Wednesday, February 7, 2018

The Market-Mindset Advantage | SOT Psychology

We’ve been talking about using our journal to identify patterns, those patterns are broken into two categories; things we do well, and things we need to improve.

In my last video, I talked about using those patterns to create goals, and then prioritized those goals into a strategy, so that as we achieve each goal, the next goal becomes easier.

And today I want to go further into detail, because we have the option of attacking our weaknesses, or building on our strengths.

Most people, when given the choice, will start working on their weakest points first, but in reality, the shortest path to success is actually building on our strengths.

In today’s psychology lesson, I’m going to introduce something I call the “Market-Mindset Advantage”, and I’m going to show you how to use your journal in two distinct ways to gain that edge… not only over the markets, but most importantly, over yourself.

But before I go into today’s lesson, I want to remind you…

·        This 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, it’s great to meet you, but you might want to go back and start from the beginning to get the most value out of these lessons. 
o   Here’s the link to watch from the beginning:
·        You can find all the text that goes along with this video on my blog at
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·        I also want to remind you to subscribe to this YouTube Channel and
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Ok, now that we got that out of the way… let’s get into today’s lesson.

Today we’re talking about the “market-mindset advantage”, and I’m going to have some actionable homework for you at the end of this lesson, so make sure you stick around to the end.

As traders, our goal is to use our journal to identify those patterns in our decisions, then we break those patterns into two categories, those which are helping us, and those which are hurting us.

Once we know those patterns, then we can methodically attack; removing mistakes and building on strengths.

As I mentioned in the introduction, most people, when given the choice, will start working on their weakest points first, but the shortest path to success is actually building on our strengths.

There are (3) three main reasons why…

1.      Mindset:  it’s a LOT easier to get motivated and stay positive about working at things you’re already good at.  On the flip side of that coin, it’s much easier to lose momentum when we’re constantly doing things that we just aren’t wired-for.   When we focus on improving our strengths, we find inspiration much easier, we progress much faster, and we enjoy the process along the way!
2.      Focus:  I think most of us have heard about “the law of attraction” before.  Simply put, the law of attraction is the belief that by focusing on positive or negative thoughts people can bring positive or negative experiences into their lives.  When it comes to trading, if we focus most of our energy on getting positive things, the probability is higher that we will achieve those things.
3.      Mastery:  The world we live in rewards people who invest time to truly master something.  You don’t need to know everything, you just need to know a lot about a little to be incredible successful.  Knowing this, focusing on our strengths allows us to become GREAT at something we’re already GOOD at.  If we focus most of our energy on our weakest points, we may become good at it, but we’re probably not wired to become GREAT at it.

So, by focusing our energy on building to our strengths, it’s more enjoyable, much easier to stay motivated, it triggers the law of attraction, and our chances of becoming GREAT (and paid for it) are much higher because of it.

So, the next question would be… how do we know our strengths?

In my last video, I gave you a list of 10 categories that you can use for your trading goals.

If you have at least 90 days’ worth of trading experience, you probably already know which of those categories comes easiest to you, and if you don’t know, take some time on a simulator, pay close attention to each of the 10 categories, and find the “patterns” that are unique to You.

It’s also important to remember, that although you may not be profitable in your trading at this time, if you use the proper goal-setting strategy, you can identify your strengths, work hard to make them better, and even with losing days, you can still feel good about yourself because you’re making progress.

So, don’t let your PNL at the end of the day get you frustrated.  Don’t let a “red day” make you think you’re not working the plan correctly.  

Our daily goal, as discussed in previous lessons, isn’t tied to profit and loss, it’s tied to something that WE control, such as executing a piece of our strategy better than we did the previous day. 

In other words, successful traders define their success in the PROCESS, not the profits, because the PROCESS is what leads to long-term profitability.

Think about it this way; we can always find things we did well, even after a losing trade.  But we can also find things we did wrong, even when the trade makes us money.

I like to always finish my day by asking myself… “what did you do better today than you did yesterday?  What did you right today?  What was the best thing you did today?”

