In our latest podcast (click for all episodes) we talked to Mandi Rafsendjani and we went really deep into trading psychology, the mindset and how traders can become successful.
Below the video, I compiled the 9 most insightful take-away messages that I got from talking to Mandi.
1. Fill all your buckets
The best traders lead a balanced life and do not derive their self-worth from trading alone. This will help you push through hard times when your trading results are not what you imagine them to be.
Make sure that you have a supportive social environment, look after your family, surround yourself with people that add positivity to your life. Take care of your health, do sports and fuel your body with good food. Have hobbies, try out new things and explore your interests. Feed your mind with good books, inspiring conversations or challenge your world-view to broaden your horizon.
2. The importance of feedback
The best traders can take feedback. The market will humble you and will give you harsh feedback on a weekly basis. Your coach will have to point out flaws and critique the way you do things.
The average losing trader will usually not be open to feedback and close themselves off.
Pay attention to how you deal with feedback and how it makes you feel when someone/something challenges your way of thinking/doing. You will learn a lot about yourself.
3. Understand your trading method in the market context
Most traders have no connection to their trading strategy and they just view it as a set of abstract rules that they need to follow.
The best traders understand what their trading strategy is trying to accomplish and under which circumstances it works best.
4. Your programming will influence your trading
Our values and beliefs shape the way we engage with the world, how we deal with setbacks, how we think and what drives us.
Our families and the inner social circle is what shaped our beliefs and values and, thus, it’s so important to look back at where we are coming from. Understanding the past, the motives, worries, goals and ideals of our parents/family will help you understand why you have been raised in that specific way. This will also help you understand yourself on a much deeper level once you understand why/how you react to specific circumstances the way you do.
5. Just because you read it in a book, it doesn’t mean you will be able to execute it
Reading books is important but without applying the knowledge, it’s pointless.
You can read about the importance of cutting losses and letting winners run all day long but if you do not experience it in your own trading, it won’t matter. And it won’t become a part of you.
6. Successful traders think strategically / solution-focused
When faced with a problem or an obstacle, do you complain or blame someone/something else? Or do you roll up your sleeves and look for solutions?
When confronted with a problem, the best traders ask themselves: how do I fix this?
The average trader says: Why does this happen to me?
Always look for a solution instead of trying to put the blame on someone/something else. The problem won’t just go away.
7. The best traders can recover quickly
The best traders are not trading without emotions and they experience all emotions. But what’s different is that they will pick themselves up quickly and (as we discussed in point 6), look for a solution right away.
Thus, don’t be too hard on yourself when you screw up – it will happen. But recognize that it’s up to you to turn things around.
Take full responsibility for everything that happens.
8. Know your strengths/weaknesses and leverage it
What are you good at and what are you not so good at?
Are you creative and like to test new ideas and explore how you can tweak your strategy in different ways to improve your edge?
Or are you an analytical person and work best with rigid rules, frameworks and a fixed routine?
Don’t try to blindly copy another person just because you see some level of success. Every person is unique.
9. The importance of the growth mindset
In our podcast with Dr. Steenbarger, he said that the number one predictor for success is curiosity.
And as Mandi rightfully pointed out, curiosity and the growth mindset go hand in hand.
Try out new things, get back into the beginner mindset and experience how you can get better at a new skill.