Pressure and stress are exhausting. They take a lot of energy just to manage, and to ignore enough to get on with your job. When you are a trader and feeling stressed or under pressure as your trades fail to profit, it becomes extremely hard to focus.
Decision making and clarity of thought are the victims, and the events can become even more overwhelming. What is worse is that it doesn’t take much to get to this state, especially when starting out as a trader.
Just one draw down of your account, can bring on the sense of panic that the trade is going wrong, or the feeling of failure and so the cycle begins. However, on the flip side, a few winning trades, a bit of profit and you become relaxed, energized and more focused.
Just being relaxed helps the process of identifying the next opportunity, making trading decisions easier, so the profits begin to slowly mount up. This is known as profit momentum.
So, when you are ahead, you gain a sense of empowerment and this in itself leads to greater success. When you have a loss or feel out of control as it all goes the other way, you feel defeated or stuck, and unable to move forward.
So the obvious solution is to work out how to get the mental edge that being ahead brings and use it to get out of the rut, and turn events around when all feels like it is going wrong. This requires mental momentum.
Mental momentum is the positive surge we get when we believe that we have done all we can. That we have made the best of the knowledge and opportunities we had. It is not all about winning or making a big profit, and therefore it is ideal to harness and use mental momentum in your trader toolbox as a skill for self-management.
After all it is all too easy to forget to reward ourselves for those things we get right when they are small or appear minor, especially if you just focus on profit as being reward.
But there are a whole host of elements that go into trading that are just as essential in the long run and should be rewarded to help gain that mental momentum. A clear example is learning strategies and trading mechanisms.
So how does this work?
Well consider goals that you have or items that you need in order to progress your career as a trader. We can put together a monthly target of profit desired or required, but you need to go behind that and look at the elements that gets you to that profit.
Break down tasks and put into them into different areas such as studying for so many hours per week, or learning a new trading technique or analytical tool.
Even with profit goals, the sensible thing is to not think in such high numbers and in terms of a certain percentage per month as that can be overwhelming, especially if the first few trades of the month fail to deliver.
Break it down into smaller elements and reward yourself when they are achieved. In this way you gain the mental momentum that helps lead to the profit momentum desired.
This is how you set yourself up which will determine if the energy you expend is going to be positively or negatively spent.
It takes just as much energy, if not more, to be on the negative side of things, so the sensible trader will look to learn how to gain positive mental momentum.
This is what will help turn you from being a novice trader into a winning trader.