IRON MINDSET A Guide To Building Your Trading Mindset by MONEY TRADE EDGE

110 Pages·2021·1.786 MB·English

by  Money Trade Edge

IRON MINDSET
A Guide To Building
Your Trading Mindset
by
MONEY TRADE EDGE
Iron mindset
Table of contents
1. TRADING........................................................................................................................................4
Participants.......................................................................................................................................4
Business...........................................................................................................................................5
Advantages and disadvantages........................................................................................................6
2. THE BIGGEST TRADING TRAP.................................................................................................11
Trading is a journey.......................................................................................................................15
3. WHAT IS TRADING SUCCESS?.................................................................................................17
4. TRADING TOOLS........................................................................................................................20
5. SYSTEM CREATION....................................................................................................................21
Find an edge...................................................................................................................................22
Test your edge................................................................................................................................23
Execute your edge..........................................................................................................................24
How to control your emotions while building your system...........................................................26
Misconceptions about trading........................................................................................................29
6. RISK...............................................................................................................................................31
Risk vs money................................................................................................................................32
Think in probabilities.....................................................................................................................35
7. EXECUTION.................................................................................................................................39
Analysis vs Trading.......................................................................................................................40
Practice through action..................................................................................................................41
Follow your trading rules...............................................................................................................42
100% focus on your system...........................................................................................................43
8. MINDSET......................................................................................................................................44
Trading vs any other business........................................................................................................44
Win 1 month vs Win 10 years........................................................................................................46
Consistency vs Perfection..............................................................................................................47
Long term vs Short term................................................................................................................47
You vs You / You vs The market....................................................................................................48
Process mindset vs Lottery mindset...............................................................................................50
Theory vs Practice.........................................................................................................................52
9. BUILD AN IRON MINDSET........................................................................................................54
10. SELF-DISCIPLINE......................................................................................................................57
How to develop self-discipline......................................................................................................57
11. CONSISTENCY...........................................................................................................................65
How to develop consistency..........................................................................................................65
12. CONFIDENCE.............................................................................................................................70
How to increase confidence in your trading system......................................................................72
How to increase confidence in yourself.........................................................................................80
13. FOCUS.........................................................................................................................................85
How to increase your focus...........................................................................................................86
14. RESILIENCE...............................................................................................................................90
How to develop resilience..............................................................................................................91
15. PATIENCE....................................................................................................................................96
How to develop patience..............................................................................................................100
16. INTERCONNECTION..............................................................................................................104
17. MATURITY...............................................................................................................................106
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No part of this guide may be reproduced, displayed, modified, or distributed without
the permission of the publisher.
Copyright © 2021 Money Trade Edge
All Rights Reserved.
Published by Money Trade Edge
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INTRODUCTION
Thank you for investing in this guide. You are probably not successful yet and you
want to improve your mindset but you don't know where to start. If you have any
doubts or questions, don't hesitate to contact me.
Many traders spend months and years, switching from trading system to another,
losing money consistently, without realizing that the main focus should not be to find
the perfect trading system, but rather to develop a good mindset to raise the level of
their trading.
Instead, they keep trying every possible indicator without real long-term progress.
Every person who starts trading has a desire to earn a large amount of money, but you
have to understand that you don't need just a trading system to be successful, but you
need to know how to execute your system, how to manage risk, how to manage your
emotions, etc.
Just think about it. If trading were so easy, then every trader would be a millionaire.
Disclaimer: Trading is an activity where 80% / 90% of traders lose money. Many
variables decide your future. The emotions, the risk and all the trades you take
depend on yourself and your mind.
This is a guide based on what worked for me and what worked for other traders.
Success is not guaranteed just by reading this guide.
I'm not responsible for your trades and for your results. You are the only one
responsible for your trades and your result.
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1. TRADING
The world of trading is completely different from any other business. You understand
this from day 1, when you open a chart and see different markets rising and falling
through bars or candlesticks.
Then you start discovering magic indicators such as moving averages or every
possible oscillator available and you are amazed at how simple it is to predict future
markets movements with these tools.
