Like most emotions, doubt is normal. It is when doubt takes over your mind and influences behavior that you must watch out for … and you must be careful as this could foreshadow a much more dangerous core issue. You must develop a mindset that is focused on trading to win. This is much different from an orientation that is focused on trading not to lose. A trading not to lose mindset is based on the need to remain in your comfort zone and to constantly look for ways to get back in the comfort zone by capitulating to impulsive behavior and hoping that your plan (if you have one) works out. Traders who have a trading not to lose mindset don’t want to put forth too much effort and continually look for a quick fix to their issues or a magic bullet that will create results out of thin air with no regard for their development. On the other hand, trading to win is about personal growth and having the courage to meet challenges. Traders with this mindset realize that trading success is about a commitment to excellence and a belief that learning (both about the market and self) is critical for consistent positive results. The core paradigms and mental models of trading not to lose are driven by fear and greed. These emotions are attached to deep seated limiting beliefs about self and these limiting beliefs conjure unsupportive thoughts. Thoughts similar to the following; “…I must get out of this trade, I can’t possibly allow any losses that I can prevent, that would mean I’m wrong and being wrong is for losers.” Conversely, the core programming of a person trading to win reflects a belief that losses are a part of trading, that every small loss gets you closer to a big win; and that there is an abundance of opportunities. Additionally, they believe that they don’t have to worry about being wrong and impulsively exiting one trade because there will be another, and another after that. Furthermore, they understand that being wrong provides more information and data in order to build their skills.

A trading to win mindset includes a search for objective reality while in the trade. They realize that resonating with the reality of what the charts are showing provides a safety net against illusions brought on by fear and greed. Looking at the reality of what the charts are showing means that you’re not paddling up the river of “denial.” A trading not to lose strategy is closed with limited alternatives; it blames others or outside influences first and seldom looks inside to identify issues that are negatively affecting results; this strategy promotes irrational thinking.   The trading to win mindset owns all results by using techniques like journaling to find out what is and is not working. The trading to win trader is prepared to use protocols and effective routines in order to develop skill based habits and ensure sustainable success. The trading to win mindset is intellectually and emotionally honest along with mustering the enthusiasm and energy necessary to vigorously take on trading weaknesses. You can’t take on a weakness that you either don’t know or don’t understand. Trading not to lose encourages erratic and illogical behaviors while looking for the easy win, often putting large positions at risk thereby simply gambling, and by reneging on commitments to established rules – if they have rules at all. The trading to win mindset recognizes that trading necessitates losses and that effective long-term winning means managing risk, having an iron clad commitment to rules, goal-setting, planning and methodical, smart trading. The trading to win orientation is winning the psychological war one battle at a time – “going as far as you can with all that you’ve got” in a growth focused, joyful, honest and healthy way.

Issues, obstacles, and problems that plague your trading must be treated like an infestation in your home, you want to know if the vermin are there so you can weed them out and get rid of them. That’s why the “Thought Journal” is a critically important addition to your tool belt. Most of you already know that smart trading means tracking and documenting your trades in order to get data on how well your trade plan is working. Similarly, you must also gain data on what you are thinking and feeling because this is how you uncover the unconscious issues that act as drivers to bad behaviors that bring on unwanted results. You’ve got to be willing to dig deeply to find out; you must drill down into your issues and face them with the right tools in order to resolve them. A “don’t-bring-me-no-bad-news” outlook is going to turn you into a Sisyphus, the Greek mythological character that was doomed to roll a boulder up a mountain only to never reach the top. You’ll never reach the top of your trading goals but will be doomed to push that boulder (your issues) until you run out of either energy or money and it’s usually the latter first. The smart trader accepts the challenge and realizes that trading to win is about the long haul.

So, you must decide which mindset you are willing to develop in the service of your trading. Will it be the courageous and comfort-zone expanding trading to win, where you are committed to growth and excellence? Or, will you reach for the easy button with a strategy based on not wanting to get outside of your comfort zone; avoiding challenging yourself and trading by default with blinders on. The choice is always yours. Remember, trading to win is where you are going as far as you can with all that you’ve got! This is included in the aim of bringing and keeping your “A” Game at the trading platform while using mental and emotional tools from your handy tool belt.

There is a common quote that has become somewhat of a cliché. It is, “the definition of insanity is continuing to do the same thing and expecting a different result.” No doubt you are aware of it. It might be a cliché but that doesn’t mean it’s not affecting thousands if not millions of traders every day. Are you struggling with this issue? Are you continuing to say that you are not going to chase a trade, inappropriately move a stop, double down on a loser, etc., but still falling into that trap? Are you finding yourself saying that you will create a trading business plan, or construct a micro plan for each trade, or document your trades; but finding that you are consistently “not” following through with your commitments? This is a self-discipline breech that if uncorrected will bleed your trading account dry. This is why people ask themselves, “why” do I keep doing this?

