losses.
The comments above opened a vortex of knowledge that i needed to acquire. I had no idea where to start. How was I going to train my mind?
It was Saturday afternoon. Markets were closed. I wanted to utilize the weekend to study and gather information on how I could train my mind. I browsed the internet, I purchased more books. I literally invested in everything that mentioned psychology.
There are some good books out there, however there was nothing that suited the way I wanted to learn, more so, most of the books I read never really touched upon the deep psychology of trading Forex.
As I was browsing on Amazon I typed in “Psychology of Forex”. The first book that came to mind was “Paradigm Shift”. This book dived into the true psychological elements that every trader encounters.
As I was reading this book, I felt I was reading about myself. Yvan (The author) made no hesitation to mention his experience on his journey. He too was losing money and he wanted to determine why this was the case. So I purchased the book, and checked out his website for more information.
Paradigm Shift walks you through the cognitive thought processes that hinder a trader and how you can apply meditation to control these thoughts.
Whilst reading the book I realised that I had struck gold. I knew that i needed to improve my psychology and this book introduced me into ways that I could achieve this.
Yvan explained how meditation helped him become consistent in trading. Now I understand, meditation is not a practise that everyone can do. Our minds are too preoccupied with many thoughts and our daily routines are packed with things to do and places to go, I mean how difficult is it to find time to meditate for 15 minutes a day…? or should I say…How Badly Do You Want To Be A Trader?
What Have You Got To Lose?
After I finished reading the book “Paradigm Shift”I was introduced to an option to purchase his course that would reveal the processes that he under took to get to where he is today. The Trading Psychology Mastery Course.
Now I thought to myself, is this another case of a seminar in London that I attended where I was sold an idea of how to improve my trading, or did this guy have credibility with what he taught?
The book revealed more content regarding trading Psychology compared to other books I have read.
Even as the pages were coming to an end, I wanted more information from this guy. He was able to hold my attention from the start. This guy changed the way he traded from losing consistently, to winning consistently, no different from the way I was trading, and he did this all with Meditation.
I literally had nothing to lose. All avenues had been explored. There was nothing else for me to do. I believed that if this course was going to change the way I traded, I would then become the trader I have spent 8 years looking to develop. I purchased this course with the intention that if it was not successful for me, I would quit trading.
I made the commitment to myself. I will do everything that this course asks. If the approach taught changed the way this guy traded, then it will do the same for me. Only if I commit.
The structure of the course was quite unique. Everything was simple and understandable.
There was no carrot being hung, whatever this guy said in his short videos and short texts was clear and concise.
The beauty of this course was everything had been organized in sections and I could refer back to it in my own time. What I thought was really genuine (on Yvans behalf) was the course modules would only be revealed 2 days after each section was completed.
Now lets face it, whenever you buy a book or course, humans are curious, so if you see something you want to read about straight away in the chapters, you go straight to it. Not with this course. You were given a few days to digest and review each section that you had studied. This was symbolic. It was programming you to be patient. A necessary requirement in trading.
Yvan makes it very clear that in order to master trading you must be mindful. I just couldn’t understand how he was able to train his mind to accept certain realities in trading that the average trader finds difficult to over come.
The course starts off with a commitment form that you must sign and print off. This a form that you have on your trading desk. Its a declaration and a promise.
For 2 weeks I would practice abstinence from any trading related activity.
2 WEEKS…Man that was difficult to comprehend.
I mean all along I am of the belief that I needed to watch the market and trade all the time, keep up with the new feeds, listen to discussions on the economy and how it affected each currency.
I had to completely close off from trading if I was to give myself the chance of succeeding. As difficult as it was, I promised myself, and signed my declaration and pinned it to my wall.
During the two weeks I felt a change. I felt as though a weight had been lifted off my chest. There was no rushing around trying to catch every move the market made, no downloading podcasts listening to economists talking about how good or bad a currency was. No checking charts, no looking at moves that I have missed and feeling like shit about it. I felt free.
It then made sense, in order to trade mindfully, you must eliminate any noise that goes on in your mind which could affect any of your trading decisions. At this point, the course was demonstrating how to meditate and clear your mind by focusing on your breathing.
I meditated for two weeks. Every day for 15 – 20 minutes.
Now it would be an understatement to say that all along, meditation was the number one factor that helped me transition from a losing trader to a consistently profitable one. Hands down, had it not been for Yvan’s course, I would still be battling with my mind figuring out how to become consistent.
The course showed me techniques on how to calm my mind. It demonstrated the way to control your emotions and why we experience these emotions.
You will never rid your emotions in trading. You will always have emotions up until you die. Because no one dead has feelings, which means emotions are biologically triggered.
Meditation allows you to control these triggers which in turn allows you to trade mindfully and avoid making emotional mistakes.
So Here I Am…
I have learned that without furthering my education and investing in Yvans course, I would not have been in the position to share with the world my awareness of my mistakes I have made in trading and how my awareness of my emotions and the management of them, have led me to be a consistently profitable trader. I know that there are traders out there that are or have been in my position.
I take this opportunity to thank Yvan for sharing his method to the world of Forex. It has changed everything for me. It gave me the final piece to the puzzle.
I now Trade Care-Free.
I have no attachment to any trade. My goal as a trader is to be engaged with the market, trade light, monitor losses and understand that it is all down to the LAW OF LARGE NUMBERS. If you do something correctly 60% of the time, you will experience a 40% variance. The goal of every trader is to with stand the variance by keeping their trade sizes light and keep their mind calm during the draw downs. You must trade mindfully and remember its OK to be wrong. Entering my trading day with these thoughts in my mind… is HOW I BECAME A CONSISTENT TRADER.
Trade Carefree My Friends.
If you want to find out more about Yvan check out his website lots of content on there that can help you out with any trading related activities.
You can follow Tino on twitter at @Tradersreality and visit his website at tradersreality.com.