4 Easy Steps To Master Trading Psychology: Learn Why Your Mindset Matters In Making Money
Article’s Mission: Please be advised, although all information is well researched, the information you will read is always objective. The mission of this article is to assist in understanding the importance of mastering Trading Psychology in order to earn money from home successfully. If you enjoy this article please remember to Put Your Hands Together, Comment, Share, and Follow!
Article’s Quote: “It’s about finding your values, and committing to them. It’s about finding your North Star. It’s about making choices. Some are easy. Some are hard. And some will make you question everything..” — Tom Cook
Article By Sirpatrick Iwu
OVERVIEW & PURPOSE
The Foreign Exchange Market (a.k.a Forex) can be an extremely lucrative remote career, as long as one is patient and respects the process. Just like anything worth having, character-building experiences take place along the way especially for traders that are not fully prepared with a well-organized plan. So, what exactly is trading and how does it work? Who can trade? What am I trading? Well, the purpose of this education is to answer questions like these in detail. But first, we must learn if you have the mindset to be a trader thus Trading Psychology.
OBJECTIVES
- Discover Your Why
- Begin to Master the Art of Trading Psychology
- Create a Trading Plan
- Most Importantly HAVE FUN….!!!!
MATERIALS NEEDED
- Trading Journal: https://amzn.to/3tHJPK1
- Calendar (on most cell phones)
- Sleep Mask: https://amzn.to/3apTA5w
- Blue Blocker Glasses: https://amzn.to/3bqgsTF
- Himalayan Pink Salt: https://amzn.to/2KoTL6k
- Celtic Sea Salt: https://amzn.to/3cYqDRD
- Sea Moss: https://amzn.to/3tLWfAH
- Memorize 4x Jet Life’s Pillars: Respect Equals Patience & Discipline Equals Profits
ACTIVITY MOVING FORWARD
Activate your DISCIPLINE NOW which will allow you to remove all the noise. Noise is anything that is not centered around your WHY. You do not make excuses, You will only produce results. You are not concerned with failure because failure is the sister to SUCCESS thus character building experiences. You will not get over excited for wins and you will not chastise yourself for losses. You will treat both equally and learn from both experiences!
EXERCISE I
List 10 reasons WHY you want to trade using the words “I AM” when starting each sentence. Make sure you are being extremely detailed. (example: I Am, a provider for my children to ensure I save $1,567.27 a month for them until they are 18 years of age.)
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2.
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10.
When all of your WHYS are accomplished in six sentences or less document who would benefit the most from those achievements? And Why?
EXERCISE II
Master the Art of Trading Psychology
Definitions:
- TRADING: the act or process of buying, selling, or exchanging commodities, either wholesale or retail, within a country or between countries. This can also be done by the act of buying, selling, or exchanging stocks, bonds, or currency.
- PSYCHOLOGY: the science of mind or of mental states and processes.
TRADING PSYCHOLOGY (TP): is the emotional component of an investor’s decision making process which may help explain why some decisions appear more rational than others. Trading Psychology addresses primarily the influence of both greed and fear. By mastering Trading Psychology one will appropriately address their greed and fear when entering the trading market. Thus, treating both wins and losses equally, which in return will be learning experiences.
Now that we understand what Trading Psychology (TP) means, we must now learn how to apply Trading Psychology. TP can easily be seen just as a term or definition without the foundation of mindset. In order to master TP, one must actively improve their mindset. This can be done in a plethora of ways, here are a few as followed:
- GET A MENTOR ASAP (This is a one & done situation (unless you outgrow your mentor)….Multiple mentors will only create confusion in regards to trading styles. Find a mentor that complements your trading style.)
- Developing a morning ritual
- Reading books monthly (readers are leaders, corny statement yet the truth lol)
- Listen to daily Audios
- Create a Vision Board
Get A Mentor ASAP:
Many successful Forex Traders will agree that throughout a trader’s career, finding a mentor is extremely important. Just like anything else in this world, how can you know where you’re going, if you have never been there? Many consider paying a mentor to train them which hands down is the greatest investment in their career. It’s really simple math, either you’re going to pay a mentor to teach you or the Forex Exchange Market (losing your money trading), one way or another you will learn! Like any other profession, you need to invest in a well-rounded education!
Resources have documented that over 97% of Forex Education Platforms do not address trading psychology FIRST which is the most important tool when becoming a professional forex trader. The tech company BE is one of the few companies that offer resources educating new traders about Trading Psychology. Yes you can and will be a profitable trader but if you don’t understand what makes YOU tick, you will have difficulty understanding why you’re unsuccessful in trading career. Thus, a mentor will guide you through this process allowing you to avoid some of the character building opportunities that he or she may have encountered. Find a mentor ASAP you’ll thank me later!
