Written by Katie Gomez

A trader’s mindset determines more than we think and can play a crucial role in their overall success in the markets. It matters if you think optimistically or pessimistically because those influence your decision making. Luckily, a trader’s mindset is not a fixed thing. You can improve your mindset to work in your favor. Read on while I will review some tactical ways traders can improve their mindsets and exemplify how exactly mindset is a strong indicator of success. 

The market constantly fluctuates. It’s easy to let our emotions fluctuate along with it. However, creating a solid and consistent mindset to follow, just as you would a trading plan, makes it much easier to keep control. A positive attitude is essential for anyone in stressful careers such as stock trading, real estate, and law because you constantly deal with situations outside your control. Not to say positive affirmations outweigh skill, knowledge, and practice as a trader, but we should not underestimate the power of positive thinking to create the right mindset. 

Mindset can significantly impact our success as a trader, affecting our cognitive abilities (decision-making), self-efficacy, confidence, consistency (during troubling times), emotional regulation, etc. However, molding becomes more difficult once we settle into a mindset and continue with it over time. Our mindsets are not conscious choices, they’re hardwired subconscious programs ingrained into our brains over time.

Benefits of a positive mindset:

1. Confidence and self-efficacy: a more positive mindset can instill a higher sense of self-belief in your abilities as a trader. Believing in yourself is crucial in executing trades with conviction and staying on track with your trading plan during chaotic times.
2. Emotional stability and regulation: Learning to cope with and regulate your emotions is a significant part of being a good trader. Stock trading is emotionally demanding with polarizing swings from loss and gains, which can send you spiraling. The right mindset can help you more easily maintain emotional stability, allowing you to make rational decisions based on analysis and strategy rather than succumb to fear/greed and better manage your risk. 
3. Resilience: as a trader, setbacks are inevitable, but a positive mindset allows you to better learn from mistakes and turn devastation into motivation. 
4. Adaptable/growth mindset: along with resilience, a positive attitude allows a trader to become more flexible to their surroundings, more open-minded, and thus learn and grow at a much more rapid rate than traders without. 
5. In focus: a positive mindset helps traders concentrate on the real prize, the long-term goals rather than the short-term fleeting outcomes of individual trades . When your head is clearer and you can focus on the bigger picture. Additionally, the detachment separates traders from short-term gratification and concentrating on the long game.

To shift your mindset as a trader, consider trying the following:

1. Self-awareness: keep track of your triggers. When negativity creeps in during the day, note areas of strength and weakness and be patient with yourself.
2. Visualization/affirmations: create a routine built around your morning, repeat the same affirmations, or visualize how you intend the day to go. What would the best-case scenario day look like? Picture it, embody it before you live it. 
3. Practice mindfulness: You can do this by taking breaks and turning off the screens. Trying meditation, breathwork, or even getting outside for some sun can reset the mind and nervous system. Practicing mindfulness will make encouraging and sustaining a positive mindset a lot easier. 
4. Surround yourself wisely: Spend time with like-minded, optimistic traders, avoid oversaturating the day with news, and stick to a routine that ignites as little stress as possible. 
5. Continuous learning: always be the student. As a trader, invest time in education and improving your trading skills. The market is constantly evolving, and so should you. The more knowledge and skill you possess from webinars, courses, or mentorship, the less stressed you’ll be when things happen.  You will be better equipped to approach it from a solution-oriented mind, thus making it easier to maintain your new positive mindset. 

A positive mindset is one of the most important skills to cultivate for a trader. It influences decision-making, risk management, emotional stability, learning ability, resilience, self-efficacy/confidence, and detachment from outcomes. Cultivating a strong and positive mindset can significantly impact a trader’s overall performance and success in the market. Nevertheless, like most things worthwhile in this life, it will take time to see noticeable and sustainable shifts in your mindset. Be patient, be consistent, and see how far a shift in your perspective can take you on your trading journey. For more information on how to help make that shift that much easier, visit Trade Ideas today.