The Psychology of Trading – Why you will never succeed as a trader until you fix this.

Every trader knows that psychology is one of the biggest aspects of being successful in the business.

But research shows that most traders continue to spend time learning new techniques, strategies, indicators and other skills.

Most traders, especially the new ones, never invest time or money to improve their psychology.

The biggest surprise to the newcomer is that most professional traders have a psychology coach.

Let’s dig deeper into the importance of the psychology of trading.


The Psychology of Trading – Your Unconscious Mind is Killing You… Because You Trained it that Way!

Did you know that your brain takes in approximately 2 million bits per second of information?

Now, how much do you think your brain can actually process?

One million? Five hundred thousand?

Nope and nope.

Just 135 bits per second!  Or, said differently your brain only processes one five thousandth (1/5000) of the information it sees.

Your entire perception of life is based on a fraction of reality.

Now before I go all out Matrix on you, let me explain one last thing and I’ll bring it all back to trading.

The big revelation of this information is that the subconscious mind controls the majority of the information.  

The reality is, you are not in conscious control of your actions.

Have you ever experienced a day where you amass big losses, only to review your journal at the end and realize none of those trades were in line with your strategy?

If you are repeating bad habits with little self control, it’s your subconscious mind doing what it does best – sabotaging your actions.


The Psychology of Trading – Self Sabotage is the Silent Killer of Traders

You might be reading so far and thinking, there is no way I’m the biggest reason I’m not successful.

It has to be the strategy, the market, the blah, blah blah.

No, no and no – it’s you. Maybe unknowingly, but it’s still you.

Here’s why.

Your subconscious mind is a servant to your body.  It controls all the processes so you don’t get overwhelmed.

What do your socks feel like on your feet right now? Comfy?

I bet you didn’t realize they had a feeling before I asked.  Your subconscious mind did know that. It processes all the “brainless work”.

It is in fact the main operator of your body’s valves, switches, levers and whatever else controls you.

This is very important – the subconscious mind’s sole purpose is to defend you and keep your body functioning.  Let’s call this part of your brain the “operator”.

Now let’s bring this back to trading.

When you are working a 9 to 5 job, you have job security. Your operator is sitting back and monitoring everything – making small inputs when needed.

As a trader every minute is a minute of zero job security.  You have to fail often to be successful.

Your operator is not used to handling that risk and freaks out by making sure it brings you back to “safety”. It pulls, pushes, yanks those levers – whatever it takes to eliminate the perceived risk.

The implications here are staggering.

This means that you will lose trades purposely and cut risk in the name of safety – all in the subconscious part of your mind.

The Psychology of Trading – Strategies to Overcome Self Sabotage

The good news is that you can regain control of your operator.

You can train that operator to calm down at the controls and actually help you be successful.

For this reason, a lot of professional proprietary trading desks provide their traders access to a psychologist.

This isn’t just a gimmick on the TV show Billions – it’s a real thing.

In order to overcome self-sabotage you need to re-write new subconscious mind patterns.

There are two ways to overcome self-sabotage in the psychology of trading:

  1. Create a 21 day program to create new patterns and re-write old ones
  2. Book a coaching session with one of our licensed Neuro-Linguistic Practitioners and hypno-therapists (achieve the result in one session (30 mins) with high success rate)

Click here to ask about our coaching services >

The problem with trying to fix this issue yourself is that you have a bias that favors you.

A better reason is that your subconscious will be less likely to listen to you to overwrite habits that are designed to protect you.

It’s possible, but the usage of “affirmations”, visualizations and meditation will only help you get balanced, and are not likely to change your programming.

You really have to go in there and have a direct discussion with your operator.

I will show you a nice morning exercise to help you get into your flow and eliminate negative emotions and get you on your way to changing habits.


The Psychology of Trading – Getting into Flow Before Trading (In the Zone Exercise)

A lot of athletes and people that work a true performance based job are very familiar with flow.

Remember a time when you had insane focus and you did not realize anything in the world around you?

You just worked and worked, and it all flowed out as if those it’s just flowing through you.  That’s flow.

This is the state you need to be in to trade successfully.

To get into the trading flow, follow these steps every morning 5 minutes before you start trading:

  1. Close your eyes, spend one minute and see everything around you with all your other senses (hear the background noises, smell the air, feel your chair)
  2. Open your eyes, look up at a 20 degree angle
  3. Continue to notice your surroundings while staring at one spot, expand your peripheral vision
  4. Think of what your trading problem has been
  5. Visualize an example of you getting through that problem, make this vivid
  6. Think of why you trade – freedom, family, being your own boss?  Make this vivid and believe in it’s importance!
  7. Tell yourself that risk is the means to achieving the reward!  You have to take risk to reach your goals. Risk is a friend.
  8. Set a daily goal – what do you want to achieve today?
  9. Start analyzing, review your trading plan and get ready
  10. Execute, make it happen!


The Psychology of Trading – Conclusion

Most professional traders either actively receive, or have received psychological and performance coaching.

It’s time you treat yourself to the same.

One last tip I want to share with you is to stop thinking of risk as something bad.

Think of risk as something necessary to be successful.

Taking risk is the means to reach your goal.  No risk, no success.

Forget the cars, the freedom, being your own boss.  No creating the dream life for you and your family.

Risk is not the enemy – it is your friend.

Tell yourself that, and tell the operator you are in control and to start working for you.

If you want to trade in a community of successful traders, you are among the right crowd.

We cover a lot of this information in our courses, and make it our mission to make you successful.


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Have a great week, trade careful and focus on managing risk.



The information contained in this post is solely for educational purposes, and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. TRADEPRO Academy is not responsible for any liabilities arising as a result of your market involvement or individual trade activities.