Is Trading all about psychology and having the right mind-set? - Bina Forex | Managed Account SolutionsBina Forex | Managed Account Solutions

“Hi Marco, I keep on reading about the importance of psychology and the right mind-set in trading, how important is it and is it really all it takes to be successful?”

This is one of the most common questions I get and see tons of stuff written about on the internet and in trading books. I think it’s one of the most misunderstood concepts in the world of trading, let me explain why.

First of all is a good psychology/state of mind/being in the zone important in trading? Yes, absolutely!

Can you be a successful trader without it? No!

If you work on this and become a really balanced person who no longer makes any mistakes because of psychological issues will this automatically make you a successful trader?

Only if you have an edge and everything else you need to succeed.

So actually the answer is quite simple. Being in the zone is an absolute requirement to become a profitable trader. If you lack discipline or have self-destructive behavior patterns that you are not aware of and don’t know how to deal with you’ll keep on losing money even if you have the best trading system in the universe.

You need to be disciplined enough to execute your trading plan and exploit your edge in the markets. If you can do that, you’re fine. But that’s pretty much it. You’re not a professional tennis player, you’re a trader.

But let’s face it, you can be 100% in the zone and you still won’t make any money if you don’t have an edge in the markets and proper risk/money management.

Trading is a puzzle and if any crucial part is missing you won’t succeed even if the other parts are all fine. One of these parts is your state of mind and that’s why it’s key to work on improving it and to make sure you stay in balance. Get to know yourself really well, know your weak spots and how to work with them. If you don’t know your weak spots the markets will find them again and again until your account is gone.

How to improve your mind? It really depends on you and what works for me might not work for you at all. For me doing some basic mindfulness exercises on a regular basis has allowed me function well in the world of trading. It simply helps you to be aware more and more quickly when you start doing something you shouldn’t do, for example trading your P&L instead of the market or not getting into a trade you should and so on. And once you’re able to see that behavior pattern playing out there’s a moment where you can stop.

Do that again and again and it becomes a habit. Keep the good ones and get rid of the bad ones!

Is Trading all about psychology and having the right mind-set?.

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