 Welcome back to the Trade Hacker Mindset. In this episode, I want to talk to you about the toxic head trash that we deal with as traders and give you some things to think about to help you get rid of that toxic head trash. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. Alright, so let's jump into our discussion of getting rid of your toxic head trash. Now, we're all aware of kind of that lifelong debate of nature versus nurture, right? Where do we get our thoughts from? Why are we the way that we are? Why do we act the way that we do? And what makes us be either successful or unsuccessful in things that we really want in life? I've seen, I've read stories, I've seen, you've probably seen documentaries about twins who've been separated at birth, right? I've heard stories where twins were separated at birth and they ended up meeting up later in life as adults and one twin, one of the twins was uber successful, driven, you know, had great relationships and family life and wealth and success where the other twin, the other individual, struggled their entire life. They were negative, couldn't keep a job, unsuccessful financially, unsuccessful with relationships, almost polar opposites. And so that would, that would tend to give you an idea that it's really about nurture versus nature, right? Though the person who was successful had grown up in a, that was adopted by a good family that was well to do and that individual thrived in that situation where the other one that didn't do well, grew up, was adopted by a family that didn't have money, that didn't have resources, that didn't have a good environment socially for that individual to grow up in. And so they were almost like polar opposites. But then I've also seen, so that would, that would kind of relate to the whole idea that nurture is more, has more of an effect on who we become than actual nature. However, I've seen the exact opposite too. I've seen stories about twins who were separated at birth and met up later. And it was just crazy how many similarities they were. They were both in the same profession. They both had similar families, you know, a wife that, that had blonde hair and blue eyes and two kids and lived in similar type neighborhoods and all that kind of stuff, which would lead you to believe that it was actually just in their DNA. That was who they were going to become regardless of the environment that they grew up in. But the reality is, I think most of you all would agree that the way that we are is affected both by our DNA, both by the nature of who we are, how we're born and nurture, right? The society we grow up in, the culture we grow up in, the family that we have that we grow up with. It doesn't have to be just nature. It doesn't have to be just nurture. It's a combination of both of those together, right? And we've talked about in past episodes how a lot of the things that we encountered growing up as young children actually affects our psychology, actually affects our mindset when it comes to making trading decisions. And these things affect our emotions, which in turn affect our expectations. Our emotions have a huge impact on whether we are meeting or falling short of our expectations of ourselves. If our expectations are biased in one way, then we're likely to experience emotions that are skewed in some way or another. And this relationship between our emotions and our expectations is extremely important for traders, especially if you are a new trader or a developing trader. One of your goals as a trader is to be able to sustain your motivation and your learning efforts as you continue to grow as a trader. You become defeated or discouraged or fearful or negative. This all works against you. If you're trying to learn out of a sense of fear, then you're not going to effectively learn what you're supposed to learn. If you're going to maintain a focus and concentration that maximizes your learning efforts, you have to be absorbed in the markets. The title of one of my episodes in this podcast here a few weeks ago was dabbling versus all in, right? Are you just kind of dabbling in trading or are you really all in like you're going to make this work no matter what happens? But the problem is you can't be completely obsessed. You can't be completely absorbed in the market if you're also battling this outside emotional distress. So I want to give you a few examples. I'm going to ask you a few questions that I want you to answer about yourself to help you really narrow down. What are your true expectations of yourself when it comes to trading? Number one, what do you think of when I ask you, did you have a good day trading? What do you think of if I said, was today a good day trading for you? What would pop into your mind as making a good day? What makes a day good when it comes to your trading? If you said, well, a good day to me is a profitable day. This is something that is an issue for not only new traders but every trader, right? I mean, the whole goal of trading is to make money. And so we tie our expectations, we tie our emotional experience to our P&L, to our profits or losses. I think all of us wake up in the morning and we expect to have a good day. But if you define your day as good, only if it's a profitable day, then you're setting yourself up for disappointment when the market works against you and you end up having a red day. If you can shift your thinking from a good day of trading is not about the ending P&L, but a good day of trading is how you executed your orders and how you used prudent risk management, this is going to do wonders for your overall emotions when it comes to trading. Because remember, sometimes we will trade perfectly. We