Developing the right mindset for trading requires a combination of experience and proper risk management. These skills will help you keep calm under pressure and make decisions based on logic rather than emotion during periods of uncertainty. Even the most experienced traders fall victim to emotional decision-making and often have to reduce their risk, take a break, or reevaluate their trading strategy. The stock market is constantly evolving and what worked previously may not be working anymore!

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embrace a growth mindset

Unfortunately, losses are a part of trading but a series of losses can have significant impact on your confidence and self-worth. During these periods, it’s good idea to take a step back, let the emotions dissipate and take sometime to reflect on what you did wrong. These moments often possess the best learning opportunities, and with a growth mindset, you’ll learn from this and quickly recover from these setbacks. Because that’s all it is, a setback. A growth mindset says that anything is possible, that you are destined for success and that you are resilient and can deal with anything.

Pro-tip: Start a trading journal to record all of your trades and pay special attention to your thought process and emotions at the time of the trade. Often in the heat of the moment, our emotions can cloud our judgement. Being able to look back at these instances with the benefit of hindsight can be a great tool for building resilience into your trading.

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stay emotionally balanced

Two key emotions can derail your trading career almost as soon as it gets started - fear and greed. These two emotions are very strong and is often our biggest handicap as traders. You must learn to stay calm and objective, regardless of the situation you find yourself in.

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Pro-tip: Cultivate a routine that helps you to center your emotions and stay balanced. This can include working out, meditating, or listening to your favorite music. This will help you to avoid impulsive decisions and keep you focused on long-term success.

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set realistic goals

There is nothing more demotivating than not achieving the goals that you have set for yourself. Underachieving is not the way to a winning mindset! Make sure that the goals you set are not too big or unrealistic. While it’s important to think big, in the early days of learning to trade it’s also important to focus on some small wins to build your confidence and improve your mindset. Focus on achievable, incremental progress and reward yourself for hitting those milestones!

Pro-tip: Your first goal should be to become consistently profitable, regardless of how much you’re earning. It could be $20 a week, as long as it’s consistent! This will do two things for you: One, It will increase your confidence, and two, reassure you that consistent, profitable trading is possible! Keep track of your goals in your trading journal and refer back to them often. Use them as motivation on your tough days and enjoy the winning days.

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Building a winning trading mindset is not easy and it doesn’t happen overnight. Start by embracing a growth mindset mentality and start to lay the foundational building blocks for long-term success. You have already committed to a path of constant improvement just by reading this blog. Now take the next step on your journey by registering for the Marketmaster trading course.