Mind Over Markets

In today’s episode, our discussion is going to be focused on expectations that new traders have about trading, and more specifically, how unrealistic expectations can be extremely toxic for your journey.  If you’re serious about becoming a trader, it’s wise to understand the nature of the beast now rather than learning it the hard way later. Unrealistic expectations are one of the major catalysts that lead to emotional trading and ultimately a lot of frustration with trading - in fact, the majority of mistakes you will make in your trading career will be a result of expectations that are misaligned with the reality of the markets. Since you are here with us today, our goal is to set the record straight and provide you with a dose of the realities of trading so that you can better manage your expectations in order to give yourself the best chance of finding sustained success!  So what are expectations and why can unrealistic expectations be dangerous?  An expectation is a strong belief that something will happen or be the case in the future Expectations also bring about emotional highs and lows; meaning that you feel good when your expectations are realized, but you will feel disappointed when your expectations don’t come to fruition When emotions creep into your trading, you become vulnerable to making emotional decisions, which is what can really harm your account Unrealistic expectations are the catalysts that lead to most of the mistakes you will make as a trader These expectations are often the result of buying into online marketing about trading and how it possible to master this craft and attain riches seemingly overnight with a $100 trading account.  This marketing leads people to have a mistaken perception of what successful trading really requires and starts you off on the wrong path for the journey you are about to embark on If you expect to be perfect in your trading or even to be consistently profitable within a short period of time, then you are most likely going to be let down The interesting thing to note here is that when your expectations are unrealistic, you will struggle with trading because at a subconscious level, your monkey brain will realize that reaching those expectations is likely to not happen and your mind will go into “fight or flight mode” at which point, your decisions will be made on autopilot without your control.  This is the real danger of unrealistic expectations! The fact that you will sabotage your own plans and rules when things don’t go the way you expect them to There are generally two types of “expectations” as it relates to trading :  Expectations you have about trading  Expectations you have when actually trading  Here are some examples of each type: Common unrealistic expectations about trading  Expecting to flip a $1k account into a million dollars within a year  Expecting to make money from the first week of trading  Expecting to be able to make money without any training and practice Expecting an easy ride without any work (trading is easy money)  Expecting to make more profits by spending more time in the markets Common unrealistic expectations when you are actually trading  Expecting to never lose a single trade  Expecting each trade to be a home run  Expecting to catch the tops and bottoms with every trade  Expecting to never take any heat on trades  Do You Have Unrealistic Expectations About Trading?  In this next section of the show, we are going to ask you some questions that we want you to be brutally honest with yourself in order to determine whether your existing expectations are realistic or not.  If the answer to any of these questions is yes, then your current expectations about trading are likely unrealistic and it’s time for a reality check: Are you taking too many trades or re-entering the market after taking a loss out of anger and frustration? Do you force random trades because you expect that more trades mean more profits?  Do you tend to hold on to losing trades despite the market moving against you?  Do you try to take on too much risk for your account size?  Are you constantly hopping from one strategy to the next when you run into a loss and/or streak of losses?  Do you constantly shift from demo trading to live trading and back to demo when things don’t go the way you expect them to?  Setting the Record Straight: The Reality of Trading (the fishing hook)   Reaching your trading goals will take much longer and require more effort than initially planned  You will constantly be challenged and must remain persistent in the face of these challenges in order to overcome them There are 4 general stages in the journey to profitability and the most important is the first one because most traders never make it out of this stage when their expectations are not managed accordingly In the first stage of your journey, you will be taking losses as you start to get skin in the game; You are still learning and refining your execution so you will make mistakes and the goal here is not to make money but to learn how to survive in the markets by establishing structure; getting comfortable with your strategy and risk management & develop good habits and discipline; do not rush this stage! In the second stage, as you start to develop confidence in your strategy, you refine your executions, make fewer mistakes and overall feel more confident in the markets, you get to the point where you are no longer losing money and in fact starting to make some money.  In the third stage of the journey, you are now at the point where you have recovered the drawdown and have reached the break-even point in your trading - meaning you are now covering costs and commissions without bleeding the account out  The fourth stage of the journey is where the trader finally starts to make profits and this is where the account growth can occur exponentially, however, most don’t ever make it this far due to unrealistic expectations Managing Expectations as a Trader  The most productive mindset for a new trader is to focus on the process of trading, rather than the profits that come with them If you do that successfully, you will have plenty of profits, but there are no shortcuts Our job is to trade with the odds and accept the probabilities that the odds may not play out on any particular occasion Redefine what a good day means! Have a goal going into each trading day and plan to achieve that goal.  It should not be related to making money (for example, If I make money today it's a good day), instead, it should be process-focused based on what you can control (A good day is a day that I followed my trading plan) Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast Check out George's Path to Profit book here 

