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What happens if you perform all of the technical things you need to do to be a trader so that everything is in a state of readiness…except your state of mind?

 

What do I mean by not being in a mental state of readiness to trade?

 

• Suppose you have not developed an entrepreneurial way of thinking and still think of yourself as someone’s employee: How far would you get running your trading business?

 

• Suppose you have failed to prepare your family for the financial and emotional ups and downs of a trading career: What kind of support will you have when you are in the midst of a draw-down and will you be able to weather the storm?

 

• Suppose you still have fears inside that you have not dealt with and you are taking risks that are reasonable for your system but unreasonable for your emotional readiness: Will you be able to handle the stress of trading in an environment of risk?

 

These are just a few of the many areas in which a trader can be unprepared mentally to trade.

 

Putting mental readiness first

 

Many traders spend all of their preparation time in developing a trading system or methodology and little, if any time in preparing themselves mentally to use their system. I have worked with countless traders who have spent years developing the perfect system, only to find that they could not trade it because they did not have the mental readiness to trade.

 

On the other hand, I have also worked with a handful of traders whose minds were so ready to trade that they started trading before they even had a system. These precocious traders figured out trading backwards, failing their way to success as they went forward, because they thought of themselves as traders from the very beginning.

 

Even when these early bloomers did not have all the right components in place, they were able to trade because of their mental readiness. In the meantime, others who have done everything right except prepare themselves mentally cannot take effective action when the time comes to do so.

 

How do you know when you are not mentally ready to trade?

 

• You are embarrassed to tell the people around you that you are a trader.

 

• You have not gotten the support of the people around you.

 

• You cannot make the commitment to buy the equipment and tools necessary to trade full-time.

 

• You cannot take the trades that are given to you by your system.

 

• You take the trades given to you by your system at the wrong time.

 

• You cannot follow your rules about where to place a stop.

 

• You break the agreement you made to exit the trade.

 

• You cannot take the risk necessary for your system or method to work.

 

• You are not trading at your level of peak performance.

 

This last area of mental readiness, peak performance, is defined by your emotions. If the emotions you are experiencing are not resourceful, you are not ready to trade and you are certainly not at your level of peak performance.

 

If you are experiencing fear, greed, anxiety, grief, depression, pessimism, or loss of confidence - just to name a few of the un-resourceful states - you are not ready to trade.

 

If you are experiencing these un-resourceful emotional states or any of the other signs that are listed above on an on-going basis, there is no way that you will not be able to trade your system automatically.

 

The sole purpose of mental readiness is to get you to the point where you can follow your system or methodology, which is the only way you can make money consistently over time.

 

By Adrienne Toghraie - Adrienne Toghraie is the founder of Trading on Target and is the author of multiple books on trading and the psychology of trading. She is considered an expert in the financial community for coaching traders, brokers, and investors to their next level of success. This excerpt was taken from The Trading on Target E-Book.