The proper mindset can go far to improve one’s trading results. Successful traders have a carefree attitude when it comes to trading. They have little difficulty executing trades. They don’t second-guess their decisions and they are not overly influenced by their emotions. How does one develop a carefree attitude? Let’s review some of the necessary conditions.
Look at the bigger picture. Don’t focus on the outcome of a single trade. Think of the bigger picture. You may lose on a single trade, but across a series of trades you will come out ahead if you have a trading strategy that works part of the time. Successful traders plan on executing many trades and know that not all trades need to be winners in order to increase the equity in their accounts. It’s your success overall that counts. Keeping this in mind takes some of the pressure off.
Use proper risk management. Successful traders risk only a small percentage of their trading capital on a single trade. Limiting the risk on a single trade further relieves some of the pressure to feel that every trade needs to be a winner.
Don’t be afraid to admit you are wrong. Maladaptive beliefs can be a trader’s worst enemy. Many times one may think “I can’t be wrong on this trade” or “I must capitalize on every opportunity to make a profit.” These expectations are so high that they can because of fear and anxiety. When you hold such high expectations for your performance, you place too much pressure on yourself, and cannot maintain a carefree attitude.
Gain awareness of personal conflicts and try to resolve them. The desire to resolve unmet psychological needs interferes with maintaining a carefree attitude. Examples of psychological needs include the need for self-worth, the need to prove one’s value or the need for close personal relationships. These needs must be satisfied in a satisfactory manner in order to maintain a carefree attitude. If these needs are not met, one is likely to secretly wish that by winning big in the markets, conflicts arising from these unmet needs will be miraculously resolved. It doesn’t work that way. Performance in the markets cannot help one satisfy these needs, and believing that they will, consciously or unconsciously, can be the greatest interference for maintaining a carefree attitude.
Following these guidelines will help put you on your way to developing the carefree attitude associated with trading success.