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9/4/2026 - We can learn so much about mastering our trading psychology by studying those who have already achieved such mastery. Study the masters and you will learn about mastery.
Market Wizard Mark Minervini writes "Those who choose to win seek successful role models, develop a road map for success, and accept setbacks as valuable teachers. They put a plan into action, learn from their results, and make adjustments until they achieve victory...Champions don't leave greatness to chance. They decide that they are going to be winners, and they live each day with that goal in focus" (Think and Trade Like a Champion, 2017, p. 3).
Again and again in the accounts of the Market Wizards we encounter the idea that thinking like a champion precedes trading like a champion. This is much more than eliminating negative thinking; it is living each day in a champion mindset. In Market Wizards: The Next Generation by Jack Schwager and George Coyle, Wizard Lance Breitstein described his attitude when joining the trading firm Trillium: "I wasn't confident that I would succeed, but I was highly confident that I would outwork everyone at that firm. That was the only thing that I had no doubt about" (p. 42). Speaking of her training to eventually win a bodybuilding contest, Wizard Linda Raschke explains, "To start, there must be a robust methodology used to build a foundation, and this has to be applied CONSISTENTLY" (Trading Sardines, 2018, p. 197).
What we learn from studying successful traders is that success is a function of commitment. Before Olympians become champions, they must be wholly committed to winning their medals--and then bring that commitment to each day's preparation. Dr. Ari Kiev, in The Mental Strategies of Top Traders (2010), quotes the Scottish Himalayan expedition leader W. H. Murray: "...the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred...Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it" (p. 29).
Extraordinary success begins with extraordinary commitment.
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9/3/2026 - In her book Trading Sardines, Market Wizard Linda Raschke points out that "Traders are always looking for the secrets. Strategies, indicators, algorithms, anything to make money. Most do not recognize the hard work it takes to do research and development" (p. 304). During her development "all lessons were learned the hard way" (p. 52). She succeeded in part because she had learned the discipline to play the piano for hours a day from childhood through adulthood. Piano mastery required the ability to practice, practice, practice and work on the execution of each chord, each phrase. That same mastery process--and that intense drive for mastery--is what we see among those who sustain success in markets. Later in life, Raschke decided to take up bodybuilding and intensively worked on exercise and diet to eventually win a competition. She had mastered the process of mastery.
Only a vision of success and a passion for self-improvement can sustain the efforts needed for elite performance in the markets. The most powerful technique for mastering our trading psychology is the ability to tap into a personal vision that so speaks to you that it organizes your life and your efforts. When every setback is a step forward in learning and mastery, then even losses can give us energy. Great competitors love to compete, they love to win, but most of all they have a passionate drive for self-improvement.
What do you want to do well? Really well? So well, that you're willing to go all in to reach your goals?
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9/2/2026 - Our reactions to markets are a function of our self-talk. How we process market events determines how we respond to them. If we process a losing trade by criticizing and blaming ourselves, of course we'll feel like a loser. If we process a winning trade by puffing ourselves up, of course we'll take too much risk going forward. If we process a quiet, low-volatility market as boring and a threat to our desire to make money, of course we'll overtrade.
Every practice trading session in which we review/replay markets is an opportunity to rehearse the right kind of self-talk. For the successful trader, that self-talk is about the market and the patterns showing up in market movement. Every market tells a story...we look at how markets are moving together or separately and we can detect themes. Understanding those themes points us to promising trades. When our self-talk is about those themes, we reinforce a sense of mastery.
A racecar driver needs to focus on the surrounding cars and the state of his automobile to know when to pass, when to slow down, when to make a pit stop, etc. If the racecar driver is filled with thoughts and feelings of winning and losing, the distraction will inevitably lead to poor decisions. How we talk to ourselves shapes how we feel about what we do--and ultimately what we do.
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9/1/2026 - Dr. Ari Kiev, in his book Trading to Win, points out that "When you trade from commitment--and do what you said you would do--you generate an extraordinary amount of energy. You begin to see opportunities in the market that you couldn't see earlier" (p. 18). He also explains that "Commitment to a specific objective is the most critical dimension of trading to win since it provides more of the focus and energy than any other single factor" (p. 94).
Notice that Dr. Kiev talks about goals in terms of "commitments". A goal is not just something we write down and hope for. It is the north star of all our performance efforts, because it is our "focus". Having that positive focus allows our commitment to give us energy. A goal is meaningless if it is not inspiring.