In today’s episode, we are going to be discussing the concept of a financial thermostat and how your default setting may actually be holding you back from achieving the trading success that you know you deserve! It’s no secret that trading is linked with money; if you think about what initially drew you to this industry, most people would agree that it is the allure of making life-changing money.  After all, what do we spend most of our days fantasizing about? How life as a successful trader would look like! Luxury homes, large bank account balances, exotic sports cars, and really, the freedom of time to do whatever you want whenever you want.  Now, if you’ve been with us for any amount of time, you’ll be aware that it is the logical side of your brain that actually desires and wants these things, but it’s really the subconscious mind that actually runs the show! So if your relationship with money is not aligned with your financial goals as a trader, then you will find a way to self-sabotage yourself and your results.  Our goal today is to help you identify what your default financial thermostat setting is and how to adjust it so that you shake out the beliefs that don’t serve you and replace them with those that will!  Your Relationship With Money  Before we dive into what a financial thermostat is and how to adjust it, we believe that it is important to first identify your relationship with money.  Every single human being has a certain relationship with money and as traders, the type of relationship that we have with money will impact the trading decisions we make regardless of whether they are in our best interests or not. A lot of successful trading has to do with planning your next best trade and waiting for the market conditions to align so that you can execute according to your plan. The issue for most people is that they are unable to follow the plan successfully and this is where your relationship with money may provide some insights into your own trading behaviors and habits.  The unfortunate reality is that if you have an emotionally unstable relationship with money, then regardless of how hard you work, you are setting yourself up for failure as a trader.  Think about your own thoughts and beliefs that come up when you think about money. It might represent things like social status, security, safety, scarcity, opportunity, even resentment. Did you know that a majority, if not all, of these beliefs, were formed during your imprint years up until the time you were about 7-8 years old? These beliefs were created by the things we heard, by what we saw, and by specific incidents we experienced as a child.  Most of us don’t know why we make the choices we make about money and wealth because they are the result of programs we run in our minds automatically based on the beliefs we learned during those crucial imprint years! So for example, if you grew up hearing things like "Money doesn't grow on trees" or "Money is the root of all evil" or you saw your parents struggle to pay the bills on a monthly basis, then your default reaction to material things might be "I can't afford that". This leaves a negative imprint on your psychology because you associate money with feelings of scarcity, pain or even resentment. In an industry like trading, where you have to risk capital, regardless of whether you want to make money or not on a logical level, if you truly believe that money is scarce then this will override your logical thoughts and sabotage your ability to follow your plan.  Now that we have covered your relationship with money, we can move on to the concept of your financial thermostat. What is a Financial Thermostat?  Your financial thermostat is actually very similar to a regular thermostat!  The thermostat is set to keep your room temperature within a certain range - so the thermostat regulates the temperature automatically and will kick in to ensure it always remains in that pre-set range.  Think of your financial thermostat as the amount of money that you are comfortable with, the amount that you have set for yourself.   Let’s say the average American makes $36 k per year, which means that the monthly paycheque would come out to around $3000 - most Americans also live paycheck to paycheck so for example sake, the financial thermostat for an average American would be around $3k on the high end and say $250 on the low end.  When your bank account rises above your thermostat, let’s say you get a larger bonus than expected, for example, you find a way to blow the cash. When your bank account drops below your thermostat, you start to work harder, be more diligent and tighten up expenses to bring it back up. If you reflect on your own experiences with money, does this hold true?  This is why lottery winners usually end up right back where they started after several years - because they never worked on increasing their “default” settings on their financial thermostat.  The level of your financial thermostat determines the level of your wealth. This level may gradually expand over time but seldom, if ever, does it expand rapidly. The faster it expands, the more volatile you fluctuate between the upper and lower bounds of the range.  To bring it back to trading, if your money beliefs are such that you associate money with risk, scarcity, and danger, while you logically strive to make more money, can you see how this misalignment can create a conflict between what you think you want and what you actually believe you deserve?  How Does Your Financial Thermostat Manifest Itself in Your Trading?  There are a number of ways that your financial thermostat asserts itself in your trading and these include:  Position sizing - If you trade positions that make you emotionally uncomfortable, you effectively put yourself in a position where you are too scared to trade because you don’t want to lose money, so you scale back or don’t trade at all. On the flip side of the coin, if you trade too small, then you are not as engaged emotionally and this can lead to sloppy executions and straying away from your plan because the monetary rewards simply do not motivate you.  Self - Sabotage - you might get to a stage in your journey where you are starting to make money and have built up somewhat of a profit cushion. At this stage, you might be above your current financial thermostat range,  and as a result, you self-sabotage by telling yourself that you can take more drawdown now because you have a profit cushion, so you decide to increase the trading size, take on more risk per trade and aim for larger profit targets.  Practical Strategies to Adjust Your Financial Thermostat  The goal of adjusting your financial thermostat is to uncover all of the limiting beliefs living in your head that are hindering your prosperity and challenging them so that they no longer affect you!  The first step is awareness - whenever a situation involving money comes up, take a moment to observe these thoughts as a third party (literally see yourself outside of your body seeing observing these thoughts) and become aware of what you are thinking and/or feeling. When you think about the material things you desire, what kinds of feelings come up?  Do you feel like you deserve these things? By becoming aware of these thoughts, you allow yourself to identify where your financial thermostat is currently set.  