The first thing we must remember is that habits, which are actually patterns and programs that have become “automatic”, are difficult to break. What has happened is that you get caught in a pattern of thinking, feeling and doing, which is contrary to getting the results that you want. This pattern is “triggered” by something that you, for example, see in the charts or hear on the news that you ascribe a meaning to that is usually negative and therefore the pattern is negative. In fact, you may often be oblivious to the fact that you are caught in the pattern until you have committed the violation. Consider this, Sally winced hard as if her skin had been pierced by a deep dull needle. She had sworn over and over that she wouldn’t do it. But here she was, again caught in a web of self-induced seduction driven by greed and fear. “Why is it so hard?” she thought as she looked at her trade. She had input a limit order to buy 3 contracts of the NQ as the price action was about to hit a demand level on the 60 minute chart. She had meticulously determined from her daily and weekly charts that a significant demand zone was about to be retested. The lines had been drawn and her plan; as it usually did, outlined in precise terms her entry, rational, targets and scale points. Actually, the plan was flawless as evidenced by the fact that the price action did exactly as she had foreseen. And, if she had not exited the trade prematurely the market would have proven the plan to be correct. But, alas, she became more and more frightened as the price action breathed till it became unbearable whereby she gave into the pressure and exited the trade for a miniscule profit only to watch it take off like a towering green bamboo shoot rising from her exit. In this instance like so many times before she had let herself down; and, she felt stupid, depressed and desperate to know how to stop this madness.

Humans are creatures of habit. Doing the same thing in the same ways fosters a level of familiarity and is comfortable…even those habits that are not in your best interest. Comfort and pleasure are what you seek and by the same token you want to avoid discomfort and pain. Now, what is paradoxical is that in your determination to avoid discomfort and pain you’ll actually cause it; as did Sally, by succumbing to an archaic ego driven defense mechanism that had been created ostensibly when you were quite young and that is now running roughshod over you to make sure that you don’t “get yourself into trouble.” How does this happen? Well, when you were young, let’s say a toddler and you broke something that mommy really liked, so you were yelled at and felt shamed; or in early elementary school and you were called upon to answer a question and you didn’t know the answer prompting cruel laughter from your classmates and a stern disapproving look from the teacher, you felt humiliated. Then, your all protecting ego would say, “…see, you are bad because you made mommy angry so you mustn’t play or you’ll get hurt,” or “…you are not smart so you must be quiet so that you don’t get hurt again.” These experiences and others like them create what is called a neural network of encoded sense stimulations of these experiences/events; in other words everything that you saw, heard, felt, smelled and tasted along with thoughts and emotions become connected. This neural network of brain cells are connected electromagnetically and electrochemically to these sensory stimulations and will “fire” every time a similar experience/event happens in your life. So, as you grow similar things happen, you break something, or people laugh at you, or you do something that otherwise incurs the ire of those in authority or that you look up to. Then your ego says, “…see, I told you, that is not for you to do because you are not good enough, smart enough, talented enough or deserving, or whatever else it might have associated to this original experience. These become unconscious conversations that lurk below your awareness level and that conjure up all manner of additional negative emotions like disappointment, rejection, anger, frustration and many others. This is how neural networks get connected to other neural networks and they form very strong barriers between you and effectively challenging yourself in order to grow. These neural networks that continue to fire together will “hardwire” together meaning that they become like a well worn trail or a deep rut or cavernous scratch in a vinyl record. When that happens the default behavior then becomes avoidance and anxiety based. You are then operating from a position of fear. This type of default behavior strives to remain in the comfort zone where there is no growth. You cannot grow in your comfort zone, you must get out. Growth requires stretching, tearing, and breaking out of old tissue physiologically and old psychic constrictions psychologically.

To put it another way, as you grow from a child, you form relationships with everything around you, people, places, things, creatures and the like. Each one of these relationships has an internal depiction or (neural network) that is represented by all the chemicals reactions in your brain that represent that relationship including the feelings and emotions. If you change that relationship then the network breaks and reforms. Think of how it feels to break up in a relationship with someone. It is quite painful and fraught with emotional turmoil, and that is a good break-up. That is how change occurs on any level of your thinking, feeling and doing and when you break a habit you are “changing.”

