When newbies first come to trading they have often have in the back of their mind that trading will save them from whatever fate life may have in store for them or that it will somehow compensate for past failures. Unfortunately, the traits that make people successful are universal. People who are successful in one area tend to be successful in others simply as a function of their personality – their basic software drives them to be successful. This fact was brought home to me when I was cleaning out my Evernote folder of the junk it tends to accumulate and I came a cross a study titled Perceptions of the Contribution of Psychology to Success in Elite Kickboxing (J Sports Sci Med. 2006 Jul; 5(CSSI): 99–107.). This study looked at the psychological components that were common place in successful combat athletes. They found seven mental skills that they believed were linked to success.
- Effective self-talk
- Heightened concentration
- Self-regulation of arousal
- Goal setting
- Coping with being hit
Acting as a bedrock for these traits were three psychological characteristics – high self- efficacy, high motivation and mental toughness. Within the world of trading mental toughness is required simply to deal with the day to day grind that the business entails. New traders often imagine a glamorous world that is filled with the excitement of constant decision making. Unfortunately, they have been indoctrinated by popular images of what others think that is as opposed to what it actually is.
Trading is a production line – all of life is a production line, even for extremely successful people. It is the ability cope with this grind that sets successful people apart from the non successful. This separation is not limited to professional success. For example there is a saying in weight lifting that going to the gym for an hour a day is easy – controlling what you put in your mouth for the next 23 hours is near impossible for most.
Discipline is designed to defeat the mental fatigue that comes about from simply grinding away each day, some people have have – most people dont.