The next step is to change how you speak to yourself once you become aware of the thoughts you are having! If you believe that you don't deserve something, then challenge that belief! Ask yourself why you believe that or a personal favorite, "Why are you arguing for your limitations?”.  Remember that limiting beliefs are deeply ingrained and while on the surface they seem like they might be against you; they are really there to protect you.  Your money thermometer might be set really low without your knowledge because your relationship with money might be that of disappointment or resentment, so your brain will try to protect you because it saw that money always brought you pain in the past. The next time you have a positive experience with money, reinforce it by using positive self-talk! The final step is visualization - Use a vision board to make compelling pictures of wealth and income, or of material goods that represent wealth. Take a few minutes every day in a quiet place to visualize your desires and how grateful you are for possessing them! Get very detailed here and don't be shy! If you want to make a million dollars trading, visualize seeing that balance in your brokerage statement. What would that feel like? What would you do with that money? Visualize all of these things in great detail until it feels real! You are now in the process of shaking out the values that don't serve you and replacing them with those that will!  Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast Check out George's Path to Profit book here 

As another new year approaches, most people have an idea of what they want to accomplish but their goals might just seem so out of reach, so out there, that it’s almost too intimidating to start.  We often assume that if we want to achieve big things, we need to take big action - but the problem with this approach is that the bigger the action you need to take, and the more drastic the difference is from your current way of doing things, the more likely it is that you will have trouble sustaining these actions in order to accomplish your goal.  But what if you focused on getting just 1% better each day and seeing how your results compound over the next year? That's exactly what we are going to be discussing in today's episode!  If you were to break down your big goals into tiny, sustainable daily actions that you can practice consistently then you might just be surprised with what you can achieve!  In the beginning, these small decisions might seem insignificant, but over time, the small improvements (or declines) begin to compound and the difference between the two camps becomes quite noticeable.  If you get only 1% better each day for just one year, then compounded, you will end up around 37 times better by the end of the year - on the opposite side of the coin - simply being 1% worse each day, compounded over a year, means you are 97% worse off. So imagine for a moment achieving a 3700% return on investment and in this case, that investment is YOU! Why Small Habits Make a Big Difference  The concept of improving only 1% a day seems negligible - but over the long run it can be very noticeable  The societal norm of instant-gratification these days means that small changes are often seen as insignificant  Coupled with the slow pace of seeing noticeable results leads many to let bad habits slide.  Similar to how every chemical reaction has activation energy, we can think of every habit or behavior as having activation energy as well No matter what habit you are trying to build there is a certain amount of effort required to start the habit In chemistry, the more difficult it is for a chemical reaction to occur, the bigger the activation energy For habits, it’s the same story; the more difficult or complex a behavior, the higher the activation energy required to start it For example, sticking to the habit of doing 1 pushup per day requires very little energy to get started, meanwhile, doing 100 pushups per day is a habit with much higher activation energy. It's going to take more motivation, energy, and grit to start complex habits day after day Regardless of whether you are successful or not at this moment in time, what truly matters is whether your habits are putting you on the road to success or veering you off the path Your current trajectory (daily habits) is more important than your current results as habits are the compound interest of self-improvement Your biggest breakthrough moments will occur as a result of many small actions that compounded over time will build up to make a huge change It is so hard to build the habits that last because we often expect progress to occur in a linear fashion and when things don’t occur as quickly as we’d like, we dismiss the habits as ineffective and throw them out the window  This line of thinking makes it easy to pass on the good habits for the comfort of the bad habits that you are already accustomed to. If you find yourself struggling to build habits or break bad ones, just understand that progress takes time and that your efforts are not wasted The period between taking small consistent actions and achieving noticeable improvements is coined by James Clear as the “Plateau of Latent Potential”  Once you break through this phase, people on the outside will see it as an “overnight success” but in reality, it’s the result of all the small actions that you took which makes today’s results possible How to Get 1% Better Each Day as a Trader  Small, Smart Choices + Consistency + Time = Radical Difference The first step is to have clarity on what your goals are and who you want to become and the lifestyle that you want to live  Create a larger vision of what you want to achieve - you can reference our goal setting episode #7 - Goals and Actionable Outcomes for the New Year to help you set NLP-based goals Reverse engineer your stretch goals into actionable small steps that you can execute daily  For example; If you want to develop your trading mindset, you can start by listening to one episode of this podcast per week and as you apply the strategies, you can increase your efforts to two episodes per week and so on and so forth and watch how much your trading mindset improves over the course of the year.  Over time these small smart choices made consistently will provide compounded results Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast Check out the book Atomic Habits by James Clear on Amazon