Obviously, trading is much more than that. You don't immediately become successful
after using a few fancy indicators here and there. There is so much more. But you
will eventually find out too, if you are willing to show up for long enough to become
a successful trader.
However, the possibility of making money (potentially a lot of money) with just a
few clicks and only with a computer plus an internet connection is one of the reasons
why many people decide to start their journey.
Participants
What people usually don't realize is the fact that the market is made up of a huge
amount of traders. Huge means that every retail trader is simply a tiny insignificant
speck in a big environment.
In the trading market, every day, some traders make money and some traders lose
money, simply because it is a zero-sum business. But that shouldn't bother you
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because you are just a tiny speck, so there is an unlimited source of money available
for you.
Every trader has a different system, a different way to trade, different ideas and a
different mindset.
Two traders can win the same trade with a completely different system.
Two traders can win and lose the same trade with the same system.
In fact, to succeed in trading it's not a matter of finding the best trading system, but
rather about developing the best trading mindset.
Don't get me wrong, a trading system is very important. It's your weapon to fight in
the market, it's your tool to win trades, but at the end of the day the most important
thing is how you execute your trading system and your execution depends solely on
your mindset.
All of this to say that your mindset determines your trading success. There are many
successful trading systems. Some are more profitable than others. But there are
different paths to becoming a successful trader. There isn't just one. There is no magic
formula.
Business
One of the biggest mistakes new traders do is thinking that trading works like a
lottery.
People outside of trading talk about trading using words like "gambling", "playing",
"luck", etc.
So, there is this common thought that trading is like going to the casino to play the
roulette.
Sure, many people approach trading in the wrong way, risking a huge amount of
money without the proper skills and without a proper strategy, but that doesn't mean
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every trader approaches the business the same wrong way.
Just think of any business. Do people start a business knowing nothing and taking
stupid risks hoping to get lucky? Maybe some people do, but they eventually break
down in the long-term.
Trading is the same. You need to develop skills. You have to build a profitable
system. You need to build a solid strategy. Some people need 1 year, some people
need 3 years, some people need 5 years, etc.
The sooner you understand that trading is a business and that there is no magic
system to be successful, the sooner you start building the foundation necessary to
become a profitable trader.
Advantages and disadvantages
Trading has many unique benefits that push people to start their trading career, but it
also has several downsides that traders don't take into consideration.
Let's start by analyzing the benefits first.
If you become a successful trader you could:
• Trade where you want
• Trade when you want
• Working without a boss
• Working without clients
• Compound your money like no other business in the world
You can trade wherever and whenever you want because you only need a computer
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and an internet connection.
Many people may disagree with this, but they probably don't know what they are
talking about.
With just one PC you could trade one month in Europe, one month in America and
one month in Asia. Of course if you need 10 screens to trade, everything gets more
complicated.
Working without a boss and clients is quite intuitive. If you are an independent trader
you are your own boss and have no clients to respond to. In simple words, you
manage your work. If you want to work 16 hours a day you will work 16 hours a day.
If you want to work 1 hour a day, you will work 1 hour a day.
In the long term, no activity equals the compound effect of trading. In fact, there is a
double compound effect, on your money and on your skills.
The compound effect on your money is quite intuitive. While in trading you
consistently make money, compounding month after month your money, in other
businesses your earnings do not increase exponentially.
Without taking in consideration the average 9-5 job, just think of a restaurant.
Month after month, the owner of a restaurant earns roughly the same amount of
money. The owner can increase the gains through expanding the restaurant, hiring
new workers, acquiring more clients, raising prices, etc. But the earnings will never
increase as exponentially as in trading.
The compound effect on your skills may be more difficult to understand. This is why
many traders quickly give up in 6-12 months if they don't see results.
Day after day, you practice, work hard, build skills. You may not see the results of
your work in 1 day, 1 week, 1 month, but if you are consistent, suddenly you will see
aha moments in 2-4 years.
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You can lose, you can make mistakes, you can fail, but in the meantime you gain
experience.
To make you understand the compound effect on your skills, just think about the
owner of a business hiring new workers. The owner invests time and money to train
the new workers. In fact, the higher the level of the worker, the greater the benefits
for the company. But what if after 3-4-5-6 years a worker decides to leave? The
owner must find a new replacement, starting over from a basic level, investing more
money and more time to train the replacement.
As a trader, you don't leave. Unless you decide to give up, but that's another topic.
You invest money and time on yourself and you develop your skills day in day out.
Your level starts at 0 and increases day by day.
The level of workers in a company can go from 0 to 100 really quickly, but new
workers periodically lower the level.
Let's take a look on the downsides of trading.
In the process of becoming a successful trader you could:
• Suffer loneliness
• Have emotional breakdowns/pain
• Be demotivated by overcoming the learning curve
• Spend a long time without earning money
Loneliness is one of the biggest problems in trading. If it takes 3-5 years to become a
successful trader, a new trader will take 3-5 years of training, practice, working alone
rather than with other people like 99% of average jobs.
By the way, you are not alone, you are with your thoughts, emotions, ego, etc. And
this could be a good or bad thing.
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By living with your emotions, you can learn how to deal with them, how to master
them, becoming a stronger person, not only in trading, but also in life. Indeed, when
you learn how to master your own emotions, you become limitless. You gain
confidence, discipline, self-belief and you live your life without fear.
On the other hand, spending all this time alone with your thoughts can drive you
crazy. That's why groups like trading communities are always helpful.
Emotional pain and emotional breakdowns are the real tests of trading.
The human mind is capable of making / destroying your future. Most traders who
start trading risk a lot of money without taking in consideration the consequences of
their actions. When you start losing money, your mind starts getting hurt. The more
you lose the more you get hurt, until an unexpected event like a catastrophic loss or
blowing up your trading account hurts you so much that you can no longer trade.
Many traders start strong but then they disappear shortly thereafter.
Trading is a highly competitive business in which only 5-10% of people eventually
succeed. So you can understand that to achieve the highest level you need a lot of
training and experience. You definitely can't be successful in 90 days.
The more months that go by once you start trading, the more chance you have of
giving up because you don't any see improvement. In fact, traders' motivation
decreases over time if they don't see results, until sooner or later they decide to quit.
Money is probably the main trading problem.
Many people start trading because they are attracted to money. They think trading is
like a lottery, where you just need a magic formula to turn $ 200 into $ 2.000.0000 in
2 months.
They are very motivated in the beginning, they want to become a millionaire, they
dream of being super rich and they start working hard with the main goal of earning
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