The Psychology Of Trading – Stay Positive

In general I’m not really much for the whole “self-help movement” and all that stuff about “channeling” and “finding your spirit guide”. For the most part I’ve been far too busy working my ass off my entire life, to have stopped  and spent too much time “hoping for a miracle” or “rubbing some crystal”.

But I must say…for those that do find it beneficial  – “if it ain’t broken why fix it right”?

When it comes to trading though, I have learned that one must do everything in their power to stay positive and continue to move forward at any cost – as it’s those first few years that will break your spirit….and in turn your account.

As opposed to looking for “answers from above” I’ve found it helpful to read / and at times “re read” motivational anecdotes from some of the worlds most highly respected thinkers, visionaries and pioneers. In a sense “putting myself in their shoes” with the knowledge of what great obstacles they’ve overcome – and in turn the challenges I face.

I might suggest printing a number of these that strike you directly – and keeping them near your terminal for some “quick reference” when things get tough.

• “Obstacles are those frightful things you see when you take your eyes off your goal.” – Henry Ford
• “Only those who will risk going too far can possibly find out how far one can go.” -T.S. Eliot
• “Great spirits have always encountered violent opposition from mediocre minds.” – Albert Einstein
• “Knowing is not enough; we must apply. Willing is not enough; we must do.” – Goethe
• “The best way out is always through.” – Robert Frost
• “When the water starts boiling it is foolish to turn off the heat.” – Nelson Mandela
• “It’s kind of fun to do the impossible.” – Walt Disney
•  “Stay Hungry. Stay Foolish.” – Steve Jobs
• “The distance between insanity and genius is measured only by success.” – Bruce Feirstein
• “I hated every minute of training, but I said, ‘Don’t quit. Suffer now and live the rest of your life as a champion.’ ” – Muhammad Ali
•  “I am always doing that which I cannot do, in order that I may learn how to do it.” – Pablo Picasso
•  “I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.” – G. K. Chesterton

You can find a pile of this stuff on the net, along with tonnes of other material on positive thinking etc, the point being – it’s unlikely that anything else you will choose to do in your life, will present you with the unique challenges trading has to offer.

You MUST stay positive.

 

 

 

 

 

Building Mental Resilience in the Face of Market Volatility

Why Traditional Psychology Fails Traders

The problem with most trading psychology books is they’re written by academics who’ve never had their ass handed to them by a surprise NFP release or watched EUR/USD gap 200 pips against them on a Sunday night. They talk about “managing emotions” like you’re dealing with everyday stress, not the gut-wrenching reality of watching months of progress evaporate in minutes. The forex market doesn’t care about your feelings, your mortgage payment, or your carefully laid plans. It’s a 24-hour beast that feeds on weakness and punishes hesitation.

This is why I gravitate toward wisdom from people who’ve actually been through hell and came out the other side. Henry Ford didn’t just build cars – he revolutionized an entire industry while facing constant ridicule and financial pressure. When you’re staring at a USD/JPY position that’s bleeding red and every fiber of your being wants to close it, remember that Ford’s first company went bankrupt. His second one failed too. The third time? Well, you know how that story ends.

The Compound Effect of Small Mental Victories

Every successful trader I know has a ritual for handling drawdowns, and it’s never about pretending losses don’t hurt. It’s about building systems that help you process the pain and move forward anyway. Keep a trading journal, but not just for your trades – track your mental state too. Note how you felt before entering that GBP/USD position, during the trade, and especially after you closed it. Pattern recognition isn’t just for charts; it’s for your psychological reactions.

The Ali quote about suffering now to live as a champion later hits different when you’re grinding through your third consecutive losing month. Champions in boxing take punishment to deliver punishment. In forex, you take small, controlled losses to capture larger gains. Both require the same mental fortitude – the ability to absorb pain without losing sight of the bigger picture. Muhammad Ali trained when he didn’t want to, fought when he was tired, and pushed through when quitting would have been easier.

Contrarian Thinking in a Crowded Market

That Chesterton quote about doing the opposite of expert advice? Pure gold for forex traders. The market is constantly trying to teach you lessons that sound logical but will destroy your account. “Cut your losses short and let your profits run” – sounds great until you realize most retail traders cut their profits short and let their losses run, doing the exact opposite. When every analyst is screaming about dollar strength, when retail sentiment shows 85% long on EUR/USD, when your Twitter feed is full of bears calling for market collapse – that’s when you need to start thinking like Chesterton.

The herd mentality in forex is more dangerous than in any other market because of the leverage involved. When everyone’s positioned the same way on major pairs like AUD/USD or GBP/JPY, the market makers know exactly where to push price to trigger maximum pain. Einstein’s quote about mediocre minds opposing great spirits? That’s retail traders ridiculing contrarian positions right before major reversals. The crowd isn’t just wrong – they’re aggressively wrong, and they’ll try to pull you down with them.

Practical Applications for Daily Trading

Here’s what I actually do with this philosophy: I keep a rotation of motivational quotes as desktop wallpapers, changing them based on what I’m struggling with. During overconfidence phases, I use Frost’s “the best way out is always through” to remind myself that sustainable success requires grinding through boring, methodical work. When I’m scared to pull the trigger on high-probability setups, Walt Disney’s “it’s kind of fun to do the impossible” reminds me that extraordinary returns require extraordinary courage.

Print out Picasso’s quote about always doing what he cannot do and tape it right next to your stop-loss rules. Every time you’re about to risk more than 2% on a single trade, you’ll see it and remember that learning comes from controlled failure, not reckless gambling. The goal isn’t to avoid all losses – it’s to fail forward, extracting maximum education from every mistake while keeping the tuition payments manageable.