In today’s episode, we are going to be discussing a topic that people don’t really talk about much in this industry and that is the fear of success and how it can be detrimental to your end goals as a trader.  Take a moment to reflect on this question:  “Do you fear your own success?”  You might be resistant to this idea at first because after all, why would you fear getting everything that you want? Sounds crazy, right?  But you might be surprised to find out that the fear of success is actually responsible for a lot of the self-sabotage that occurs in our pursuit of what we think we want.  Fear of success is easily confused with fear of failure as both can keep you from reaching your full potential; however, the main difference between the two is that the fear of failure has more to with beating yourself up for underperforming, whereas fear of success is more built in the anticipation of how others will react to your accomplishments.  It’s one of the hardest things to pin down so our goal today is to identify why it happens, how you can overcome it as a trader and how you can become more self-aware so that you can go about dealing with this effectively.  Why would you be fearful of achieving the things that you are working so hard for?  Definition: Fear of success usually doesn’t mean a literal fear of success. People fear the results and consequences of making lots of money, for example, not the money itself. On a conscious level, you don’t actually fear achieving success but at the subconscious level, you might be holding on to a script or limiting belief that is at play which you have to face and challenge.  The subconscious mind works to prevent that which it fears: If you have an unresolved and unreasonable fear of success Your subconscious mind will continue making what your logical mind believes to be mistaken, but the subconscious always overpowers logic and wins. 0.004% vs 96.996%. If you haven’t programmed your mind to succeed, then you have programmed it to fail, and it’s carrying out your orders without your conscious awareness!  (Train tracks example). So why do we fear success? Fear of success is something usually learned in the early years of our lives. It is linked to the beliefs and values that we pick up from parents and others and store at a subconscious level Our parents and friends coach us to avoid looking like losers, to do our best and to always be a winner.  These appear as stories that we tell ourselves at a logical level but when you peel back the curtains there is a deeper underlying belief at play  It is often linked to a low level of self-worth The fear of success can show up in your logical thoughts in the form of the following thoughts: Success will ruin your relationships with friends and family  People will think you are always showing off or bragging Success might not be all it's cracked up to be  You fear the added responsibility that success entails  You fear the changes that success will bring into your life What if I become somebody that I don’t like  When you take a deeper look, these thoughts can be linked to values and beliefs that you picked up in your early childhood years:  “Successful people are bad, evil, etc” “Successful and rich people are lucky, inherited” “You have to work hard to earn a mere living” “It’s lonely at the top” “I am not worthy of success” These kinds of beliefs can really hurt you in the pursuit of your goals because despite your best intentions on a conscious level, at the subconscious level, you do not really want to become that bad or evil person or become socially isolated, so in order to maintain your current status quo, you will self-sabotage your results. Now the reason that you self-sabotage is because your brain is a fan of certainty and changes represent the “unknown” and potential danger to you.  For example, if you believe that achieving the success that you want will bring about negative changes in your life then you will find a way to self-sabotage and become the only obstacle in the way of what you want and deserve. What Does Fear of Success Look Like?  While fear of success can manifest in many different ways, here are the common red flag signs to look out for:  You strive for perfectionism and when you fall short, it’s enough of a reason to not proceed forward. Have you been taught to always be a winner? Are you afraid of looking like a loser? Do you feel the need to win at all costs?  You set goals that don’t really scare you! If you tend to be the type of person that sets a low bar for your goals, you fear challenging yourself and the circumstances of accomplishing them  If you tend to procrastinate and stall just enough for good opportunities to pass  Just when you are on the verge of success you find reasons to quit Do you fear change and the unknown?  Fear of success is both painful and embarrassing because it can cause mixed emotions such as guilt, anxiety, and pressure.   Fear of Success Examples in Trading: I really don’t want to make $5,000 USD a day, I’m fine with just $100.  I just want to REPLACE my income.  Why not increase it? I’ll leave my job to trade full time when I’ve made $250,000 and am out-earning my current income. I’ve got self-doubt that I won't be able to make it. This is too good to be true, what if I am unable to make this last What happens when you finally do get money or get consistent profitability? You have not found what the next step is and you consider throwing in the towel.  Any moment that you start to find success, you find a way to mess up, sabotage, and give it all back. Where do these insecurities come from? A lack of self-worth.  If you don't feel worthy of success then we fear it and when we fear it we find ways to mess it up (self-sabotage) How Can One Overcome a Fear of Success?  Have goals that are lifestyle based, not money goals Reflect on your own past experiences with success and figure out what happened as a result  Are there any stories and beliefs that you adopted in your early childhood years that you’ve held on to?  Make a list of all the ways that you are sabotaging yourself to put it into focus. Once you can identify these behaviors you can put together a plan to counteract them.  Grab a pen and paper and write down the answers to the following questions: Get as clear on your "why" as possible.  “What do I want to do with my life?" “Why do I want to be a trader?” "What kind of experiences do I want to have?" "What kind of people do I want to surround myself with?" Use visualization to imagine your ideal lifestyle. Achieving a goal you have set, what might happen as a result of achieving that accomplishment, and different ways that you can go about dealing with it.  Find a community of like-minded positive people with high self-esteem that you can absorb so that you reframe your mindset. We’ve got a great community but it doesn't have to be with us!  In addition to the above tips, you may also find that making lifestyle changes can help with managing the stress and anxiety brought about by the fear of success. Some of the steps you can take include eating well, taking time to get active each day, making sure you get enough rest, and finally leveraging a journal to help keep you in touch with your feelings and gauge your progress.  Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast

