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What is the Ideal Trading Mindset? The Inner Psychological Aspect of Trading:

The proper trading mindset is what sets apart the consistently profitable traders from the losers. Over 90% of traders fail and the primary reason for it is psychological. It’s undeniable that the majority of hopeful traders are blind to what it really takes to be successful in the market environment. More often than not, it takes years for traders to realize that their mindset is what is holding them back. And unfortunately even more time to not only accept this fact, but actually figure what they can do about it. The good news is that there are trading psychology resources out there to help, and hopefully they find and utilize these resources closer to the beginning of their trading journeys before it’s too late.

Mark Douglas what is trading mindset quote

The truth is that long-term consistent profitability will never be achieved without the proper principles, beliefs, and perspectives etched into our minds. Without them, we’ll constantly fall victim to our fears, greediness, cognitive biases, defense mechanisms, and other self-sabotaging tendencies. This topic is so important to understand because the characteristics of the market environment are unlike anything people are used to in their typical day-to-day lives. We’re born into a society that already has rules and laws in place that are meant to protect everybody. But that control and structure is on us to create for ourselves within the limitless market environment. Most traders simply aren’t mentally prepared to invoke this kind of restraint and discipline upon themselves.

3 Steps Required to Stop Struggling Both Mentally and Financially as a Trader:

1. Understand the Realities of the Market

The market environment presents both unlimited opportunity and unlimited risk. In other words, the market offers us complete freedom of expression as traders. But that external freedom that the market provides needs to be paired with an unwavering internal discipline structure. Because the lack of an internal structure is exactly what leads to irrational, impulsive, and ultimately inconsistent trading results. We’re so used to the outside world offering structure for us that it handicaps us within the market environment. But there are no parents, teachers, police officers, or any other authority figures that are there to put guardrails in place for the trades we choose to take. Blaming the market or any other external force for our misfortune does us no good. We can’t control the wind (the market), but we can certainly adjust our sails (our thoughts, emotions, and behaviors). We’re operating in an entirely new environment that requires complete internal control and accountability – something we’re not at all used to.

2. Discover How You Are Personally Wired

We’re all wired differently due to our individual circumstances, experiences, and references. We can put two different people in the same exact situation and they can have completely different thoughts, emotions, and actions based on their own individual perspectives. In essence, we have our own unique versions of reality. Our various biases, blind spots, delusions, insecurities, and expectations play a substantial role in forming our personalities. As diverse as we are, the one thing we can count on is that nobody is a “natural” trader. Sure, some people might have a predisposition for being more patient or resilient, but that isn’t enough to prepare them for the intricacies of the market environment. There’s a common misconception that successful individuals in other fields like lawyers, doctors, business executives, or even financial advisors would make great traders because of their intelligence and/or business knowledge, but that’s not at all the case. Intelligence is great, and being able to perform market analysis is also great, but it’s not the deciding factor in consistent trading success – it’s mindset. And these successful individuals in their own professions are no different than anybody else. In the end, we have to adapt and learn how to re-wire our brain if we want consistent success within the market.

3. Use Information From 1 & 2 to Align Your Mindset With the Realities of the Market

With an understanding of how the market works and how we are individually wired, we can then make strides to align the two “worlds” (external and internal) with the proper principles, beliefs, and perspectives. Successful traders have an internal structure in place that’s in harmony with the realities of the market. Unsuccessful traders do not. We can attain all of the market knowledge we want and think we’re great at predicting where the market might go next, but without the proper mindset as our foundation, we might be too paralyzed by fear, greed, and other disempowering emotions to actually follow our rules and act in our own best interest at all times. Inconsistent trading leads to inconsistent results. We don’t have trading problems, we have personal problems that reflect in our trading – it’s the basic concept of the mirror.  If we want consistent results, then we have to think, feel, and behave consistently. The bottom line is that operating within an environment that has qualities and characteristics we aren’t used to requires adjustments within ourselves.

Trading is Mostly a Mental Game – Mindset Dictates Success and Failure:

This isn’t just about “success principles” or “positive thinking”. This is about making actual changes in our attitudes, beliefs, and perspectives in order to become more effective traders. This knowledge needs to be practically applied in order for it to have any impact on our trading results. There’s no doubt that live trading stirs up fears, urges, and aversions that often lead to the breaking of our own rules and other destructive behaviors. So without a strong enough mental framework in place, it’s only a matter of time before our accounts and psyche are left in shambles. If we have any regard for our own success, and aren’t just involved in the market for the “thrill of it”, then we need to be completely obsessed with our mindset.

