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Nial Fuller

Professional Trader, Author & Coach

How to Develop a Peak Performance Trading Mindset

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By in Forex Trading Blog May 27th, 2015 | 13 Comments

peaktradingmindset“On that last trade, I left too much money on the table, and I’m definitely not going to do that on this trade” Ben said to himself silently, “I’ve given up too much profit, and this time I’m going to really get every pip I can out of this trade.” Ben could feel the anticipation circulating around his body; the excitement was palpable.

As the trade unfolded, Ben let the trade go beyond where he normally looks to exit, ‘knowing’ that this one was going to keep going for ‘a while.’ As the trade continued in his favour, Ben felt a rush of adrenaline coursing through his veins. As the trade ticked further in his favour, he started to get giddy. Ben was ‘hooked’ now, he thought “I’ve caught a huge winner, now I’ll show them!”

Just then, the trade began quickly moving against him, faster than he could have anticipated. Ben didn’t panic at first, he reminded himself that markets ebb and flow and that “this one would come back soon.” But, it didn’t. It kept going further and further against him until he finally accepted that he had let another big winning trade turn into a loser. Once again, he had shot himself in the proverbial foot. Ben now felt ashamed and embarrassed, he thought to himself, “How could I have let this happen yet again!???”

Emotions can easily override rationality

Why did Ben do this yet again? How did he arrive at the state of mind that influences him to make the same mistakes over and over again in the market? To an objective bystander, it would be easy to simply say that he deviated from his trading plan and was undisciplined. However, this assumption ignores a more important, deeper fact, that human beings (and especially when trading) are controlled by their emotions.

Our emotions dictate how and what we are able to think. In the case of Ben, the emotional state that he needed to be in to take the obvious open profit when it was available, was blown away by the more intense emotions of fear and greed that he felt. That is, the fear of missing out and being so greedy that you just want ‘more and more’. As this fear and greed began to grow inside of him, his thought processes and ultimately his actions, became so influenced by it that his rational trading ability was essentially eliminated for that time.

As with so many other traders, Ben didn’t yet have the mental skills to control his emotions as he entered the trade and watched it unfold. As a result, a man who thought he had all his i’s dotted and t’s crossed, became ‘possessed’ by the more primitive processes of the human mind. Needless to say, Ben’s trading plan didn’t contain any plan for controlling his emotions, this is a very common mistake amongst traders. Until Ben (and you and many other traders) learns how to keep the emotions in-check that hi-jack your ability to trade rationally and logically, you will continue to repeat the same mistakes and lose money as a result.

Be Aware of How Your Mind Works as you Trade

The first step to developing a peak performance trading mindset, is to maintain awareness of your emotional nature as a trader. To understand this better, let’s discuss more in-depth just what happened to Ben.

What Ben experienced was the result of a trading with an uncontrolled and overly-emotional mind. He was not aware that his primitive brain areas that make him overly-emotional were about to kick in as the trade began. The transition from a rational and logical mindset into a more primitive ‘fight or flight’ mindset is often very subtle and difficult to detect, especially while trading. It happens without you even noticing unless you are ready for it and have planned for it and know how to ‘combat’ it. As a result, once the trade was under way, Ben’s mind was already getting into a primitive ‘hunting of the prey’ mode, and moving away from the rationality and planning that got him to that point.

As the trade unfolded, Ben became consumed by ‘bagging the big prey this time’, and he would accept nothing less. As we know, in his emotional stupor, Ben lost money, again. The most difficult aspect of it all, was that these same tendencies to ‘be the best’ and ‘pursue the big winner’ had served Ben well in many other areas of his life, particularly his career outside of trading. But, what he was starting to realize, was that these traits and tendencies actually worked against him as a trader. But why? It’s mainly because the traits that lead to lasting success in the market, are things like patience, being calm, rational and uninfluenced by emotion, all while constantly being tempted. Not an easy order to fill, to say least.

To an objective outside observer, Ben was clearly being greedy and afraid to take profit because he thought he’d get a bigger one. But to Ben, and very likely to you when you’re in the ‘heat’ of a trade and you’ve already let your mind slip over that threshold from rationality to primitive / emotional mode, it’s nearly impossible to turn back. Thus, the key is to not let yourself move past this mental threshold in the first place…

How to calm your mind through your body

A big mistake that traders often make in trying to fix their ‘mental’ trading problems, is only focusing on the mind. For centuries, humans have tried to isolate problems of the mind from the body. However, this is a mistake. Modern Western science has concluded that separating the mind from the body is all but impossible. Our minds (and hence emotions) are essentially merged together as one; they are inseparable.