In today’s episode, we are going to be discussing a topic that we believe will help a lot of traders out and that is why every trade idea is not necessarily a trade that you should execute.  New traders as well as traders struggling to find consistent profitability tend to find themselves in a hamster wheel of frustration which occurs as a result of wanting to jump in on every single trade idea that they come across in an attempt to make as much money as possible as quickly as possible. The issue with this approach comes down to the simple fact that quality always trumps quantity and that the key to trading profitably is to only execute on the highest probability setups because that is where you have positive expectancy.  We always mention that making money is the easy part of this industry, the difficulty, and were a lot of traders struggle, is in keeping those profits as you continue trading!  The real difference between professional traders and unprofitable traders is that the professionals will pass on a potential trade idea if the market doesn’t give them exactly what they want to see, whereas the losing trader will take every single trade idea regardless of the quality of the setup.  Our goal today is to provide you with some actionable tips that you can use in order to find the right balance between identifying trade ideas and executing on only the best ones!  Before we get into trade ideas, let’s pull back the curtain on thoughts in everyday life and how those translate into trading:  It is estimated that humans have on average 6,200 thoughts a day A lot of these thoughts are ideas (hey I should clean my car, I’ll work out today, etc) You have 6.5 thoughts a minute - but how many of these thoughts turn to action? Very few - most of them enter our brain and exit without any meaningful action taken Trading ideas are the same It is a thought about the market - but it’s not a direct call to action, not every thought or idea will turn into a trade We look at trade ideas as opportunities…. but not all opportunities are the same, and not all deserve your capital and mental energy So what is the call to action for a trading “idea”? You have to filter out opportunities to find only the best ones One way to filter out these ideas is to use qualifiers You can’t expect to have the perfect qualifiers on your first trade ever, it takes screen time and experience to refine them The problem is these qualifiers change on market conditions A good strategy to apply is to talk aloud when qualifying a potential trade idea.  By doing so, we become the listener as well as the speaker. It gives our ideas greater objectivity - we become more aware of those ideas, it adds a layer of mindfulness to what we’re doing.  Let’s say I have an impulse to get long or short an asset because of the way it’s moving and I don’t want it to move against me.  If I say out loud what I’m thinking and what I’m about to do, immediately I can recognize if it sounds ridiculous: “This is not how I do my best money management, I’m being completely reactive.”  We get a layer of self-observation when we talk out loud that can be really useful. It makes us in a certain sense accountable.   The process from trade idea to execution can be broken down into two categories:  Trade Idea Formation - Morning mindset and wellness routine Pre-market preparation - news, market drivers, and catalysts Draw your levels of support and resistance Wait for the market to enter your level - this creates a trade idea, opportunity Qualify the trade using your engines (qualifiers, filters) Trade Execution - Use order flow to pick a good place to put in your limit order Once in a trade, manage risk until you’re at breakeven Then manage the winning side of the trade to run the profits Repeat Tips to help you transition from idea to execution Split the process into two jobs.  Job one is to be the analyst, do all your thinking and modeling in this time period.  These are steps 1 to 5 above.  Job two is to be the trader that executes the idea, stop thinking and worrying, all that should have been done by the analyst. Speak your ideas out loud to hear your thoughts and become more mindful of your intentions. The key idea here is that when you talk an idea out loud - whether to yourself or a fellow trader - you force yourself to put the idea into clear words and make it understandable. This forces you to not only speak the idea but to hear it as you are speaking it. This can give you a fresh perspective of what you're thinking and where your psychology is at! By observing your thoughts you become more mindful of your intentions. In this process, you might hear yourself talk out loud and realize the trade idea is not well-formed, other times you might be surprised at the conviction you have in the idea.  It's amazing how bad our worst ideas sound when we actually put them into words! Journal your trade ideas, not just your trades.  Write down your thought process, record what you were looking at, and how it ended up working out.  In the beginning, you can learn a lot about trading by journaling your process, this is “free learning” with zero risks. Remember that not every idea is a good trade.  The problem with new traders is they assume it is their job to be in a trade, but in reality, it is our job to be in the good trades. There is no perfect trade.  Many traders focus on finding a trade that is a risk-free, guaranteed winner. The problem is by the time everything looks perfect, it will be too late to enter, you missed the move.  It’s a business of risk management, not risk elimination. There SHOULD be risk in every trade, and you should feel like it’s “still a little risky”. The only thing that is 100% certain is the past, but it won’t make you any money.  The only time you will EVER KNOW how a trade will work out, is once it’s done.  Focus more on reading real-time order flow and less on trying to predict the future. Practice the process until you create a flow.  Go to replay mode, and work on repeating the trading process steps until the transition between idea and execution feel seamless and fluid.  Repetition is key until it becomes a habit, it will eventually become second nature.  If you suddenly feel fear when you are about to trade, this means you haven’t practiced enough, it’s a confidence issue due to feeling incompetent. Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast

In today's episode, we've got a special treat for you in the form of an interview with our very own oil desk manager, trader, and coach Stephen Box! Stephen joined TRADEPRO Academy back in 2017 as a veteran crude oil trader looking for a community of other professional futures traders to trade with. During one trading session shortly after joining, he volunteered to jump on the mic to share some of his analysis with the entire community of traders and the rest, as they say, is history! Stephen has since become the oil moderator in our trading room and for good reason! He's one of, if not, the best oil trader that we know! Stephen is an absolute gem and in today's chat, you'll get some great insight from his 30+ years of trading experience including how to bounce back mentally from a big trading loss, why pressurized trading is a recipe for disaster, the concepts of gambling in the markets, what it really is and the difference between gambling and trading. Here is a summary of what we discussed:  Stephens introduction to trading by way of physical silver coins 03:55 First realizing that successful trading is not just pure luck 07:01 Overcoming the values learned from parents that grew up through the Great Depression 13:10 Lessons learned from being long into 3 consecutive limit down days  20:55 Why you shouldn't put yourself in a position where you lose control 28:25 The psychology of specializing in trading a single market 36:40 Constantly adapting the trading process over the decades 42:00 The most dangerous thing that new traders don't know 46:56 The differences between degenerate gambling and skilled gambling 51:25 Building the discipline of self-awareness and walking away when emotions start to creep in 59:10 Pressurized trading; why money always follows the trading process and not the other way around 65:15 The psychology behind taking a loss on your first trade of the day 70:00  Why not every single trade idea in the session should be an actual trade 75:15 The most common myth in trading is that it's easy money 82:00 Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast

In today’s episode, we are going to be discussing how to break your bad trading habits so that you can finally achieve the results that you deserve!  Traders are constantly telling us that they are aware of the habits that are weighing them down but for one reason or another, they just can't seem to stop themselves from repeating them again and again.  These patterns occur at a subconscious level without our being able to control them and this can become frustrating very quickly and lead to trading on tilt which is when things can really start to spiral out of control.  Oftentimes, these bad habits are developed early on in the trading journey (especially if you stay in demo for too long) and will stick with you until you either face them head-on and change them or get frustrated enough with trading to decide that it's not for you and you exit the industry.  Our goal today is to help you identify some of the habits that are causing you frustration in your trading and to provide you with practical solutions to disrupt these patterns so that you can replace them with habits that will serve you!  What is a habit? What causes bad habits?  an acquired mode of behavior that has become nearly or completely involuntary In layman's terms; a habit is an action taken in the past that worked to solve a problem which the brain thinks is now acceptable to use for all relevant situations in the future Our brain is always seeking efficiency and will use habits that we have developed in order to deal with situations that it commonly face The purpose of every habit is to solve the problems that you face  The primary cause of bad habits is a way of dealing with stress and boredom  Bad habits address certain needs in your life  The Feedback Loop  There are four stages of a habit which are commonly referred to as a feedback loop, which is a continuous cycle that runs every moment you are alive The four stages of the feedback loop  include (1) Cue (2) Craving (3) Response (4) Reward The cue triggers the brain to initiate a behavior; it is about noticing the reward  The cravings are the motivational force of the habit - without it, you have no reason to act - you do not crave the habit but rather you crave the change in state that it provides (aka the reward) The response is the actual habit that you perform; it is about obtaining the reward  The reward closes the feedback loop and completes the habit cycle As it relates to trading, a good example of this would be someone that has the habit of adding to positions when they go against them  If this works ONCE, then your brain will remember that this action solved your problem before and it will use this habit again when faced with similar circumstances   Cue - A trade that goes into the red  Craving - You do not want to lose money on the position Response - You add to your position (martingale) in an attempt to get back to green  Reward - If the market returns and puts you back into the green Common Bad Habits in Trading:  Taking boredom trades because of lack of patience  Chasing trades due to FOMO  Revenge Trading  Moving stops and taking big losses  Cutting winners short  Risking too much on any given trade  Giving back profits throughout the trading session  How to Break a Bad Habit Each of the four stages mentioned earlier can be considered to be like a domino that influences human behavior. When one domino falls, it triggers a series of decisions that will either hurt or help you; this all happens within a fraction of a second  The first step to breaking a bad habit is awareness! Ask yourself: When does the bad habit actually happen? What triggers the behavior and causes it to start?  If you eliminate the cue, the feedback loop cannot start  If you reduce the craving, then you won’t experience the motivation to act  If you make the response (behavior) difficult, then you will not be able to do it  And finally, if the rewards do not satisfy your desire, then you won’t be motivated to do it again in the future Visualize your negative trading pattern as an enemy that is the ONE thing that stands in the way of your trading success:  visualize all the negative consequences it has caused you, all the emotional pain;  If you visualize something as your enemy, will you buy into it? NO  Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast

In today’s episode, we are going to be discussing how to use uncertainty as an opportunity to get outside of your comfort zone and grab your life and trading by the horns. As a species, humans hate uncertainty! In fact, all you have to do is look back to our prehistoric ancestors as proof!  Think about a caveman leaving the safety of the cave (which is the “certain”) and going out to forage for food. If the caveman came across a large and fierce animal that they’ve never seen before, the immediate reaction would be to turn and go the other way because they were uncertain if this creature would attack them and if their lives were potentially at risk.  The same holds true when you are trading because your subconscious brain cannot distinguish between the perceived danger to you caused by life or death situations or the fear of losing a trade or even the fear of being wrong.  Uncertainty makes us worry, it provides stress and anxiety simply because of all of the unknown possibilities of the things that can go wrong - which generally results in people viewing uncertainty as a bad thing. But where does that get you?  