will execute exactly like we need to. We will use proper risk management. But that doesn't mean that every day is going to be profitable. And because of that, this is why trading is so difficult to master. And that's why you'll have individuals who are very successful in other careers, professional doctors, professional lawyers, very successful business owners who come into trading and just get their clocks cleaned because in their environment, they can control their environment. But when it comes to trading, you can't control the market. So the only thing that you can control is when you enter and when you exit. Some good days will bring profits and others will not. Sometimes we can trade terrible. We can trade very poorly and we can still stumble into a situation where we're profitable. So the bottom line is we definitely should expect to have good days, but how we define those good days should be defined by your trading practices, by the fact that you followed the rules, by the fact that you used good money management, not by the ending P&L. If you go into your trading day expecting profits every single day, this is a formula for emotional letdown. And that's why I always encourage traders, when you're setting your goals, don't set a monthly P&L goal. Don't set a daily P&L goal. Don't set a weekly or a yearly P&L goal because you are not in control of getting to that goal. When you're setting goals with trading, you have to set goals based on what you can control and what you can control only. You can't set goals based on P&L because that's out of your control. So define what a good day in trading is based on goals that you can control. So next topic, what does it mean to work hard in trading? I think in our society, at least in the US, putting in hours, putting in reps, putting in the time is part of what is considered working harder. We're told as we grow up that the harder you work, the more successful you're going to be. And so if that's your belief, and that's what you've been told, and that is what has gotten you to a level of success in your current career or in other situations in your life, when you get into trading, sometimes you might think that working hard means trading more often. So this translates to the more you trade, the more money you will make. But the problem is over-trading can be detrimental, and this can actually make you lose money as opposed to make money in the markets. If we're making trades just to trade without a specific edge, without our specific setup that we know we have an edge trading, if we're just trading just to trade, that's working against us. So that the adage of trading more often equals hard work, equals more success, doesn't come to fruition when it comes to trading. And the reality is that more market analysis. So let's say that you say, okay, I'm not going to over-trade because I'm not going to really even put more capital at risk. I'm just going to spend hours and hours doing analysis of charts and analysis of companies fundamentals and analysis of the markets, analysis of technical indicators and analysis of fundamental indicators and all the things that people use for trading. Sometimes traders will think, okay, I'm just going to put in the hours because that's going to make me successful. But the reality is that most market analysts are not very good traders. Their whole career, their whole, all of their time has spent analyzing data, analyzing markets, and that doesn't necessarily translate to being its successful trader either. Some of the most successful day traders that I know only trade for an hour or two a day. Some of the most successful swing traders I know only trade for 10 or 15 minutes a day. So this notion that working hard, putting in the time, putting in the hours, constantly trading, constantly analyzing the market, the notion that that is what makes you successful trader is actually completely inaccurate. Now, of course, when we're learning to trade, we have to put in the time to understand. We have to practice executing orders. We have to practice good money management by cutting losses. We have to practice all the things and we have to have a good foundation, a good base of markets, whether it's technical analysis or fundamental analysis, or in this case, mental analysis, the most important, you have to have a good base. But once you have that base, it doesn't take hours and hours and hours of what we would term in air quotes, hard work to become a successful trader. Because if we expect trading itself to generate the learning that we need, then it pretty much ensures that our motivation for learning will lead to over-trading and will lead to, it could lead to a lack of motivation and certainly could lead to a loss of profits, a loss of capital. So the bottom line is working harder does not mean trading more often. It's kind of like the old adage of, don't work hard, work smart. Don't trade a lot, trade when you know you have your edge. All right, so here's my third and final question. Here's my third and final point. What would it mean to be successful as a trader for you? And here's what I mean by that. Is your expectation that your sole income is going to come from trading? Is that the definition of trading success for you? Because if it is, this creates an expectation that's almost guaranteed to generate frustration, discouragement, negativity, fear. Now don't misunderstand me. It is definitely possible to make your core income living from trading. I do it myself. But here's the problem. Is most new traders come in to trading with the expectation that within a few months, they're going to be able to generate income that's going to be able to sustain their current