Day Trading Mind - The Inner Game of Trading
The day trading mind is a concept worth exploring. You've heard of the books, such as "The Inner Game of Tennis". Although I have not read that book, I'm sure the concept is the same as the one I want to discuss here. And the basic idea is this: after you have gathered your trading team and practiced your strategies, you are still left with one foe to conquer - and that is yourself.
It is a fact that, as a day trader, you will come face to face with your own demons. If you have a tendency to be sloppy, then it will show in your trading. If you tend to enjoy the thrill of risk, then you will take on too much risk in your trading. No matter how knowledgeable you may be as a trader, if you cannot develop a day trading mind, then you will not succeed as a day trader.
Let me mention some day trading tendencies. You will have to examine yourself to see how they fit with you.
First up...the maverick. The maverick is the gun slinger who rides into town and just starts buying everything in sight. This is the full-throttle personality who figures they can plow their way through any adversity. What is needed by the maverick may be hard to come by, and that is a more methodical approach to trading. The day trading mind does not bull-doze its way to profits. It may work in other businesses, but it won't work here.
Next up...the gambler. The gambler believes that all of his equity must be used on every single trade. He/she leaves nothing in reserve. It's an all-or-nothing gambling mentality. The problem for the gambler is that he gets an adrenaline rush from trading - doesn't matter if he wins or losses. He just likes the rush of the ticker tape. The gambler rarely keeps records of wins and losses.
Third...the "poor me" personality. This day trading mind is afflicted by a poverty mentality. Since this trader has never been wealthy, he sells his trades too quickly because he just can't believe he's making money. Since he's never had money, he's not used to money. And he gets nervous and cuts himself short when he starts to make it.
Fourth...the ostrich. The ostrich is known for hiding her head in the sand and ignoring reality. The ostrich day trader will brag about her good trades to family members and friends. But she will ignore the bad trades or fail to report them as well. Since the ostrich doesn't keep records, she may not even be aware of how much she is losing. She just continues to trade and hope for the best.
Now, you may find yourself in more than one of these descriptions. You may need to make a new category for yourself, based on your personality. The key thing is this...learn to listen to your mind's chatter, and know what parts to ignore and which words are the wise words of caution. As day traders, we battle the extremes of fear and greed and we are never right 100% of the time. It is a difficult game for someone who seeks perfection. But, you can learn a lot about yourself, if you will just pay attention. And by paying attention, you can develop the day trading mind that is wise, disciplined, strong, and careful.
Since a key component of the day trading mind is having a sound strategy, you can click on this link to find more information about strategy.