Thursday, February 1, 2018

Patterns of GREAT Traders | Trading Psychology

In today’s psychology lesson, I’m going to keep building on the strategy of using our trading journal, and more specifically, today I want to talk about how to use your trading journal to become the absolute best trader you can be.

Today I’m going to paint a vivid picture for you, so you can understand the mindset of the best traders in the world, so you can model your behavior in similar ways.

But before I go into today’s lesson, I need to remind you that this psychology lesson is the most recent in a series of videos that I publish every week on this YouTube Channel, and these videos build on the topics we’ve already discussed, so if this is the first video you’re watching, you might want to go back and start from the beginning to get the most value out of these lessons. 

Here’s the link to watch from the beginning

I also want to remind you to subscribe to this YouTube Channel and click the “bell” icon so you get notified every time I post something new…

And if you really want to stay in-tune with what’s going on here at SchoolOfTrade, head on over to our homepage and join the mailing list so you never miss a new video.

Ok, now that we got that out of the way… let’s get into today’s lesson.

What makes a great trader?

Not a good trader, not a profitable trader, but a GREAT trader?

To answer this question, let me first start by telling you what a good trader looks like.

A Good trader trades to earn money, but they focus more on trading NOT to lose, and by doing that they earn enough to survive, but never earn the freedom that GREAT traders earn.

They trade to pay the bills, rather than to be the best.

Good traders have a strategy that works, they know it well, and they execute with discipline.

When things go wrong, they work hard to fix them, and they get back on track.

They work a few hours each day, cash their paycheck, and they go about their lives.

Good traders are similar to most people, they stay in their lane, they don’t rock the boat, and they succeed in life because of it.

Great traders, however, they’re cut from a different cloth.

Great traders are competitive with themselves, they’re competitive with other traders, and competitive with the markets they trade.

Great traders have a strategy that works, but they’re always looking to make it better.

Great traders work hard when times get tough, but they work HARDER when times are good, which almost eliminates the down-times.

Great traders know their strengths and they seek to work to their strengths in everything they do.

Great traders trade to win, because they have an emotional connection to that success, and even more importantly, they’re emotionally connected to the possibility of failure.

It’s easy to see, being a great trader doesn’t have much to do with strategy, it’s all about personality.

Some people are born this way, others have to work at it, but either way, it’s that passion for being the best, it’s the mindset that anything else besides success is unacceptable, no matter what sacrifices you have to make along the way.

Good traders make money, they certainly do, but great traders do it for more than the money, they do it for the lifestyle, the freedom, they do it because that’s who they are, committed to being the best version of themselves.

So, how can we use our trading journal to put us on the same level as those great traders?

Better yet… how can we use our trading journal to MOTIVATE us to become great traders?

Well, let’s think about this…

Our journal shows us two things…

·        Patterns in our Trading
·        Patterns in our Decisions & Mindset

In my previous lesson, I talked about the importance of identifying those patterns, so you can do MORE of the productive patterns and LESS of the destructive patterns.

But these are just WORDS in our journal, they don’t have very much value until WE decide to give them value, and these words have value when we associate costs and benefits to them.

In other words, those words in your journal aren’t going to motivate you to become a GREAT trader until you visualize the benefits of the productive patterns, and more importantly, the costs of those destructive patterns.

For example, I was just talking with a client this week in the trade room, amazing guy, hard-working, dedicated, loves trading, wants to be successful, I enjoy working with him… but he keeps taking profit too quickly.

In other words, he struggles with letting his winners run.

So, I said to him… let’s think about the COSTS of this destructive pattern.

First, every time you cut your winners too early, you make your losses that much bigger by comparison.  

When you use small targets, you have to have to be right a LOT because one loss will take back 3 or 4 winning trades.

Second, and most importantly, when you cut your winners too early, you never get to really GROW as a trader. 

In other words, if you never let your trade really work for you, you never really see where you’re trading ideas can take you… it puts this ceiling on your development as a trader.  Makes sense, right?

So, in that example, if he was to use a trading journal to identify this destructive pattern (cutting winners too early), and then most importantly, really THINK about the COSTS of this pattern, not only to his trade account, but to his mindset…

Once he realizes that cutting his winners too early isn’t going to just cost him TONS of money over the course of his career, but more importantly, his mindset now is fear-based because one stop-out and he losses all those winning trades… talk about walking up to the plate with two strikes against you! 