Keeping those positive results fresh in my mind makes it easier to keep working hard, keep following the plan, and easier to overcome the bumps and bruises along the way.

Another trick of mine… I like to read my journal and look at old mistakes that I don’t make anymore. 

For example, I remember many years ago I had a horrible habit of jumping into trades too early, I never waited for the signal-candle to properly trigger the entry.  It was an easy mistake to make, but hard for me to fix, and over time I kept at it and that mistake is something I NEVER make anymore. 

What did I do to avoid those mistakes?  What changed?  What tricks did I use to coach myself through it?  When I look back and see those old mistakes, it gives me insight into ways I can overcome mistakes in the future.

I’m not saying to do this every day, but once a month, use your journal to look back and see how far you’ve progressed… because you’ll likely see NEW patterns in ways you’ve effectively removed mistakes before, and you can use those tricks to solve problems in the future.

The most important thing I want you to get from this lesson is that when you have a mindset that focuses on your strengths, it’s not only easier, but it shows you those decision-making patterns that are truly yours.

I’ve worked with over 3,000 clients at SchoolOfTrade, I’ve been running my trade room for over 10 years now.  That’s over 500 weeks of coaching my clients, and I can honestly say, that out of all the many success stories, I have never seen two people trade my strategy the exact same way.

When someone graduates from the SchoolOfTrade, they may have a similar strategy, similar skills, but the way they handle themselves is uniquely theirs, and can never be taken away from them.  That’s the true beauty of the business of day trading.

And the best part, once you see the power of building on your strengths, it gets addictive. 

Soon you’re going to have more confidence in your own abilities, you’ll know that you can overcome anything if you use the right strategy.

You’ll be setting bigger goals, riding the momentum of your own success, you’ll soon be your own role model, and it all started with using your journal, identifying patterns, attacking weaknesses, but keeping those strengths in the front of your mind at all times.

Here’s some homework for you…

Go back and read your journal, and look closely to see how many times you’re positive, and how many times you’re negative in your journal entries.

I’ll bet that most of us are relatively negative in our journal, and just like hanging out with negative people, it has a BIG impact on our mindset.

We’re a byproduct of the people we surround ourselves with, and just like removing negative people in our lives, it’s a good idea to make sure you’re not letting your journal beat you down as well.

When you’re writing your daily summary in your journal, ask yourself…

·        What did I do well today?
·        How did I successfully avoid previous mistakes?
·        How am I becoming (my version) of what a successful trader should be? 

Make it a goal this week to start balancing your journal, keeping those positive actions fresh in your mind, asking yourself those important questions to keep the momentum moving in your favor, and not allowing your journal to become a bully.

This reminds me… when I was a kid…the best coach I had in baseball always told me what I was good at, and that positive reinforcement made me a better player.  The same is true as you coach yourself each day to follow your rules, trade your plan, and reach your goals.

One more thing about focusing on your strengths…

Would you agree that the markets have strengths and weaknesses also?

We’ve talked about focusing on OUR strengths when it comes to our own trading decisions, but I also want to remind you that the markets have strengths and weaknesses as well!

Would you agree that there are times when the markets are at their best?  Absolutely!

Sometimes I get to my desk in the morning and price-action stinks!  Those are the times when I’d be better off sitting on my hands…right?

And then there are times when price-action is moving well, with great rotation, great liquidity, and those are the times when I want to buckle-down and make my money!

So, another homework assignment for you this week is to go back, read your journal, and identify those times when you traded really well… then look at the chart… is it possible that maybe YOU and the MARKET made a great team that day?

Is it possible that there are times when the markets are in-sync with your mindset? 

I think that happens quite often, we just need to be looking for it.

Your journal is the key to identifying those times when the price-action suits your strengths and everything comes together in a profitable day… something I like to call the “market-mindset advantage”.

Once you know when YOU are at your best, and when the MARKETS are at their best, then you have a powerful combination for success… and all you need is to look for it.

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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