Stuck in the fear of the unknown! Uncertainty is can be an opportunity or an obstacle and our goal today is to help you see it as an opportunity! Pulling Back the Curtain on Uncertainty  Uncertainty is defined as: The state of being uncertain Something that is uncertain or causes one to feel uncertain There are some things that are inherently uncertain and then other things that make us feel uncertain. Being able to separate and know the difference between the two is going to be helpful. Facts are verifiable and observable, whereas states are interpretations of facts. There are many different ways to interpret facts and we cannot prevent ourselves from interpreting everything that happens around us. However, we can become aware of our interpretations. Two people can see the exact same event and interpret it as uncertain OR certain. Then, we can begin to have a choice in how we interpret. This can have a lot to do with whether we live in a state of certainty, uncertainty, or somewhere in between. The problem is the brain processes facts and beliefs through the same network, making it difficult to distinguish between the two.  This is why we all can stare a fact in the face and still deny it. The truth is malleable to the brain If you have a bias towards negativity, your brain will tend to interpret facts according to the worst-case scenario. Your interpretation of uncertainty creates thoughts, which then create reality. If you choose to interpret uncertainty and respond with fear, you activate fight or flight and it shuts off your prefrontal cortex, all rational thought ceases. The problem is many facts are not always uncertain, but we make them so and panic about the worst-case scenario, which is just one of many multiple options. The Role of Uncertainty in Trading  As traders, anything that occurs outside of our control can cost us money and weigh on our psychology Regardless of trading experience, anything can and will happen in the markets  Uncertainty usually creeps up for traders in the form of hesitating to take legitimate trading setups when they occur Traders that gravitate towards trading signals and external social mediums like Twitter and FinTwits are looking to outsource their uncertainty Uncertainty causes an internal conflict between the subconscious brain (which senses danger and triggers your fear response) while the logical brain is saying “ I want to be a trader” - this is why you hesitate to take your trading setups Strategies to Help Traders Deal with Uncertainty Be very clear on your trading setup - make it as binary as possible Don’t overcomplicate your strategy Reframe the way you look at trading by affirming that your job as a trader is to follow the trading plan and not focus on your P/L Understand that you will never totally understand what is going to happen next and that you don't actually need to!  Build positive attitudes towards different market conditions that might arise and the different challenges that trading them brings Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast Quotes from Rande Howell over at Traders State of Mind

!n today’s episode we are going to be discussing how to handle trading losses like a winner because at the end of the day, it’s not about how much money you make but how much money you can keep, and if you can’t take a loss then sooner or later you will take the mother of all losses.  Why Traders Have Such a Hard Time Taking Losses As a society, we are conditioned to aim for a high percentage success rate A lot of us judge our self-worth on how often we are right which makes it difficult to accept being wrong and taking a loss  Fear is a stronger emotion than greed; when faced with the potential of taking a loss, we will usually gamble and lose much more instead of accepting the loss for what it is  Trading losses are guaranteed, but newer traders are often surprised when they happen Few traders focus on risk before reward so when they place a trade they focus on potential profits and are not expecting to take a stop; placing a trade is not accepting risk, placing a trade is taking the risk Learning to Take a Loss  Your beliefs and attitudes about what a loss means will have the biggest impact on you  If you take a loss personally and believe it affects your self-worth, then you will naturally have a difficult time taking a loss  A perfectionist trader will often see a loss as a failure and setback which makes taking any kind of loss a real challenge emotionally  Taking losses is not something that we enjoy but we have to accept the fact that losses are part of trading  Once you can accept this fact then you will be able to release the fear around it  Practical Strategies to Handle Losses Like a Winner  Build and refine a trading plan & strategy Before a trader can accept losses, they must be able to believe that they can produce profits, otherwise, each loss will seem like a roller coaster of emotions between life and death The only way to believe that a trading plan can produce profits is to test it in the markets and to build a track record; when there is a track record of success then the trader will understand that result of any individual trade means very little Without a track record, trading losses take on a much bigger meaning  Reframe your beliefs about losses  Losses are part in parcel of trading; the first step to handling them like a winner is to accept that challenges and setbacks are part of achieving anything worthwhile  Be grateful for the loss  Keep the bigger picture in mind  Remember that the result of any individual trade you take is irrelevant to the big picture  If you take 1000 trades over the course of a year, how important is a single loss in the overall context of things? Not very important!  If you detach yourself from the result and see a loss as a simple data point - something to learn from - then you will have an easier time accepting a loss for what it is  Evaluate your losses like a professional risk manager Create a persona for when you are reviewing your trades at the end of the day when you will be grading your execution of the plan  Imagine being a risk manager that is standing over your shoulder as you replay and evaluate your losses This can remove the “emotional” connection to the event so that you can focus on evaluating and identifying the key areas of improvement going forward Develop a routine after you take a loss  Take a moment to journal the trade immediately and reflect on how well or poorly you followed your process  Take a moment to give gratitude to the markets for the learning opportunity  You can give yourself a timer to stay out for a certain amount of time Take a deep breath, identify your next best trade, and fight back! Keep on Learning  Ask yourself; What have I learned from that experience? How will I use it to make me a better trader?  See the implementation of the learning from the loss as an investment in your future trading career  Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast

If you know anything about us, you’ll know that we enjoy studying disciplines outside of trading to see if there any transferrable skills that we can use to help build our mental edge as traders, and poker just so happens to be one of those cases! In today’s episode, Mark discusses some of the similarities between poker and trading and also breaks down some key lessons that professional poker players can teach us about successful trading. For those not familiar with the game of Texas Hold Em’ poker, players win by betting against other players until one person is left with the entire pot. The betting is based on the perceived value of the hand that they hold relative to what they believe the other opponents at the table have. There are several betting rounds between the flop, the turn, and the river and success take discipline, patience, and diligence! Interestingly enough some of the best candidates for Wall Street trading jobs back in the day happened to be professional card players because these individuals understood that if you managed risk accordingly and executed your edge with consistency, that you were not gambling, in fact, you were simply playing the ODDS! What are the synergies between trading and poker?  Risk  Poker players have a pot or stack When you have what you perceive to be a decent hand in poker, you will bet some of the pot Have to risk when you believe that you have a chance of success The guy that is betting loosely and playing each hand will get lucky from time to time but at some point, someone is going to have a much better hand and will clear him out. Traders have an account and will bet a certain portion of the account size when a setup forms as part of their trading plan If you are ill-disciplined and betting on whatever looks good, then you might survive for a while with proper risk management, but eventually, you will get wiped out Managing risk and tolerating large risk when the time is right Knowing when to put in a certain bet and when to go all-in; in poker, there are some formulas as it relates to correct bet sizing as a percentage of a pot that is in there With trading, the general formula is to risk no more than 1-2 % of your risk capital Patience When playing poker, you are looking for your best hand; eventually, you get a hand that you want to play and you can start betting some of your pot on it The amateur or hobbyist plays for the thrill whereas the professional plays to win In trading, you are waiting for your highest quality setups and you do not want to get involved in the market for the sake of action but only when your edge is present A lot of the time is spent sitting on the hands and doing nothing Self-Control or Awareness Both poker players and traders have to be self-aware of their emotions so that they do not impact their decision-making processes If you are swaying from one polarity to another (angry on one side; excited on the other side) you become vulnerable to going on tilt 3 Things that Traders can learn from Professional Poker Players: Disciplined Money Management  In poker, a player’s main challenge is to stay in the game long enough to have the chance at winning some big pots. To do this, stringent management of their chips is paramount! Going all-in can bring a big winning but it can also get you a quick exit if things don’t go your way. Proper bet sizing is important to stay in the game in the face of a streak of losing hands. The concept of “tilt” in poker describes a state in which sheer frustration with the game takes over and distorts one’s betting If a player were to go on tilt after each losing hand, overjoyed with winning hands, and irritated with mucked hands, they would be relatively easy to read and would be making decisions based on emotions instead of probabilities The goal is to win the game and not the individual hand In trading, a trader’s main job is to manage risk and to stay in the game long enough by cutting losers short and letting winners play out. Trading on tilt arises out of the expectations of a certain outcome; if a trader is not emotionally prepared for the possibility of losing, they will be thrown off by losses. By needing and expecting to win we set ourselves up for the tilt state Let the probabilities play out and accept there will be winning and losing periods The Pareto principle holds true for both these fields; 80% of gains come from 20% of trades or hands Professional poker players know to bet strong and add to their bets when they hold a strong hand Requires a willingness to NOT play  The best poker players know when to hold 'em and when to fold em They don’t make bets when the odds aren’t on their side If a player has a poor hand, they can “muck” it which simply means fold and wait to bet on a better hand Good players know there are times to bet and not to bet; they will bet when the odds are in their favor and when they perceive weakness among other players at their table In trading, you can decide when to bet or not bet and you can also decide how much to bet if you plan on doing so. If a poker player played every single hand they were dealt, over time the odds would catch up with them and they would lose their entire stake You can't win at poker until you master the art and science of not playing Consider the prior market action as cards you are dealt and the current market behaviors representing the new cards being revealed. As a trader, you will want to stand aside if market conditions do not reflect good opportunities as defined in your trading plan. Knowing when to play and how aggressively to play are major elements of success in both professions If you only traded on the days when you have the “odds” in your favor, how would your experience change? How many days would you “muck”? Winning requires knowing who your up against  In poker, the way that you bet will vary greatly based on who you are playing against. You’ll bet differently playing against amateurs at the local casino versus playing the masters against tournament professionals. Successful poker players learn to spot patterns and tells of the players they are up against and will use these as considerations to make betting decisions. In poker, you are always betting against what other people are thinking and trying to get into your opponent's heads Example of Daniel Negreanu and how he gets into the heads of his opponents by talking to them about the hands that he believes they have Subtle tells around the table will tell the poker player it's OK to bluff with a relatively weak hand. Similarly, traders have to learn how to understand the psychology of those who they are trading against, and this is displayed visually on the charts. By understanding who you are up against and identifying when they are “trapped” in the markets, you are able to increase your probabilities of success.  By getting “into the head” of competitors you are able to make better-informed trading decisions. Those that are best in predicting price action are the best at predicting people; the market is effectively social; value is a collective social perception. Poker players and short-term traders need to have an edge and know what it is, but they also have to be able to use real-time judgment as to when to proceed with so-so odds. Resources Enjoying this podcast? We'd appreciate if you can drop us a rating and review on iTunes here  Connect with our community online: Trade Pro Academy Catch up with our earlier episodes: Mind Over Markets Podcast