Top Rated Trading Mindset:Psychology Course

Thanks to concepts like neuroplasticity and activities like mindfulness meditation, we actually have the opportunity to become more self-aware and physically change the structure of our brain. All of our negative thought patterns and behaviors that lead to negative results can be replaced with positive thought patterns and behaviors that lead to positive results. When we continuously act in our own best interest, as hard as it may be in the moment, our brains start to build new neural pathways and associations. With repetition over time, those associations will become stronger and we’ll learn to link our strict adherence to our rules with long-term consistent trading success. Overall, it’s possible (not to mention necessary!) to change our mindset if  we want to achieve our ultimate goal of consistent profitability in the market. The inner game of trading is undeniably the difference between success and failure.

Don’t let your uncontrolled mind dictate your trading results. Take control of your mind to achieve the dream of consistent profitability.

Learn More in the Trading Success Framework Course

Written by Matt Thomas (@MattThomasTP)

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Matt Thomas

Founder of, Creator of the Trading Success Framework Course & Trading Paradigm Skool Community, and Intraday Futures Trader Using Auction Market Theory & Profiling (Volume & Market Profile).


  • Kokontala says:

    I agree a hundred percent that long-term consistent profitability will never be achieved without proper principles, beliefs and perspectives etched into our minds. I now understand the steps required to stop struggling both mentally and financially as a trader. This is helpful and I hope my trading will be a bit more successful moving forward. It’s been a tough journey so far being confused and jumping from strategy to strategy, not exactly sure what to do. Thank you

  • Jean says:

    I have recently started trading, I have suffered a couple of losses and I know that it’s all part of the process. I love the part of your article where you say “mindset dictates success and failure”. After a couple of losses, one tends to feel a little de-motivated. I agree that a strong mental framework will ensure success, thank you again for your insight.

  • Cynthia says:

    It’s difficult to separate emotions from trading decisions.  The fear of losses and failure and the desire for financial stability make it almost impossible to approach the venture from a purely methodical standpoint.  Using the Trading Composure School to tap into and change my mindset in regard to trading is certainly something I intend to look into shortly.

    • Matt Thomas says:

      Hi Cynthia – you’re exactly right. It’s difficult to separate emotions from trading decisions (especially as a new, naive trader), yet the majority of traders jump into the market without focusing on their mindset whatsoever. It’s madness. It just leads to pain – both emotionally and financially. They allow their insecurities, anxieties, biases, impulses, and defense mechanisms determine their behavior on a trade-by-trade basis. But this erratic, inconsistent, and irrational approach will only lead to negative results. Success in the market requires traders to develop certain mental perspectives and skills. They’re not just nice to have – they’re required for durable trading success. A paradigm shift has to be made in order to turn trading from an afflictive experience into an enjoyable one. Thankfully there are courses provided by experienced and consistent traders like Yvan Byeajee at Trading Composure to help us along in the process and correct our mental approach.

  • Marisa says:

    As a trader, I relate to many things you talk about here, and I particularly liked where you mention, and I quote “We don’t have trading problems, we have personal problems that reflect in our trading”.  

    The trading losses I make are usually when I am not in the right mindset.  After years of trading, I feel more disciplined and can emotionally handle losses much better. 

    The best I’ve learned is to walk away and do not trade immediately after a loss. I simply wait until I am tranquil and have a clear mind.  

    • Matt Thomas says:

      Thanks for sharing your trading experiences, Marisa! I think the concept of the mirror is extremely important for everybody to understand and I’m glad you highlighted it. The bottom line is that the majority of trading problems and errors lead back to mindset. If we lack focus and organization in our lives, then we’ll most likely lack focus and organization in our trading. A cluttered workspace, car and house equals a cluttered mind. An unhealthy body and mind equals unhealthy trading habits. In other words, it’s hard to excel in trading if everything else in our life is in disarray. I don’t want to go as far as to say “how we do one thing is how we do everything”, but the results we get in both life and trading are a direct result of how we think, feel, and the actions we take. Mindset is the driving force behind the results we get in every area of our lives.

  • Misael H says:

    The art of trading has always been something of interest to me. I think it’s definitely one of those things that requires a lot of discipline and patience. Traits like that are very vital for money making, in my opinion.

  • Jas says:

    These days and for many months prior, I’ve been looking for a good answer to this question. Some say ask and you shall receive…I think traders should know as much as possible about these techniques in order to be successful traders. I agree with you that we can’t control the wind, but we need to adapt to it and point in a direction that suits us.

    I listen to mindfulness meditation and I believe it’s effective.

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