Make It A Ritual
Morning Ritual a.k.a Highest Priority 30 Day Challenge
- Every evening before you go to bed develop a task list to have completed the next day
- Put yourself on a sleeping schedule that you do seven days a week (no exceptions)
- Drink a gallon of water a day
- Read 30 minutes a day
- Meditate for 5 minutes a day (the more the better)
- Journal for 5 minutes a day
- Turn off all social media and forms of communication during this hour. (Stay disciplined this is your Superpower)
Task List Nightly:
Before you create these tasks ask yourself two questions: Will these tasks better my life? Will these tasks help me get to my goals faster? If the answer is yes, write them down. Create your task list before you go to bed every evening. According to Chris Winter of DA University, you do not want to create a task list in the morning due to a term called “Decision Fatigue.”. By waking up in the morning creating a task list you are taking the first step to Decision Fatigue. Make it easy on yourself, get it done the night before so that’s one less decision you have to make in the morning. In the morning you want to take action on activities that demand a massive amount of focus. These activities must be geared around positively impacting your life!
Plan out each hour of your day by 50 minute blocks with a 10 min break between each task (DO NOT CHECK SOCIAL MEDIA, TEXT MESSAGES, EMAILS, PHONES CALLS…..YOU ARE TAKING A MENTAL BREAK). If these platforms are that important to you, schedule specific times throughout the day where you would check platforms. Do not randomly go on them; “studies have shown that for every distraction you entertain, it takes approximately 23 minutes at a time to get back on track.” Value your time, it is the only currency EVERY PERSON has equal access to. For example, if your person that pays the bills online set up auto pay. If you feel the need to go into a grocery store, have your groceries delivered to your home (or select ONE day out of the week where you get everything you need). Your time is MONEY, so don’t let you or anyone else waste it.
Schedule Example Work From Home Week:
Highest Priority 4am — 5am: Personal Development with morning routine.
High Priority 6am — 10am: These are tasks that are going to assist you in reaching your goals.
Low Priority 11am — 4pm: These are tasks such as meetings, creating a shopping list, setting up your online payment; things that can wait until later.
Schedule Example Working 9am — 5pm Week:
Highest Priority: 6am — 7am
Low Priority: 7am — 6pm
High Priority: 8pm — 11pm
Schedule Example For Weekend:
Highest Priority: 6am — 7am
High Priority: 7am — 10am
Low Priority: 10am — 4pm
High Priority: 5pm — 8pm
“Take a 10 Minute Break Every 50 Minutes”
Task List
- Document task on a notepad with Highest Priority, High Priority, & Low Priority being divided in their own sections.
- Get a second notepad and for the random thoughts that come to mind as you’re drafting out what’s important for the day. Write those random thoughts onto the second notepad by doing so those random thoughts can transition into priorities for other days. This way you can get back to what is important.
Remember when I said “activate your DISCIPLINE NOW”? Well, get to it. Step away from this exercise, download Google calendar, and figure out what time in the morning will be your “highest priority“ hour. Don’t continue to move on with the exercise and figure out what those hours will be for you. Activate your DISCIPLINE NOW!
Key To A Sleeping Schedule
- Key component to a healthy lifestyle
- Must be the same time seven days a week.
- Your day sleep schedule well affects decisions, appetite, hormones, and most importantly in trading emotional control.
- Use blue blocker glasses two hours before you go to sleep (because all the blue light in your home, computer, cell phone, ect turns off your melatonin which impact your ability sleep)
- Sleep Mask (blocks out all light as you sleep)
Drink a Gallon of Water Daily:
- Your body loses water weight throughout the night therefore you have to replenish your body every day with water. Every morning have one large glass of water with a gentle shake of mineral salt (not enough to change the flavor of the water). The salt you will need is Himalayan Pink Salt & Celtic Sea Salt. You can find them anywhere online, I have also attached a link for you (research the health benefits of these two salts, it will blow your mind!). Please make sure that throughout the day you drink up to a gallon of water!
Mindset Eduation
Read 30 Minutes a Day:
- Read to improve your mental mindset. There will be books within this exercise that can assist you in the process of becoming a better trader! After college people on average read one book a year.
- Download Kindle so that you can get books for free
- 20 minutes of reading and highlighting
- Highlight what is important to you, and place that information on flash cards.
- Take five minutes to develop flashcards (stick to the schedule your Time is Money)
- Review your flashcards from the day before for five minutes, doing so will help you retain the information you found to be important. All this can be done on your cell phone, but you can also do this on the computer so that you can have a larger screen to read.
