In this post, we’re going to focus on the mindsets and the inner game of trading.
Check out our book Mindsets of a Master Stock Trader that will help you understand the stock market and become a successful trader.
We’re going to take a look at our focus and developing our focus muscle and where we should be focusing on. I find that a lot of traders focus on the wrong thing. And when you focus on the wrong thing, you won’t get the results that you want.
It usually happens in just day-to-day life. If you ever talk amongst a group of guys you might hear something like:
“When you stop focusing on getting the girl, you’ll get the girl.”
It works the same way in stock trading. But let me explain to you why and how this works.
When you look at creating a business, you want to make money. Your thought is to make money. This is what you’re thinking of, and when you focus on cash, and you think about money – the money does not grow!
The thing is when you focus on additional things that create value, that’s how money grows. It’s because of your thinking about the value that money grows.
When you’re thinking about a business, you start thinking about these things:
- how do I get the customer?
- how do I get a sale?
- how do I give them a connection?
- how do I connect with that person?
- what product would they want?
I’m thinking about how I make this business work. And I’m thinking about things that are external to money. The money is the result of me thinking about the value of that business.
But just thinking about money is not going to grow money. Money is the result. It’s the effect of what you’re doing. And that’s because money is not real. It’s the effect of it. Money comes due to the things that you do.
When you think about trading, and you think about money profits, it also doesn’t come to you in that sense. The way that trading profits work is when you start asking yourself is you managing the trade correctly.
This business is a financially based business using capital as working capital, so it is a little different. You do have to think about money, but it’s different. It’s about managing that money and looking at the risk. Ask yourself how is the risk set up and where do you make an adjustment. Or when do you fix the position and when do you have to hedge.
You might be thinking about where’s my stop, the technicals, or the strategy of scaling. When you start thinking about things in that way, that’s when things start to work out. Your focus should be a little more external as weird as it is. And it’s like thinking about how do you get the girl. Well, when you get the girl, it’s because you’re not thinking about getting the girl.
Instead, it ends up happening when you focus on yourself. And when you focus on having fun with your friends and because you’re having fun with your friends you’re creating this attraction personality. You’re creating this attraction for somebody.
That’s how that connection process happens. It’s the same way in trading and in running a business. When you’re thinking about money, and you’re just focused on money, it’s not going to happen.
The main reason is that money is a result. It’s an effect of something. It’s used as a transactional currency. It’s flowing, and it’s always moving.
When you focus on value:
- customers
- sales
- connection
- products
…that’s when these things work out, and that’s when you get money.
In trading, it works the same way. You shouldn’t focus on profits and how much you can make.
You need to focus on:
- managing the trade
- looking at the risk
- how do you fix the position
- how do you scale in and out of the position
- how do you hedge
- where’s the stop
- the technicals
That’s because when you look at those things, then you become more successful. Your focus is in the right spot.
If you’re starting to focus all on profits and losses, you’re focusing on external goals that are outside of your control.
If a stock price is going up or stock prices going down – you can’t control that.
It’s similar to what we talked about in the past called:
- the inner goals
- the outer/external goals
If you have these external goals of getting first place in a gymnastics competition, those are out of your control. Because people are judging you, they’re looking at how you land and those kinds of things. But you can’t control that.
Instead, what you can control is:
- how many times you show up at the gym
- how many runs you do at the house
- how many times you go out running to build up your heart rate
You can control those things. Those are the inner goals.
The key: If you focus on internal things and things that you can focus on – that will eventually lead to those results.
However, the outer external things are a little bit out of your control.
If you didn’t get this or you still struggling a little bit with the mentalities or the inner games, then you might want to check out our book Mindsets of a Master Stock Trader.
