I received a good question this week from a reader, Vladan:
Adam, can you please talk in one of your podcasts about mental strength when it comes to discretionary trading and how to improve it.  I know it ultimately comes from conviction, backtesting and knowledge but even then it has a nature of its own.  Mine has unfortunately getting weaker instead of stronger. 
This podcast gives some of my answers and perspectives. We start by looking at high-level mental strength and finish with specific techniques you can apply to trading and to your development as a trader. Here are the show notes:
Improving mental strength
First question: should you improve your mental strength?

* Be careful what you wish for
* Pain exists for a reason

Where to find more info?

* Sports psychology
* Military training programs
* Elite performance of any kind
* Research paper: Grit: Perseverance and Passion for Long-term goals, Duckworth et al.

* High achievers were rarely prodigies
* Long work for 10-15 years
* Strong interest
* Desire to reach achievement
* Willingness to put in great amounts of time and effort
* “….in every field, grit may be as essential as talent to high accomplishment.”
* Emphasis is on finding your place, so study broadly as well as deep

Elements of mental strength

* Consistency

* Consistently = discipline = grit

* Consistency must be a habit

* Talent, desire, and passion are simply not enough

* What is your motivation?

* Remove results from sense of self
* Must have motivation and meaning outside of trading
* Trading must fit with who you are, but that’s not enough

* Learn to let go

* Sedona Method is one possibility

* Flexibility

* Bend, don’t break
* Figure out which battles are worth fighting

* Ethics

Trading-specific ideas

* Refine your expectations

* Length of learning curve
* What does success look like?

* Embrace uncertainty

* Results can be highly variable
* What is and what is not your responsibility?
* Be careful of “trade review”

* Understand your emotional makeup

* Meditation
* Get in touch with physical sensations
* Manage your emotions

* Make sure you are doing the right thing

* What is your edge?
* How do you know?

* Love the markets, the process, and yourself

* Right mental and emotional state attract success

 

If you enjoy the podcast, one of the very best things you can do for me is to leave me a review on iTunes here.

Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter.

Enjoy the show: