In the world of trading, you have to have strong mental acuity to succeed. Many new traders don’t realize that stock trading is a very mentally challenging task. Aspects like trading psychology require an understanding of your own mind and the minds of others. It’s not all facts, figures and a pinch of luck — a great trader is an intelligent person with a strong mindset.
Thus, developing that strong mindset is a necessity if you want to succeed in the world of trading. Don’t worry — this isn’t a skill you’ll only need to use for trading or that will never come up in your life again. Developing a strong, successful mindset will be an asset to you throughout your lifetime, whether with another business venture or during a personal struggle.
A mindset built around success is a mindset that will bring you that success. Not sure how to develop this way of thinking? We have some thoughts on how to make this happen for you.
- Put an emphasis on the future.
It’s actually wise advice to ground yourself in the present and not to overthink the future — but to look towards success is to look ahead, isn’t it?
The tip here is to find an appropriate balance between planning future goals and not stressing too much on what can or will happen. The way to do this is to put an emphasis on the future when it comes to your decision making viewpoint. Ask yourself questions like:
- Where will this choice likely lead me?
- Will spending this money be a wise investment a month from now?
- How important will this decision be a year down the road?
Questions like these don’t necessarily stress us out about the future, but they do exercise our concept of risk. Mitigating risk is a big part of trading, and it’s also a big part of making decisions in your life. Think twice, do it once and the consequences will come, positive or negative. Being sure in your informed decisions is a sign of a strong mindset.
- You vs. Them
Don’t worry — this tip isn’t as aggressive as it sounds. In fact, if anyone is the victim of aggression, it may be you!
The problem? The aggressor is yourself.
It’s crucial that you hold yourself to the same standards as those around you and strive to push yourself, but it’s also important not to disrespect yourself. An exercise you can perform is to think back on how you reacted to a friend in a specific situation. Perhaps a fellow trader made a mistake and lost money on a trade. How did you react to their failure?
Most good friends will offer encouragement and maybe some helpful, soft criticism. However, if you make that same mistake, do you beat yourself up and judge your own faults more harshly. Ask yourself why the difference in how you treat yourself versus how you treat others is so noticeable.
“Isn’t that part of having a mindset for success? Expecting more from ourselves than we do from others?” No. We often think of mental toughness as the ability to take a constant mental beating all the time, but these things aren’t synonymous. Constant self-abuse doesn’t create a strong mind — it’s the sign of a weak one.
- Build confidence in the face of obstacles.
Failure isn’t the enemy. You’ve probably seen similar quotes stenciled on motivational posters and coffee mugs. Something along the lines of “failing just means I’ve learned what not to do next time?” As cheesy and corny as it may seem, it’s 100% true.
People often associate getting back up after being knocked down with courage, but let’s take it a step further. In order to be sure of yourself and your success, you have to have confidence in your abilities. This can be your talents, your skills as a trader, your potential to meet your goals — confident people are more likely to succeed more than anyone else.
Why? They’re the kind of people who visualize a goal, believe they can achieve it, and then they go out there and make it happen. Confident people are doers, and that’s what makes a strong mindset.
However, confidence doesn’t grow on trees. It comes more naturally to some than it does for others. Building confidence takes time, but then so does building a strong, successful mindset. Don’t be afraid to take baby steps and gradually build your faith in yourself. This will come easily once you learn to acknowledge and dismantle your “You vs. Them” mentality.
- Train yourself to commitment.
One of the biggest aspects of a strong mindset is the ability to commit to a task and execute it. This may seem easy, but for many it’s a lot harder than it looks.
How well you did in high school/college/university can be a good indicator of your ability to commit to something. Think about a big project you were tasked with completing — an essay, a presentation, etc. Did you knock it all out in one night because of procrastination? Did you work on it a little at a time and responsibly finish within a reasonable time frame?
Commitment is being able to take a task and dedicate yourself to it reasonably, and some people just aren’t built for that. The good news? You don’t have to be built for commitment to be successful. It’s all about training yourself to commit to goals.
This takes diligence, which is another important aspect of a strong mindset. You have to be able to acknowledge that you need to get work done, set out to do it and complete said work responsibly. Commitment to seeing something through will serve you will in all areas of life, from relationships to trading success.
- The ability to empower yourself.
Finally, an important tool in building a strong mindset is the ability to empower yourself from within. Many people believe in tangible forms of motivation, like celebrating success with a predetermined reward of food or a gift. Someone with a mentality built around success doesn’t need an outside source to motivate or empower them — they are motivation enough.
You are in control of your life and your destiny, which also means you are in control of how motivated you are. If you really want to get something done, you can do it without a steak dinner or a new pair watch. Nothing is required to motivate you, outside of your desire to succeed and become better than you already are.
To build a strong mindset is to live with purpose. You have a goal, and you are willing to work hard and think critically to meet that goal. You celebrate yourself and your accomplishments because you were motivated enough to make them happen.
It takes a strong mindset to become a successful person — but how strong is your mind right now?