Neurolinguistic programming has proven that we can model success. Ideally, by modeling what successful people think and do, we can achieve similar success. For example, John Grinder invented NLP after discovering that successful people have different mental maps.
His work centered on the principles that define success in different fields. He argues that success is a state of mind. This last lesson is designed as a tool to help you adopt a winning trading mindset. Mindset generally describes our attitude towards life.
I do believe that our attitudes are made up of three elements;
Mental states describe how we feel. Rarely do we meet depressed people who are doing well in life. On the other hand, successful people are, in most cases, confident, exploratory, and curious.
We can therefore gain success in our lives by aiming to have the same mental states. In addition, we can use retrospection to attain success. By seeking to be confident, we prime ourselves for success.
Beliefs are predicated on values, and our decisions are based on our ideas. As a result, our thoughts skew our view of reality. By altering our belief systems, we can change the way we view life. For example, successful people believe that failure is a stepping stone to success. By adopting such a belief, we can change our view on failure.
Mental strategies are the processes that people use in making decisions. A good example is a trader who decides that before trading, he must follow his methodology. This is an example of someone who doesn’t decide on a whim. Thus, we can model the systematic process that people use in decision-making.
In this last section, I will share some lessons from great traders.
Knowing when not to bet is as valuable as knowing when to bet. The desire for constant action has resulted in many losses on wall street. Learn to stay out of the markets most of the time, and you will succeed as a trader.
Self-talk is what keeps humans sane. Negative self-talk is typical in that most of us experience it from time to time. It manifests in many forms. It can create significant stress.
In trading, traders often fail to these thought patterns after losing streaks in the market. Therefore, we must form a strategy to disrupt negative self-talk. Failure to disrupt these patterns can lead to under-confidence, which rarely works in the market.
Believe in your abilities despite challenges. We can trade better if we believe in our decision-making strategies. Our life experience will also be positive if we can disrupt the negative self-talk.
Mistakes are essential for our growth and development. Ray Dalio, a hedge fund titan, believes that making mistakes is a sign of struggling well. The danger arises when we don’t learn from our mistakes. We need to deal effectively with our mistakes. Learning to reflect on our mistakes is a must.
If we can develop a culture of learning from our errors in perception, we can attain high levels of success.
Trading is all about managing risks. Great traders are very keen on risk. We can elevate our game of trading by understanding the concept of risk and money management deeply.
By investing our time to understand position sizing, we can outsmart most traders. But, unfortunately, newbies often forget the aspect of position sizing instead of technical strategies that are not as valuable.