So, when you find yourself asking “why” am I continuing to do this? You must identify first the underlying pressure that is motivating your thoughts, which are usually limiting beliefs. In other words, you’ve got to find out what the issues are so that you can address them and get to the root cause of the pattern. Remember, your best is the only game that will do in the trader trenches and you must be proactive and self-aware as you delve into the execution of your plan. Don’t allow yourself to get caught in the vicious cycle of “doing the same thing over and over and expecting a different result.”

One of the most important intentions of serious trading is to be focused on consistent skill building. The equation for skill building can be described as P+R+F+H=SB (protocols + routines + feedback + habituation = skill building).   Protocols can be defined as a sequentially ordered series of steps toward an aim or a goal. Protocols dot the cultural, economic, political, legal, medical, athletic and diplomatic landscape. They involve strategies for research, treatments, due process, sports training, business planning, investing and of course trading. Successful traders identify strategies, procedures, set-ups and rules or (protocols) that they explicitly use to systematize the process of trading. They do this because the markets are inherently erratic and cannot be totally predicted to move in any particular direction at any particular time. If you are not basing your process on established strategies for entering and exiting in order to identify a high probability setup, then entering and exiting become arbitrary and at that point you are gambling. Routines are an important component to skill building because routines have the potential of “neutralizing” erratic behavior. Effective trading requires that you are consistent in “how” you execute your strategies. Doing the same “effective” behavior over and over in order to have a “how”(perhaps a checklist) that is matched to high probability strategies will create a positive pattern.   If you are inconsistent it will be very difficult if not impossible for you to track your progress, which brings us to the importance of Feedback. Feedback allows you to verify, measure and document whether or not the protocols are providing the expected hit rates. If not, protocol modification is in order as you uncover any negative/limiting patterns of thinking; feeling and doing that would compromise your analysis and/or your follow-through. Feedback, documenting or journaling is a very robust way of identifying faulty limiting beliefs that promote the fitful emotions that drive destructive behavior. If you failed to document and therefore don’t know what you did in a specific trade to gain that profit, you can’t duplicate the behavior. Remember, you can’t change those limiting beliefs and negative thoughts that you are not aware of. Lastly, you’ll want to “habituate” to this entire process. In other words, you must incorporate a repetition response and create a “habit.”

Another word for habit is “program.” As it happens we are prewired to be habit formers from our earliest moments of infancy by downloading the programs of our parents and later all authority figures in our sphere. We also develop a “pattern” of responses based upon those downloaded programs and these patterns are habits. So, as you look at your trading patterns and habits it is important to embrace the critical importance of them and why you’ll want to become aware and be deliberate about coming up with patterns/habits that will serve you. You got it, those “effective routines” mentioned in the above are new habits-in-the-making which you’ll want to install and it is also important to uncover the patterns/habits that are creating the results that you don’t want. One of the ways to initiate a new routine is to hold yourself accountable and take responsibility for how you are thinking and what you are doing; that is, you simply execute or follow-through with the new behavior for at least 30 to 60 days it will download into your unconscious.

Routines are powerful habit formers and if you identify a routine for the beginning of your trading session, you will create a support mechanism for optimal ability to perceive the reality of the market order flow. It is important to have an attitude that holds trading enjoyment as a reflection of trading mastery – skill building – and going as far as you can with all the tools and expertise that you’ve got. Here are some ideas that will support you in identifying and incorporating new habits. Habits are lodged in the subconscious mind. In other words, when you have repeated a behavior for 30 to 60 days it drops into unconscious control and becomes “automatic.” In this way a “good” habit becomes a “stored solution” which is why it’s so important to store the right information. Rewards increase habit strength, and stress drives behavior to default to old habits…whether favorable or unfavorable. This is why you must celebrate when you have followed through with that new routine. Do this: List one routine that is part of your day and identify one bad habit that, if altered and replaced by a more supportive habit will positively impact upon your results. Review your morning, noon and night rituals and select some supportive habits around each of them. List one reward you might use to motivate yourself if you could establish a new habit.

The following is a regimen that will benefit your entire system (mind, body and spirit) greatly. Anything that supports your entire system will support your capacity and ability to accurately read what the markets are saying.

• At the beginning of your day, drink a large glass (8 – 16 ounces) of water in order to hydrate your system.
• Start your day with exercise. Energize your system, oxygenate your bloodstream and get the cobwebs out of your brain and body
• Try a meditative session to ground you in a relaxed and aligned state in order to be available, patient and focused with intention.
• Eat a light nutritious breakfast, and drink juices and/or herbal tea to maintain focus and mental strength.
• Review your Plan and Trading Rules to keep them fresh in your mind.
• Do your homework, whatever supports your style and trading strategy. The point is to “do it.”
• Go through your daily trading strategy “out loud.” This has a way of flushing out distortions. Look at the charts you are planning to use.
• Then take a deep breath and enjoy becoming one with the price action and order flow.

