Introduction

The journey to becoming a successful trader is a journey of personal development, a journey that encounters the impact of our beliefs and how they shape our mindset and ultimately our whole lives. Technical analysis is such a small part of trading that it can be learned within 3-6 months. The biggest part of trading is of course psychology, but more specifically the set of beliefs that make up our mindset, and how this mindset controls the way we react, behave, think and feel during any given event. So it begs the question, why do we spend so much of our time trying to perfect our technical game, and so little time working on our psychological game? In this blog we’ll talk about beliefs and how they shape our mindset, and how you can change the negative beliefs and instill positive ones in their place to Master your Mindset! 

Mindset is a collection of beliefs

Our mindset is a collection of beliefs, thoughts, perceptions and attitudes that we hold about different aspects of life, such as ourselves, our family, trading, money, animals, cars, violence, confidence etc. At the heart of every action that we take lies a belief. So whenever we’re presented with any kind of information, we perceive that information or react to that information based on our mindset, or based on our beliefs and perceptions that we already hold around that subject. So you could say that our beliefs are the lenses through which we perceive and interact with the world. If you have positive beliefs, they will propel you towards success, but if you hold negative beliefs then they will inevitably hold you back. Your mindset, this collection of attitudes and beliefs that you hold, plays such a crucial role in determining the course of your trading career. 

“You do not trade the markets. You can only trade your beliefs about the markets.”

Dr. Van K. Tharp

The decisions we make are based on the beliefs that we hold. This is such an important concept that you should understand because what this means is that your trading performance is a reflection of your thoughts and beliefs. Your trading performance is a reflection of your mindset.

Limiting Vs Empowering Beliefs

Broadly speaking, your beliefs can be categorized into two types; limiting and empowering. Limiting beliefs act as barriers that prevent you from making progress and achieving your goals. These beliefs often come from a place of fear or negativity, and they stem from our past experiences and upbringing, or societal conditioning.

On the other hand, empowering beliefs are ones that give us confidence in our abilities, they help us to be more resilient, and they make us feel like we can accomplish anything we set our minds to. These beliefs are the driving force behind our accomplishments, and they push us to overcome set backs and challenges and embrace new opportunities.

Recognizing and addressing our limiting beliefs is at the heart of Mastering our Mindset and achieving success in trading, as well as success in other areas of our lives.

New Mindset = New Results

As traders, once you’ve found a strategy that you like and it’s profitable, you need to stop focusing so much on technical analysis, because that’s not the reason that you’re not seeing results. The only thing you are doing is wasting time in search of the holy grail, but it doesn’t exist! Once you are happy with your strategy, you need to start focusing the majority of your time and attention on building the right mindset that will ensure your long term success in trading. So let’s discuss how you can begin to change your beliefs and ultimately your mindset.

1: Awareness

The first step, when trying to fix something, is always to identify and become aware of the problem. You need to identify the beliefs that you hold around trading and money. So get out a pen and paper, and start listing all the negative and limiting beliefs you have that are holding you back. Start with sentences like “Trading is…”, “Money is…”, “I want to…”, “I don’t want to…”, “I am…”, “I am not…”, “Winning is…”, “Losing is…”, and then just finish these sentences with as many limiting beliefs that you can think of.

2: Reasoning

The next step is to go through each limiting belief and try to figure out where this belief comes from and why you believe it. A common belief among most people is that “losing is bad”. So let’s use this belief as an example and go through the reasoning process.

• First we need to ask why do I hold this belief? Well, it’s probably there to protect me, because in almost every other area of life, losing is seen and negative and unfavorable. 
• Now ask yourself how this belief is holding you back in trading? Obviously, if I can’t accept losses then I am doomed because losses are a part of the game in trading. Also, multiple losses are preventing me from sticking to my trading plan and making me do dumb sh*t.

Go through this type of thought process for every one of your limiting beliefs, and write down your reasoning for why you hold that belief and how it’s holding you back.

3: Change

The next step is to swap out those limiting beliefs for ones that would be more useful to you as a trader. So in the example above, a more useful belief would be that “losses are part of the game” or “my strategy has a 60% win rate , so I will always have 40% losing trades and every losing trade is just part of that probability. Write these new beliefs down in a column next to your limiting beliefs.

4: Ingrain

The final stage pf the process is to ingrain these new beliefs into your mind so that they become cemented and they become your new way of thinking. 

The way to do this is to take 10 minutes every morning and just imagine yourself trading with these new beliefs. Imagine yourself taking a loss but your new belief is that losses are a part of trading, and because you believe this, you are not frustrated by the loss, you continue with your day without letting it affect you.

This process will take weeks and even months before you truly start believing, but if you keep practising, it will eventually become hard-wired into your brain and it will change your mindset and you will start to act and behave differently, in a way that drives you towards your goals instead of holding you back. 

Once you have followed this process and changed your beliefs around trading, try to figure out other areas of your life which also have an impact on your trading, such as confidence, discipline etc. and repeat the process to change your beliefs in those areas and slowly you will completely rebuild your mindset. 

Real Life Success Story

Throughout history, the highest achiever have demonstrated the power of beliefs on mindset and success. My favourite example of this is of a man named Francis Ngannou, who is a Cameroonian born MMA fighter. His story is a testament to the power of beliefs and mindset in helping to achieve goals. He grew up in extreme poverty, having to shovel sand from the age of 10 to earn money to feed himself. He travelled from Cameroon to France as an immigrant, in his twenties, almost dying multiple times throughout the journey. Despite the hardship and set backs, he had a vision to become the Heavyweight Champion of the World, and it was this vision and his unshakeable determination and self-belief that allowed him to achieve his dream when he became the UFC Heavyweight Champion of the World. Francis Ngannou transformed his life story from one of adversity to a story of inspiration, showing the incredible heights that can be achieved when empowering beliefs are harnessed to shape a powerful mindset.

Conclusion

Your beliefs shape your mindset, and they have a direct impact on your success. If you embrace a positive and growth mindset, you are far more likely to set yourselves more ambitious goals, you are more likely to persevere in the face of set backs and challenges, and you are far more likely to achieve those ambitious goals. 

Mastering your Mindset by changing your beliefs is going to be a difficult and ongoing journey, but it has the potential to completely change the trajectory of your life and put you in control of where you are going.