An component of every success story: Mental Taughness
In whatever way you define your success - satisfying money, a good job, a happy relationship, financial security, the freedom to do what you feel like doing, we will always mention inner strength and discipline as factors that contribute to "someone succeeding."
What is mental toughness in trading? We will define it by listing several situations and qualities that are then necessary. To begin with, I will just point out that at the root of each of them we have discipline and willpower.
You need willpower so that when emotions arise, you can tame them so that they don't interfere with your ability to make good trading decisions.
In addition to the above, you need motivation and its long-term, stronger relative - determination - to achieve success.
Another element that we include in "internal strength" is resistance to failure. This is the ability to return to action after unfavorable events.
Self-discipline is the ability to adapt over a long period of time to established (or imposed) rules, restrictions, plans of action.
"Long term" is the key meaning here. This is important, because it is from the perspective of long-term earnings that we must now look at self-discipline. A good trader needs it over the long term, for many years. In fact, this is good news, as I will explain in a moment.
This is because I am assuming that your level of self-discipline is not high, or even if it is to some extent - it is not fully conscious. And if it is - you will have enough time to raise and maintain your level of discipline.
This is possible because the source of self-discipline, which is willpower can be trained, just like human muscles.
The most important conclusion from modern research: discipline depends on willpower, willpower is an acquired trait, just like muscle strength, and it can be trained.
What are discipline AND self-discipline?
Self-discipline is the ability to adapt over a long period of time to set (or imposed) rules, restrictions, plans of action.
It is assumed that their source is willpower. Willpower is similar to muscle strength. Willpower is your trait or skill that you acquire in the course of your upbringing and life.
By doing systematic physical exercise, such as lifting weights, you will be able to, for example, double the weight you are able to lift after a certain period of time (assuming you haven't exercised before). The key here is a proper exercise program prepared on the basis of your knowledge of muscle structure and muscle strength building.
Think of self-discipline as an opportunity to apply, to use willpower whenever you need it. And whenever you want it.
Willpower is
In trading it is important because:
How do you accomplish all this?
By using educated willpower (mental toughness). It has the advantage that you can train it in one field and transfer it to another (trading). If you have willpower "in life" then you can easily transfer it to actions in the market. It's the same as with muscle strength: if you have it in the gym you also have it when you want to move furniture at home. This is one of the most important discoveries of the last few years that we rely on.
There are no different kinds of discipline, another in life and another in trading, so trained in one field it works in all.
What is mental toughness in trading? We will define it by listing several situations and qualities that are then necessary. To begin with, I will just point out that at the root of each of them we have discipline and willpower.
- When you are waiting to play you need patience.
- When you are entering the market you need courage.
- When you are in the market you need mental resilience to pressure.
- When you are waiting to play and "something happens" you need resistance to temptation.
- To compel yourself, if necessary, to act or not act you need a strong will. In the long run, a strong will gives you self-discipline.
- Willpower is also another line of defense against toxic emotions.
- You need willpower when you are possessed by feelings of greed, fear, or a desire to get back at yourself.
You need willpower so that when emotions arise, you can tame them so that they don't interfere with your ability to make good trading decisions.
In addition to the above, you need motivation and its long-term, stronger relative - determination - to achieve success.
Another element that we include in "internal strength" is resistance to failure. This is the ability to return to action after unfavorable events.
Self-discipline is the ability to adapt over a long period of time to established (or imposed) rules, restrictions, plans of action.
"Long term" is the key meaning here. This is important, because it is from the perspective of long-term earnings that we must now look at self-discipline. A good trader needs it over the long term, for many years. In fact, this is good news, as I will explain in a moment.
This is because I am assuming that your level of self-discipline is not high, or even if it is to some extent - it is not fully conscious. And if it is - you will have enough time to raise and maintain your level of discipline.
This is possible because the source of self-discipline, which is willpower can be trained, just like human muscles.
The most important conclusion from modern research: discipline depends on willpower, willpower is an acquired trait, just like muscle strength, and it can be trained.
What are discipline AND self-discipline?
Self-discipline is the ability to adapt over a long period of time to set (or imposed) rules, restrictions, plans of action.
It is assumed that their source is willpower. Willpower is similar to muscle strength. Willpower is your trait or skill that you acquire in the course of your upbringing and life.
By doing systematic physical exercise, such as lifting weights, you will be able to, for example, double the weight you are able to lift after a certain period of time (assuming you haven't exercised before). The key here is a proper exercise program prepared on the basis of your knowledge of muscle structure and muscle strength building.
Think of self-discipline as an opportunity to apply, to use willpower whenever you need it. And whenever you want it.
Willpower is
- The ability to overcome your internal resistances,
- the ability to resist impulses, thoughts and desires.
In trading it is important because:
- you must be able to accurately enter the market at the moment the system signals it - regardless of what is going on in your psyche,
- you must be able to resist the urge to enter the market when there is no signal from the system and the market has "just moved."
- you must be able to resist the impulse to increase the size of the order beyond what is reasonable (eliminate the danger of overtrading), you must be able to resist pressure and fear, both when you enter the market and when you are in it,
- you must be able to walk away from the market when you see that you are tired, broken internally, distracted, even when a signal is just coming in,
- you must be able to force yourself to analyze, to keep a trading journal - if you understand that it matters to your results.
How do you accomplish all this?
By using educated willpower (mental toughness). It has the advantage that you can train it in one field and transfer it to another (trading). If you have willpower "in life" then you can easily transfer it to actions in the market. It's the same as with muscle strength: if you have it in the gym you also have it when you want to move furniture at home. This is one of the most important discoveries of the last few years that we rely on.
There are no different kinds of discipline, another in life and another in trading, so trained in one field it works in all.
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