As you install new programming or habits, it is critically important to address both your “mechanical data” and your “internal data”; if you want to have any chance of brining your “A” Game to your platform. Make sure that when you turn on your computer and pull up your trading screen, you are ready and prepared to access and activate all of your resources. So, trade by design not by default by establishing effective routines and habits that will support you in getting the results that you want.

Comparing…we do it all the time. We compare food, drinks, cars, clothes, houses, TV shows and actually anything and everything. In fact, when we compare we are placing a “value judgement” on those items to be ranked or in some way categorized.   The Oxford Dictionary – short internet version – defines compare as a verb, meaning to:

• 1. estimate, measure, or note the similarity or dissimilarity between for example “individual schools compared their facilities with those of others in the area”… synonyms: contrast, juxtapose, collate, or differentiate
• 2. Form the comparative and superlative degrees of (an adjective or an adverb) for example “words of one syllable are usually compared by “-er” and “-est.””

The Oxford Dictionary – short internet version – defines judge, as in “to judge” as a verb, meaning to:

• Form an opinion or conclusion about as in – “scientists were judged according to competence” synonyms: form the opinion, conclude, decide, consider

Now, when you consider the two definitions, although they are not exactly the same, they are qualitatively quite similar. On the one hand both are creating the conditions for discernment and discrimination based on your sensitivity to and regarding what degrees of difference and their meaning; hence a “value judgement.” For instance, you might look at a Bollinger Band and weigh its merits versus a Keltner Channel (these indicators are both used to gauge volatility) or a relative strength index (RSI) versus commodity channel index (CCI), two popular technical oscillators that serve as different methods of spotting extreme price behavior. The point is that this type of valuation is not only oriented to service your trading it is arguably necessary as you measure, weigh, consider, contrast and identify the strengths and weaknesses of particular strategic approaches to your trading. In other words, trading contexts and content are in competition so-to-speak so that you can choose among those best suited to your trading style. Now, on the other hand; and let’s hope I haven’t buried the lead too deep; this type of approach of comparing and judging yourself as a trader to someone else, can lead to dismal results.

Comparing is judgement and judging things or processes or strategies, or whatever is human nature but unfortunately all-to-often it extends to judgment/comparing yourself to someone else. This inevitably brings up limiting beliefs like I’m better or worse, good or bad, and in some cases I can’t or won’t. In turn limiting beliefs lead to thoughts of superiority or inferiority that can prompt you to feel sanctimonious and sexy or reviled and rejected. Judgement is a favorite pastime of humans…we do it all the time and for all manner of personal interactions; and that leads to fear, anger, anxiety, jealousy and envy, to name a few. All of which are like dry rot to your trading results. It’s OK and in fact recommended to have role models and mentors to use as examples of how to become consistently successful traders, but you are not in competition with them or anyone else … only with you. The fear of rejection is alive and well and to defend against this vile emotion people often revert to using one-upmanship as in pointing out someone else’s mistake or failure to inflate their own lack of self-esteem as an over compensatory measure to mask the inner anxiety of being “found out.” Or, they withdraw into confusion and self-doubt ramping up performance anxiety and fear often resulting in rule violations like freezing at the trigger.

If you have been trading for any length of time then you have experienced the disruptions that negative emotions like those above can wreak on your trading process and execution. It is important to manage your emotional state and attaching your confidence and self-esteem to whether or not you can “keep up with the Joneses” is not in your best interests. Additionally, it is not in your best interest to harshly judge yourself either. Using condemning language to describe yourself or your results, like “I’m such an idiot for doing that” or “I can’t do this right” is counterproductive and destructive to your ability to competently assess the situation and determine the appropriate response to correct or get back on track after a rule violation or commitment failure.

When immersing yourself in the trading trenches it is crucial to not only manage your trade but manage yourself in order to remain on the right side of the order flow. Comparison and judgement in most cases only lead to problematic internal states that don’t support your ability to remain on target on task and on purpose in your trading.

Trading is a tough business. It challenges your character flaws, personal issues and weaknesses at every turn. It is for this reason that persistence and perseverance are crucial to your ability to not only bring your A-Game to the trading platform but to sustain it over the long haul. How often have you found yourself at a “fork in the road” of your trading and faced with a choice to either go to the left and violate a rule thereby doing something that is not in your best interest; or go the right and bring your highest and best trader to focus attention on what matters most. Tapping into this type of energy is what can make a distinct difference in following through with you plan and your rules.