Book Suggestions:
- Behavior Modification Is Key by Sirpatrick Iwu
- Trading For a Living by Dr. Alexander Elder
- Trading In The Zone by Mark Douglas
- The Intelligent Investor, Rev. Ed
- The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Simon & Schuster
- Rich Dad’s CASHFLOW Quadrant: Rich Dad’s Guide to Financial Freedom by Plata Publishing
- The 10 Pillars of Wealth: Mind-Sets of the World’s Richest People by Tantor Audio
- The 10X Rule: The Only Difference Between Success and Failure by Grant Cardon
- Millionaire Booklet How to Get Super Rich by Grant Cardon
*Some of this book suggestions can be found on Youtube to listen to as well FOR FREE* Again These Are Only Suggestions!
Meditation For 5 Minutes:
- It’s really simple, just sit down for five minutes quietly alone, close your eyes, and think about nothing. Focus on breathing exercises! Distractions are going to be normal, thoughts of things that you need to do are going to come about. Show discipline and sit still quietly. The goal is just to calm your mind down. It is the most worked organ in your body, with the least downtime. Set an alarm on your phone that will let you know the meditation is over. Make sure it’s something that is soft that you like. You do not want this to come off as a punishment to your body but as an opportunity to re-heal the body.
Journal 5 Minutes A Day
- ONLY YOU CAN READ THIS!!!!
- The power of writing reinforces your thoughts. So get them out there, that way they have more power, which also can service as therapy.
- You want to write down things within your belief system that you want to come to pass so that you can see them and speak them into existence.
- Once you have completed your writing, every day write four things you are grateful for. It could be the same thing every day or something different!
Turn Off All Social Media:
- Instagram, LinkedIn, Snapchat, Emails, ect… turn the stuff off as long as possible. Oh “but I can multitask“ BS Focus On Yourself 100%. Some people reading this can’t even bring their phone into their 9–5 job because they have to remain focused on their jobs. So why not do the same for your self-development?! Your time is your currency, so spend it wisely.
Money Makers Are Future Planners
EXERCISE III
Create a Trading Plan
What is your trading style?
Swing Trader: is a trading style that focuses on trying to capture a portion of a larger move. Swing traders will focus on taking smaller, but more frequent gains, and cutting losses as quickly as possible. This style of trading is based on the assumption that market prices rarely move in a straight line, and that traders can find opportunities in the minor oscillations. Swing traders focus on the points where a market changes direction, entering and exiting their trades at these ‘swings’. Swing trading is about trading short-term legs of longer-term trends.
Scalper Trader: scalping is a trading style used by forex traders to buy or sell a currency pair and then hold it for a short period of time in an attempt to make a profit. A forex scalper looks to make a large number of trades, taking advantage of the small price movements which are common throughout the day. Forex scalpers will typically hold trades for seconds to minutes, and open and close multiple positions within a single day.
Position Trader: a position is the expression of a market commitment, or exposure, held by a trader. It is the financial term for a trade that is either currently able to incur a profit or a loss — known as an open position — or a trade that has recently been cancelled, known as a closed position. This is good for people with full-time jobs, allowing them to place a trade on a higher timeframe (as in an hour or 4 hour) and hold the trade until the trade is completed.
In order to be a successful Forex trader, planning ahead must become a ritual. Trading in the market without any preparation is a recipe for what we call “blow accounts” (meaning all of your money to the market). Every trader is one trade away from blowing their account. Let’s be clear, you WILL lose money in the market, but with a trading plan you have control over how much you lose. Any trader that will tells you they’re undefeated is a liar! The goal of every trader is to win more than they lose. With a trading plan you will know you target, what to look for, and most importantly achieve your WHYS.
Before doing this you must discover your trading style. The most successful traders write everything down. Why? Because as you are reaching your trading objectives, documentation will keep you focused and on track. Most importantly, trading plans activates your discipline, and helps improve; your emotional management, consistently, trading strategy, and will even assist in your risk management. Now once you create this plan you must use it. Many traders make the mistake of spending all their time creating a plan, then never implementing it. Compand Trading Plan Just Below
EXERCISE IV
Take your time, enjoy the process, and most importantly……!
Stay Creative,
Disclosure: The information you are reading here is always objective. Although Sirpatrick Iwu has his Masters in Higher Education, he is not a financial advisor, Real Estate Agent, Life Coach, Therapist, Lawyer, or Counselor. With this understanding, when you find value within this information please do your own research on the subject matter.
Resouces:
Sirpatrick Iwu’s personal forex trading experience
DA University
