Set Risk – Focus on Possibilities

Where is your head at when you put on a position? Where are you focusing your attention? As traders, when we focus on possibilities, our trading performance improves. We know wherever our mind goes, our reality will eventually follow.

Now, we are not saying as traders, we can mentally make a position go in our favor – that’s ludicrous. What we are saying is, when we focus our attention on the possibility of a trade going in our favor, we take control over our mental state. We allow ourselves to remain in flow with the market. We allow ourselves not to get emotional. We allow ourselves to remain calm in positions.

The one requirement to trade in this state of mind is, process.

We must have a strict trading process that we follow in order to remain focused on the possibilities, not the risk.

Our process will include risk parameters, so therefore, it’s counter-intuitive to focus our attention on the possibility of a position going against us, forcing us to exit the trade with a loss. This should not matter.

Ask yourself this, if you constantly focus on the negative in any situation, does that change the outcome in any way? The answer is no.

Negative things happen in our lives all the time, but to focus on the possibility of negative things happening, makes absolutely no sense. If you’re looking to progress in life, this type of mindset will just hold you back.

Now back to trading.

As most of you know, our mental state plays a vital role in the success as a trader. If your atmosphere is chaotic, chances are your trading will reflect this chaos. If you focus on maintaining a calm atmosphere, then your trading will reflect a more flowing state.

Without a crystal-clear trading process, it’s only a matter of time before risk because overwhelming in every position.

We are risk managers, not traders. That’s what we do, we manage risk for a living. And to manage risk, we must have a process to manage that risk. Obviously, a major aspect of this process will be to exit a position if/when it goes against you. This is pre-determined BEFORE putting on the position, not afterwards – once you’re already in the trade.

Now, we personally never use hard stops, but of course it didn’t start off this way. We do not encourage new traders to use mental stops, as it opens the door to “giving it a bit more room”. You have to earn the right to use mental stops. Prove to yourself that you can remain disciplined in your risk parameters, to take yourself out of a losing trade if/when the trade is clearly telling you that your thesis was incorrect for the current market conditions.

You may not be wrong, just early.

So, take yourself out and wait until it’s time to get back in. There’s no need to wait it out, in hopes of things turning around in your favor. That’s emotional trading and very weak.

So, to bring it all together, build a laser specific trading process with laser specific risk parameters; then focus your attention on the trade moving in your favor. Let your pre-determined risk levels work as you planned for.

Trust The Process.

About The Street Trading

Consistently Profitable.

That's The Goal.

Start with a crystal-clear vision of where you’re headed, then effectively lay the foundation to reach that goal through a systematic process.

That's The Street Trading.

We provide a straight-forward, no-nonsense results-driven trading education, that cuts through the noise to teach new and existing traders on how the stock market truly operates.

Our attention is focused on building actionable knowledge about the markets from the ground up. We construct a foundation of the fundamentals behind consistently profitable trading that you can build a career on. Take the guess work out of trading and ultimately understand what moves the market to finally flow with the Street and Trade with Clarity.

Day Trading | Swing Trading | Position Trading - It all comes down to managing risk and market psychology.

If you’re interested in learning more about what we have to offer you as a trader, come check us out at www.thestreettrading.com

We look forward to joining you on your trading journey!