lifestyle. And if you have that expectation, then you are going to be extremely frustrated and extremely discouraged. Think about this. No professional who has ultra success makes their living from doing what they're going to do in the early years while they're building this expertise, while they're building their experience. If you're an athlete, you start playing sports when you're a kid, then you play sports in high school, then you probably play sports in college. And then, and all of that time, you're playing, you're an amateur, right? You're not generating significant money. And then only the top, top, top percentile actually go on to be successful and make millions of dollars in that specific career. If you are an actor or an actress, you typically spend years and years getting lessons and, you know, doing plays in your hometown theater and you do all these things as before you can build up to hit it big on Broadway or to hit it big on in Hollywood, right? It just, it doesn't happen overnight. You don't just walk in, audition for a part and become the next whoever. Brad Pitt, Angelina Jolie, name the successful actor. You know, it just, it just doesn't work that way. If you're a physician, you spend four years as a medical student, then four more years as a resident and then another four, five, six years in a specialty training before you even start to have any type of success from a monetary standpoint. The expectation to make a core living, to make a, you know, a lifestyle of generating income in your first months, in your first couple of years is just, it's really wholly unrealistic. A more realistic expectation would be to keep your losses to a reasonable level, break even, cover some expenses here and there and improve your trading process. Now, of course, there are outlying situations. There are outliers and typically those are the ones that you hear about in the news or you see on social media that it appears that they were just, you know, turn into a success overnight with no hard work, no training and not putting in the time. Though that's few and far between. That's, that's like winning the lottery. Do people win the lottery? Yeah. Yeah, they do. But is that an expectation of you? Can you depend on buying the winning lottery ticket to take care of you the rest of your life? Of course not. You know, and it's the same thing with trading. You have to put in the time. You have to put in the effort. You have to channel your expectations. Otherwise, you're going to get discouraged and you're going to get unmotivated and you're going to quit, which is what happens to a lot of traders before they hit that pinnacle of success. So all three of these topics, all three of these questions that I just asked you, consider these toxic head trash that you have to reevaluate, that you have to change your way of thinking to help you set your expectations that's going to help you create an emotional situation that is actually going to be favorable in your journey to learning how to trade and not detrimental. We talk a lot about documenting your trades. We talk a lot about keeping a trading journal. Now, I know this from personal experience. I was inconsistent at best my first 10 years of trading. 10 years. I've been trading over 20 years. In my first 10 years, I was inconsistent at best. And part of the reason was when I started becoming successful was I started to focus on my mindset and really, but one specific key thing that really helped my trading and something that I fought and I fought and I fought those first 10 years was keeping a trading journal. I didn't want those types of boundaries. I didn't want those types of rules. I didn't want to put in that type of thought. I didn't want to put in that type of effort in my trading. And the reality was that was part of the reason that my profits and my trading was so inconsistent. So I want to highly, highly recommend that you start keeping a trading journal. And part of this journal is to write down your expectations of what a good day is trading, to write down your expectations of what you want out of trading, to write down your expectations from a financial standpoint of what you think is realistic from your trading. I think it's important to be realistic about your trading returns. We've had years where we've made triple-digit returns. We've made over 100% on our account in a year, but we've also had years that we've lost. And so you've got to be realistic about your expectations, and part of that is proper risk management. So you've got to be able to analyze, okay, here's how much risk I'm taking, and based on that amount of risk, here's what I can realistically expect as a return. If you have unrealistic return expectations because of all the garbage that you see online, about thousands of percent returns with very little risk, that does not exist. So you've got to get out of the lottery mindset and really set expectations based on the amount of risk that you're taking, what you can expect from a return standpoint. This is all part of the process of journaling your trades, journaling your goals, and creating these expectations that is going to keep you motivated to continue your journey that's going to help you become a successful trader. I hope this was helpful. If you're interested in being part of a community, just go to community.navigationtrading.com. We call it the trade hacker community, and it's a great group of people, hundreds of traders interacting on a daily basis, not only about mindset, but with the sole purpose of helping each other become better traders. Community.navigationtrading.com. Look forward to seeing you on the inside, and we'll see you in the next episode.