Staying Within Yourself - Trading Mindset

Trading/investing, like any job or hobby in life takes skill, experience, preparation and patience to be successful. Learning to adapt, being flexible and making adjustments are also necessary. But there is also introspection, or knowing thyself. With wealth and riches unlimited (if done right) we are too often focused on the prize rather than the process and steps to get there.  Ask yourself this question:  Am I willing to do whatever it takes to be a successful trader/investor for the long haul?

 

I recently had a small epiphany come through my recent trading.  My results were not good, but my view of the markets and trading were actually very sharp.  I just could not execute well, and was suffering under my own inability to get in sync with the market trend.  Now, my approach for most of 2022 has been from the bearish side, that is no secret.  Let's remember, bear markets are not common, and when recognized you have to tread carefully.  In most bear markets, the bulls and bears both get hurt badly.  

 

I was amiss.  How could I be on the right side of the market, at least in my mind and not be making good money?  I struggled to understand this, but soon realized that I was using the wrong style of trade each day.  What do I mean?  Simply put, using a bullish trade style with a bear market playbook.  Remember, in a bull market you can stay with trades longer, and if you make an error or lose on a trade the bull market will offer you a chance at redemption.  Just stay with the trade longer, and if you're getting a good read on the charts everything will work out right in the end.  

 

So, my next move was to adjust my timeframe of trades.  I would take profits sooner, give myself more time on trades and size my normal trades even smaller than usual.  Those small tweaks actually worked out perfectly.  I am still reading the markets correctly (our EO options service was up 12% in September, the SPX 500 was down 10%) and those adjustments gave me more freedom and flexibility.  I had a tremendous month of September.

 

No longer waiting and hoping a trade moves in my favor, but being more proactive and taking control - booking smaller but more wins, keeping a tight leash on the losses.  Take my advice, understand yourself better and your results will prove that out to be correct.