Now…Once he puts EMOTION behind the pattern of cutting his winners too early, then he’s going to be motivated to make the needed changes, no matter how hard those changes are, because its NOT easy to change, especially because he’s making money each day!  How can argue with that?  You want me to change my trading habits when I’m making profit?  Are you crazy?  Yes! 

Another thing that separates the good from the greatest traders is that the great traders are always improving even when they are consistently profitable… and that take guts! 

Do you have those guts? 

Do you have the guts to look at your journal, see GREEN numbers at the end of each day and STILL wake up early on a Saturday morning to find ways you can get better next week?

That’s the definition of a GREAT trader.

They use their journal to discover patterns, they visualize the COSTS of the destructive patterns, and the BENEFITS of the productive patterns… because that’s the only way to motivate true change.

They attack the destructive patterns because they know they’re robbing them of success, and…

They attack the productive patterns because they know that those are their strengths, and they need to maximize those strengths, becoming GREAT at what they’re already good at.

If you learn one thing from this video, I want you to remember…

“The emotional response is the key to motivation, and motivation is the key to becoming GREAT, no matter what your goals are in this life.”

Saying that you want to be a great trader isn’t enough, because a few losing trades, a few sleepless nights, and you’re going to lose that mindset. 

Watching motivational videos on YouTube isn’t enough either, because once that video is over, its YOU that needs to put the work into your career, you that needs to get out of bed at the crack of dawn to make this happen, not the guru you see on the stage with the gold watch and expensive suit.

Too many people avoid TRUE change because they think that someone ELSE will do it for them, so they read another book, they watch another video, they attend another seminar, delay, delay, delay, until one day they look back and they think… “man… I never really accomplished what I really wanted”

And it was all because they didn’t use a journal in a methodical way, they didn’t recognize the patterns, they didn’t visualize the costs and benefits of those patterns, and they didn’t attack, relentlessly until they evolved into the GREAT trader that they truly could have become.

One more thing, something important I want to leave you with today…

I grew up as a kid who was always cutting corners, always taking shortcuts, always looking for the easiest way to get the job done.

An example, I was smart enough to do no work in school and get decent grades, and it got me through my youth, but it wasn’t until I was in my early thirties that I began to realize that this wasn’t the way I wanted to live the rest of my life.

I was tired of things not being done CORRECTLY.  I was sick of looking back at my work and seeing that it could have been done better.  I wanted more, I wanted to be different then the person I saw in the rear-view mirror, so I decided one day to make a change.

I decided to set a higher standard for myself.  I decided that doing it right was the only way to do it. Period.

Yes, it takes more effort, and yes, it’s not as easy, but it LASTS, and more importantly you can BUILD on it, and that’s something I want to inspire in you with this lesson today.

Set a higher standard for yourself, and don’t accept anything less.  You’re the ONLY person who can do this.  Money can’t do it, other people can’t do it, Tony Robbins can’t do it… only you.

Starting today, when you’re writing in your journal, add some attitude, add some swagger, add that higher standard.

Your journal should say…  “Im Joseph James, I don’t accept anything else besides the best, and I’m willing to invest the time and develop the skills and mindset to make it happen!”

Your journal isn’t just words on paper, it’s FUEL for your journey to reach whatever goals you want.

Do this for everything in your life.  Your day job (if you have one), your trading career, your health, your relationships.

Make the decision to set a higher standard for yourself, right now, and make sure when you read your journal, that you see an attitude that won’t accept anything… but GREAT.

Boy, what a powerful lesson on becoming a GREAT trader.  I hope it resonates as much with YOU as it did with me today.

Wrapping things up… I hope you found a ton of value in today’s trading psychology lesson…

Do me a favor…drop me a comment below this video with any additional topics you’d like to see me cover in my next psychology video…

…make sure to give me a thumbs-up if you found value, subscribe to the channel if you’re not already, and please don’t forget to share this video with a friend.

And don’t forget, you can find me every morning @ 8:00am EST working hard in my trade room with all of our members here at, I have a great free trial on the homepage of our website, I publish my Nightly Newsletter every evening on my blog before 8:00pm EST, and I’m excited to see you again soon on my next trading psychology lesson.

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