I thought thought a lot about the subject of general psychology and that that is specific to trading, and have read and continue to read widely on the subject. I am convincedc that it is the execution of the plan that seperates the also rans from the average - good traders from the great traders. Ie you may have a proven trading edge , but do you have the psychological factors to allow you to impliment that trading plan with impunity ?
A tennis coach friend of mine once told me that the top 20 male tennis players in the world are roughly equal in respect of technical skills of the game, but it is the psychology that seperates the best from the also-rans. Similarly when you look at a top premiership football team like Man Utd, they can win games when they play badly. The 'winners' mindset is in part learned but also developed and obviously enhanced and strengthened by the repetition of winning....and as such it becomes a virtuous cycle.
As far as trading is concerned, my experience is that one has to have a trading plan and then seek to put that plan into action as closely as it is possible to do. Over the years I have sought to make my trading edge as rule based as possible so that at the point of decision there is no decision to make...ie It does satisfy the rules, or it does not - Ie I do enter the market, or I do not....In reality this for me was not as easy as it seems and to overcome the variables involved and associated with my own trading edge I settled on a grading of the repeating set-ups that make up my trading edge into a. Maximum Confidence, b. A rated, and c. B+ rated.
This grading decison was a reflection of the technical confluence of the set-up. What that did for me was that I could then recognise in realtime whether the set-up that was developing was worth the risk and if so-what risk. So, when I see a Max Confidence, A or B+ rated set-up developing I have already made the decision, that if price action behaves accordingly (the final piece of the set-up to develop and possibly give a trigger for entry) I am going to trade the set-up and I also know at what risk. Now beacuse I also know the historical strike rate (winning trades as a % of total trades,) of each set-up designated as a Max Conf, A or B+ rated set-up I also know the historical likelehood of success as well as the likely longest consecutive losing run of each such set-up. This to me is crucial, beacuse, not only have a removed the fear of entry from not having a plan (trading edge) but I have also graded my risk depending on the confidence of the set-up as given by the rating as well as knowing in advance the historical strike rate and historical likelehood of failure. In other words, in the absence of not being able to predict future price discovery, I have as much information as it is possible to have upon which to make a trading decision, and in so doing I have in theory greatly removed the negative psychological elements that may impede my ability to gain from the trading edge over any given sample. What enhances this ability is simple: Repetition, the act of doing this over and over again, day in and day out, week in and week out etc...
Returning to the original question (s) posed by the OP, Repetition is the key to developing a winning mindset, ie repeating the implimentation of your trading edge by knowing when it sets-up and the liklehood of it's success. Conversely the repetition of rejecting set-ups that are not Max Conf, A or B+ rated is crucial in the whole process of repetition. In the constant repetition of both trading set-ups that do fit the trading plan and rejecting those that do not I am effectively developing a mechanical approach to the trading environment that faces me every day and this is the essence of a winning mindset. You simply have to remove as much room for human discretion that exists as is possible.
Just one trader's opinion.
G/L