The definition of persistence is basically never giving up. Perseverance is never giving in. Roz Savage knows something about never giving up and never giving in. She holds four world records for ocean rowing, including first woman to row solo across three oceans: the Atlantic, Pacific and Indian Oceans. She has rowed over 15,000 miles, taken around 5 million oar strokes, and spent cumulatively over 500 days of her life at sea in a 23-foot rowboat. In 2010 she was named Adventurer of the Year by National Geographic. Some people do not allow obstacles, setbacks, or hardships get in their way to keep them from what they want. Don Jackson is a black man who was dyslexic in the late 40’s and 50’s at a time when most professionals didn’t know what it was. He grew up labeled as retarded in special school systems. But, Don knew that he was not retarded, he had a light emanating from his Spirit into which he plugged his heart and decided that he too wanted to learn. When he decided to go to college everyone tried to discourage him, thinking that they were saving him from major disappointments and pain. But Don never gave up. Even though it was very difficult because of his disability, he did well. He passed his remedial studies and was admitted into college whereupon he not only graduated but today is a Ph.D. in education and works with young people whom society has given up on. He had persistence and perseverance … never gave up and never gave in; he would not allow anything to keep him from his burning goal. He never lost sight of his vision. He created solutions to his problems.

There are 5 critical steps to achieve strong levels of persistence and perseverance:

First, have a trading purpose and a vision of that purpose. Rekindle the vision of your purpose everyday as it will connect to the passionate emotion that sustains you. It reminds you daily of the rewards and benefits of the goal. If you haven’t identified your purpose for trading you’ll want to take care of this right away. Your purpose is the starting point for successful trading. It is where you connect the “what-matters-most” of your life to the “what-matters-most” in the trade. It is how you infuse a passion for remaining on task to the process of your trading. The visualized purpose is the vehicle that drives you like a turbo jet towards your trading goals.

Secondly, the journey of 1000 miles begins with one step. You must firmly anchor the attitude by using this heartfelt statement as your own; “I can achieve anything I set my heart and mind to, nothing is impossible for me to achieve if I want it badly enough and am willing to pay the price, for no matter how much work is involved, or how long it takes, or how difficult it is, I can and will achieve”. This belief in self is imperative to remaining focused.

Thirdly, remember to view setbacks, losses and failures as learning opportunities – those things that hurt, instruct. All great achievers have made innumerable mistakes and have failed, that is what provided the “experience” and the “education” that actualized achievement.   This is necessary to manifest your trading vision.

Fourthly, always increase your market knowledge by identifying the mechanics that will help you to form a foundation in the markets that you have chosen to trade. This can also be termed “a results orientation.” Experiment with different approaches, perspectives and paths.

Fifthly, transform your work into fun. Make what you have to do, into something that you want to do. Work toward your life goal shouldn’t feel like a sacrifice because it is what you want more than anything for you and your family. As you gain more “process mastery” in your trading you will increase the “joy” of doing it well.

Now, let’s look at five ways to deal with setbacks:

1) Don’t aim to avoid a handicap such as starting your trading business without capital or wanting understand a new market despite time constraints. If you have a challenge study it from all angles and seek to identify a creative solution; otherwise a tiny toy wrench can grow into a huge iron monkey wrench stopping your progress cold.

2) Don’t blame others for your problems. Successful trading requires personal accountability and self-limits. Be honest with yourself. Use your mentors and as well you can be your own mentor by pretending that someone has come to you for advice on that very trading issue. How would you answer them?

3) Continue to strive and strengthen your qualities of self-discipline. You will not make it as a trader if you can’t keep your commitments. Setbacks that are caused by commitment implosion often can cause weaknesses in special areas, turn the weakness into strength. Be your own heaviest critic but don’t beat yourself up – in other words, you are not a failure, you had a learning experience.

4) Every setback or loss has a silver lining or seed of opportunity. Find it and use it. It may involve a new strategy, but you are getting there anyway.

5) Take the attitude that every issue has a solution. A problem is only a problem if you think you can’t and therefore you won’t solve it. As Henry Ford once said, “Whether you think you can or you think you can’t, either way you’re right.”

The items above are some of the ways to strengthen your persistence and perseverance. As you strengthen your ability to never give up and never give in you will come closer, step-by-step, to achieving the goal of becoming a consistently successful trader. Also, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”