What Ben didn’t know, and what you likely don’t know either, is that simply changing the way you breathe can heavily influence and help you regulate your mindset while you trade. By practicing diaphragmatic breathing, you can control stress much better and even prevent your brain from entering into ‘fight or flight’ mode, which is when you cross that threshold from rationality to overly-emotional trading.

Wikipedia states, “According to the University of Texas Counselling and Mental Health Center, ‘Diaphragmatic breathing allows one to take normal breaths while maximizing the amount of oxygen that goes into the bloodstream. It is a way of interrupting the ‘Fight or Flight’ response and triggering the body’s normal relaxation response.’”

Diaphragmatic breathing is where you take deep breaths and contract your diaphragm. It’s marked by an expansion of the belly when breathing, rather than the chest. Many people consider this a healthier way to breathe and it obviously has clear benefits in controlling one’s mindset as well.

To be clear, I am not saying that diaphragmatic breathing will solve all your trading problems or even that it will give you the perfect trading mindset all the time. I am simply saying that it is a very valuable tool you should look into to help you manage your trading mindset while you trade. It can help keep you rational and calm, instead of emotional and overly-attached to your trades. This breathing technique will be a good complement to an overall sound trading plan and mastery of an effective trading strategy. Thus, I recommend you learn more about it and start practicing it while you trade and even while you’re not trading.

If you’re looking to develop your own peak performance trading mindset, check out my trading education course for comprehensive training and support.

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Nial Fuller

About Nial Fuller

is a Professional Trader, Investor & Author who is considered ‘The Authority’ on Price Action Trading. His blog is read by over 200,000+ followers and he has taught 25,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition. Checkout Nial's Professional Trading Course here.
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  1. averroes

    it is a very helpful technic thank a lot

  2. kumar

    Thanks Guru….

  3. a little fish

    Thanks Nile. You are right and 100% correct. It is not easy to set emotion aside, I am just like a butterfly, get blind when I see the light from fire and through myself in till nothing left from me but ashes. :-(

  4. Ohidul Islam Limon

    nice article for forex trader.

  5. GeorgeGreek

    Thank you Nial for another astonishing article re psyhology of trading.
    Of course we must compete with our primitive greed and fear and be disciplined.
    Something that will help us all, is to understand that the market is always there and is always up and down, so we dont need to try to catch the big shot. If we have concrete daily targets that have been accomplished it’s enough. Take the money and run!! Tomorrow is another day!!

  6. marisa

    Hi Nial, very true, in order to make the right decision one has to stay calm, and deep breathing does help. I love your articles, not boring at all. keep up the good work. cheers

  7. ismail

    Being organized running in the market with discipline and patient equipped with right mindset having strong plan including money management to apply it in price action strategy in high probably trade is what I learned Nial
    Running with emotions verses logical thinking is the difficult part which this article trying to solve

  8. Bello

    Nice article greed can take away all you have worked for

  9. terry shead

    Good one Nial

  10. BarbsCalgary

    I am applying what I learned in The Secret – specifically practicing how to apply the Law of Attraction. Its a little spooky how well it works. Add breathing and I’ll be your most successful student.

  11. Lionnel

    Thats spot on Nial..am in the process of going through this GREED thing…which i hve discovered is a quiet disease and attacks ones mind unknowingly…i know i will beat this by your help in reading what u write..am only playing with little dollars and doing the 5min charts until i set and adapt body mind n soul to stick with the take profit plan before entering and trade…and leave the trade with none greedy profits and move on to the next trade… ☺

  12. Ibrahim

    Thank Nial,that articales very good for the new trader like me.Now i am still study your cost slowly.Thank you very much for your new articles.

  13. phumon

    Thank you Nial !

    This is one of very useful articles I have read from your posts.
    I totally agree with you that to train our boby is another important skill for becoming disciplined trader.
    If you have any idea besides diaphragmatic breathing, like guestures or postures, please add them up.

    Thank you again for sharing us your wisdom.