An alcoholic may express the desire and intention to no drink, but when he hits bottom and sees that he *must* change, then his intention becomes a commitment. In the AA world, such a person may commit to 90 meetings in 90 days, building a community around the commitment and creating a daily focus. Dr. Kiev points out that goals that are commitments are what inspires and guides Olympic athletes: every workout becomes a step in the realization of an ideal.
Many traders focus on how much money they want to make, how they want to control their emotions, how they want to find the next big move in markets--but they lack an overarching vision of the future. That vision has to be lived out each day to bring it to reality and to energize our efforts even in the face of a drawdown. Dr. Kiev teaches that "You create the future by speaking it and then living in terms of what you said...you create yourself by committing to a vision and then becoming the living embodiment of that vision" (p. 247).
The ideal trading psychology is visionary *and* living that vision each day.
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8/31/2026 - Stress and anxiety are responses to perceived threat. Our bodies are mobilizing in their "flight or fight" mode to cope with the danger that we sense. Once we're in that fight or flight mode, blood flow shifts from our frontal cortex (our brain regions of thinking/reasoning) to our motor regions (mobilizing our response to threat). If it ever seems as though you do things in the heat of the moment that you would normally never do, this is the reason why. Quite literally, you're not in your right mind!
This is why it's essential to work on our trading in ways that do not trigger perceptions of threat. If we take risk before we've properly trained ourselves or if we take more risk that we can truly absorb, then we will experience stress and anxiety as normal, natural responses to the perceived danger. Learning trading and making all our mistakes when we're taking minimal risk--and while we're focused (see yesterday's post)--trains us to maintain our best problem-solving when we most need it.
Once we enter that fight or flight mode, the best thing we can do is pull back from the screens and return our mindsets to their proper focus. The rule here is to only engage markets when we are able to process information optimally. A best practice of taking time outs and using that time to calm ourselves with deep, rhythmical breathing--and then returning to markets with modest risk can be cultivated into a habit pattern. "Above all else, do no harm" is the physician's creed. The goal is not to trade. It's to trade when we perceive opportunity--and when we're in a proper mindset to pounce on that opportunity!
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8/30/2026 - Many traders identify emotion as the key enemy to trading success. Emotion, however, is just one manifestation of a larger trading challenge: focus. Successful traders are able to achieve a laser focus on markets--and they are able to sustain that focus throughout their trading. Building our capacity for focus is one of the most important things we can do to achieve trading success.
When we are fully focused, we see more in markets. We see more detail, and we see more context. In an earlier post, I distinguished three facets of focus: 1) intensity of focus; 2) flexibility of focus; and 3) sustainability of focus. In other words, we want to zoom in on what is important, shift our attention to view the context of what is important, and maintain this process without undue distraction. Many, many times, emotional disruptions of trading occur when we first lose our concentration. The emotions are the result of the problem, not the primary problem themselves.
It is better to trade only part of the trading day with full focus than attempt to trade the entire day with distractions. Indeed, we build our focus muscles when we practice trading and review and replay market action. As I point out in the Positive Trading Psychology book, we can monitor our heart rate and brain waves in real time to actually see how calm and focused we are. We can also practice meditative techniques with these same monitors to directly work on achieving and sustaining focus. Indeed, performing meditation prior to market sessions is a great way to prepare ourselves for the trading day.
Focus is our magnifying glass. We can turn every trading session and every review into an exercise in sustained concentration. Our great trading enemy is not emotion. It is distraction.
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In his book Best Loser Wins, Tom Hougaard points out that "An elite soldier is scared to death the first time he is in a combat situation. That is why his first combat situation will be a simulation. And the next one. And the next one. And little by little, his fear is trained out of him, through the use of repetition, breathing awareness, and habituation" (p. 37).
We start by trading in simulation mode or very small. We lose. We jump at the opportunity to learn from the loss: learn how to better enter and exit, how to better identify opportunities. We lose again. We again jump at the opportunity. As we start to win, we get a little bigger. We lose. We delve into learning from the losses. Again and again. Soon, as Hougaard notes, our fear is trained out of us. It's not that we're confident that each trade will be a winner. We're confident that our development will win even when we lose. We know that our development will win *because* of what we will do when we lose. Turning losses into learning is perhaps the most important trading psychology technique. The intensity and repetition of our learning is directly responsible for its impact on our mindset.
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