What can a trader do (really do) to optimize their mind for trading? Is it “plan the trade, trade the plan”? Is it “control their emotions”? Is it something else?

Here’s what works.

  1. Realize that like professional sports, trading is a performance discipline.
  2. #1 means that the interaction of body, mind and “spirit” IS the place to focus to improve performance.
  3. #2 means that the simple things like sleep, exercise, breaks and purposeful sensory input (like NOT using red on your screens) can make a difference in your risk and trade perception.
  4. With the foundation of #3, good physical energy underlying (for lack of a better term) a good mood, one can work with the mind and the spirit.
  5. Commit to the reality that emotions in their pure form are informational.
  6. #5 demands study – self-study.
  7. #5 also means that the dictum should be “control your actions”. The fallacy of control your emotions only comes from the mis-merging of the idea that emotions automatically lead to action which is simply untrue. (It is true when one is not dealing with emotions as information).
  8. Accept that the fear of missing out or the fear of future regret will always be operating in your trading mind. Resolve to always be aware of whatever quantity of that feeling is present.
  9. If FOMO or any other feeling is detectable, verbalize it. Yes! Say “I am afraid I will miss out, I am afraid that I will miss this opportunity, I am afraid the other traders will get me”. The latest research is showing how powerful the tool of unedited articulation is.
  10. Learn how the feelings your trades create in turn echo whatever feelings you had growing up. This is a fractal phenomenon just like a fractal in geometry. There is a small pattern from your history that is now repeated and scaled in response to the difficulty of dealing in a relentlessly uncertain and dangerous arena.
  11. Repeat #9 and add “just like when _______ happened in 6th grade” (or whatever your iconic growing up story is).
  12. Find yourself with more ability to cut losers when you know you should, listen to your intuition (or unconscious pattern recognition) and more able to get in touch with the crowd movements in price.