The Key to Trading Success: A Growth Mindset
Rowan Crosby • 2 min read
There is no doubt that trading is challenging. You are challenged each day and generally speaking during each trade.
No matter what you do, you are always making mistakes.
Half the time, you enter a trade and it goes against you so you are wrong. The other half of the time, you enter a trade and it goes your way so you exit at a profit – only to watch price keep on going. So you were wrong again.
How do you keep on getting up in the morning when you know you are always going to be wrong?
The key is mindset.
Interestingly all mindsets are not created equal. There are two main types of ways of thinking according to popular research.
There are those people that have a fixed mindset and those that have a growth mindset. The difference between the two will likely determine your success or failure in trading.
Firstly you need to ask yourself this question. Is your IQ fixed or can you improve your level of intelligence?
Many people believe that what you are born with is all that you are ever going to be capable of. These are people who have a fixed mindset. They are driven by being right and proving how smart they are.
Then there is the other type of person, those with a growth mindset. They believe that you can always get smarter and you can learn anything. Your IQ is just a number at a point in time and that can change with practice an effort. They are not concerned about the results of a test as that is simply a starting point for which they can build on.
Can you see any parallels in trading?
If you judge your own intellect or success in life by your trading results on a given day, then you are going to have a tough time as a trader. If you feel you can’t improve, then when you hit a hurdle or a rough patch, those with a fixed mindset will likely quit as they believe they are not able to do it. Or they are not ‘naturals’.
To succeed in trading you will need to improve every single day. Not by much, but it needs to be a constant process.
You also need to believe that you can improve and that’s what a growth mindset is.
All great traders were not born great traders or great risk takers or great analysts. They developed these skills over years with constant practice and effort. They all have a growth mindset, where they are open to learn and use their mistakes as fuel to improve.
The good thing is if you are coming from a place where you feel your mindset is fixed, then changing your outlook might be the most important thing you can do.
Believe firstly that you can improve every day with effort and hard work and you will be well on your way to success.