Trading Mindset - The Mental Battle In Crypto Futures Trading

By Augusto Novoa, Finanflix. 

Before going to war, one should prepare himself. I see the crypto markets, especially futures, as a psychological battlefield. Anyone can make money during bull markets but to be able to carry on during bear markets, with their harsh volatility, blown stop losses and random price action requires a different type of preparation. 

Trading isn’t about winning and making money every time with every decision you make as the majority thinks. It’s about conserving the money you have made and limiting the losses as much as you can with proper money management techniques. 

That requires an elite level of mental stability one should develop if the urge to trade crypto futures is stronger than oneself. 

The ability to make quick decisions based on random price action is an art by itself. An art that takes time to master. An art where determination takes the lead. You have to be able to lose your conception of “losing” if the trading plan was executed correctly. Every trading plan has different amounts of expected losses (win rate). The quantity of wins or losses in a strategy has nothing to do with the amount of money one can make trading the markets. You can have a low win rate, as I do myself (20%), and still, be able to make money. But getting used to losing and patiently waiting for the winner isn’t in everyone's mind. 

So it seems that you, as a trader, need to develop the proper mindset to get used to losing without letting that natural aspect of trading ruin your day, your date, your self-esteem, and your confidence. Just because you will need them for tomorrow’s fight. That tiny gap between a losing streak and the correct execution is filled by the development of the mental discipline.

Woody Allen says 80% of success is showing up. I agree. Showing up the next day is difficult if you didn’t develop some kind of inner strength greater than any bullet that the future market can throw at you. So, I think that’s one reason there are so few that are successful in this business or at least develop a way to live off of it. Showing up is an ability itself. Showing up after losing inherently requires some type of specific persistence needed to overcome that natural mental block created by our deeply ingrained perception of losing. This perception of losing must be adapted in order to survive by adopting a probability viewpoint.  

“A trader knows his numbers”. He should know pretty clearly how much he can handle. 

So, for this, many traders use different kinds of techniques. If they want to survive the rollercoaster, they have to study themselves and write down from the first trade they make whatever is going on in their heads and body. I teach my soldiers (Trade students) not to focus on profits for the first 6 months of their trading career but to focus on proper execution and the effects losses and wins have on their life and on the next trade. There’s a need to rewire our brains. 

There is some specific knowledge one should acquire that includes the mental ability to overcome any obstacle the market throws at you. Therefore the strength of not exposing oneself to those dangers in the look for quick profits or the thrill of being in a trade. Sensation seeking is another thing a futures trader must detect in his own mind in order to not be a slave to it.

Once the trader integrates the proper mindset, the right technical weapons that fit him, and the true importance of money management techniques, it is important for him to sustain the mental standards with the correct belief system, in order to properly execute the next trade. That could be attained by self-hypnosis techniques, NLP, the repetition of the thoughts that are useful to him when trading, while at the same time, consciously disregarding the thoughts that aren’t. Entering the crypto futures markets is entering a highly trained metahumans mental battlefield where you will find the need to upgrade on every weakness you find. For me, this unique psychological challenge is what makes trading a self-mastery business.