After reading Tom Hougaard’s book “The best loser wins” so many great points came to mind regarding the “ideal trading mindset”
The ideal trading mindset does not care about winning and does not care about losing either. This can be extremely tough to fathom as everything in life outside of trading is so dependent on winning or losing. You may even be thinking to yourself well if a trader doesn’t care about winning then how does one even make money?
This question is very valid and I love the point Tom makes about this being that-”As traders this means we have to be FEARLESS BUT, NOT RECKLESS”
So what exactly does this mean?
Your trading mindset can be fearless but, it can also act in your best interest by becoming systemized and not reckless. an example of this is constantly being able to pull the trigger on your trading setups EVERY single time the setup aligns without any reservation or hesitation.
Tom goes on to say fear manifest itself in the market for each trader in many different forms. One being fear of not being in the market and missing a good move and another being that a trader is in profit and fears his profit being taken away by the market.
The goal we need to seek is to keep our emotional states in balance this way the market information is not being percieved as something painful or harmful to your brain. This makes it extremely easy to recognize the true nature of the market’s movements and react accordingly to the information that is given.
So the real question is how do we maintain an emotional balance so that we can become fearless in the markets?
A great way is getting a clear understanding of probabilities. If a coin is flipped an extended amount of times the results will be generally averaging around 50/50% for each side of the coin landing. The thing is there are an infinite amount of possibilities in the sequence of how each flip will result leading up into the 50/50% average result.
Tom goes on to compare this to trading where he say’s “If you win 15 trades in a row you may feel invincible. Then if you lose 15 trades in a row your mental state may suffer. There is randomness in one but, order in 100.” Meaning if we can accept the randomness of each trade and that losses can come and frequently we can trust and have faith that over a hundred trades with the right system and risk to reward over a span of 100 trades we can still be extremely profitable.