 Welcome back to the Trade Hacker Mindset. In this episode, I want to talk to you about keeping a mindset journal. 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. All right, so welcome back. We took a three week hiatus from producing new Trade Hacker Mindset episodes. But we are back on track so you can expect a new episode each and every Monday morning to get you in the right frame of mind to start your trading week. So let's jump into this discussion of keeping a mindset journal. So a few episodes ago, I talked about in the episode about coaching, I talked about hiring a trading psychologist. We've had our very first main session to start with very little of what we have discussed at all so far has anything to do with trading. In fact, I had to spend somewhere between 12 and 15 hours completing a life history questionnaire that was all about negative events or events in my life that created a negative emotion, totally unrelated to trading. So what do you think is the point of this trading psychologist having me go through that exercise? Well, to start with, you may have heard this and I believe it to be absolutely true. And that is our subconscious mind, the mind that we have that makes decisions for us every single day that we don't consciously think about. Our subconscious mind was almost 100% developed or about 90% developed by the time we reached age eight. So think about that. That's crazy, right? So if your subconscious mind was developed between the age of birth and age eight, you can essentially think about it as the trading decisions that you make, the decisions that you make while you're trading hundreds, thousands, millions of dollars on a daily, weekly, yearly basis, those decisions are being made by an eight-year-old. When you put it into that perspective, now you can kind of understand why you might make some of the boneheaded decisions that you make while you're trading, right? Because the trading decisions that you make are related to negative events or maybe positive events that happened to you even prior to the age of eight. So one of the most powerful things that you can do is you can take some of these psychological issues that have accumulated in your subconscious from a very young age and address them out in the open. And so that's the purpose of keeping a mindset journal. Now, when I first started trading, and even today, I keep a trading journal, right? And I hope you do too. I'm not going to talk about a trading journal today, but I don't want to minimize the importance of a trading journal specifically. If you're not keeping a trading journal, then you're most likely not having any type of consistent results in your trading. That's how important it is. So when I first started trading, part of my trading journal was I was looking for points in time when the market was making major reversals in price. And so I was looking at those, and then I was journaling and looking at other indicators and other aspects and other criteria in the markets to figure out if there was any relationship between when the market turned and what these other things were doing at that same time. And so this is a very helpful exercise because what you'll find over time is that there are very specific patterns that occur over and over and over in the market. And after a period, an extended period of recognizing these patterns on charts and recognizing the environment in the overall market, you could start to see those in real time. And once you start to see this happen, then you can start to develop strategies and you can start to actually place trades around these specific patterns. Now, I'm not talking specifically about technical analysis or using indicators. It was more around the environment of implied volatility and all the different aspects of that around designing strategies and positions to take advantage of specific things going on in the market. The other value of keeping a journal is so that you can see specific times where you are making mistakes or not managing the trade correctly. You're cutting your profits too soon. You're letting your losses go get too big. All of those types of risk management and money management type scenarios can be easily reviewed and summarized and addressed when you keep an actual trading journal. So let's take that one step further and let's talk about keeping a mindset journal because while there are similarities, there are some differences too. Take for example, if you are journaling specific patterns in the market, you're looking for different pattern recognition. Well, the same thing can happen while keeping a mindset journal. The difference is we are not looking for specific patterns in the market. We are looking for specific tendencies and patterns in our personality and our mindset around trading. In other words, this is a tool for recognizing your own patterns as a trader, not the patterns of the market, but our own particular patterns as traders. Now, there are really three different patterns that you'll start to see. One is a behavioral pattern. This is kind of a tendency for you to act in a particular given way based on a given situation. So it's your specific behavioral pattern. The second is an emotional pattern. So it's your particular emotional pattern. This is where you kind of have a tendency to go in and out of different moods or state of mind in reaction to specific events. And the third is more of a, what I'd call like a thinking pattern or a cognitive pattern where you have a tendency to enter into a specific thinking pattern or a specific frame of mind when you interact with a personal or market related situation. All right, so we've got behavioral patterns. We've got emotional patterns and we've got cognitive patterns. And sometimes we have patterns that are kind of a mixture of all three of those, right? And if you didn't already know this, sometimes these patterns work against us, right? They work against what's in our best interest of what we're trying to accomplish. They actually lead us to make bad decisions or they interfere with our market analysis or our planning. And this is the reason that keeping a mindset journal can really help us to change our patterns and get back on the right path to what we're trying to accomplish. Because here's the thing. Even if you are aware of a specific pattern, even if you understand that it does exist, why do you keep on repeating the same pattern of thought or behavior again and again and again, even if you are aware of what the consequence will be? You know, I know for me, I've had situations where I've beat myself up, called myself names, every name in the book because I'm like, why are you doing that? Why did you just do that? And it's usually after the fact. It's usually after I close out a losing trade and I'm like, you idiot, why did you do that again? Kind of thing. So, you know, these things happen over and over and so just being aware isn't enough because even if you're aware, but you continue to do it over and over, then what happens is then you start to blame yourself or if you're the type of person who doesn't take any ownership, you start to blame the market or you start to blame somebody else. And here's the thing, tying it back to what I said at the very beginning about our subconscious being developed before the age of eight. When we repeat patterns in trading that consistently lose us money or we miss out on opportunities, there's a very high likelihood that we are kind of replaying some of these coping strategies that we learned way back earlier in some phase of our life in childhood. So where this journal becomes useful, it's gonna help you unlearn these patterns. So just like I've used a trading journal to become aware of market patterns, our mindset journal can help us to figure out these repetitive patterns of thinking and feeling and acting that cause blocks that don't allow us to take our trading to the next level. And over time, what's gonna happen is you're gonna start to recognize what you're doing at the time you're doing it instead of after the fact. So do yourself a favor, start taking, if you're already doing a trading journal, add a column or two for mindset. If you're not doing either, start doing your trading journal and start doing a mindset journal, it can be all in one place. And here's the thing, this doesn't have to be some elaborate spreadsheet that you start to fight in your mind of doing every day. No, it doesn't have to be that way at all. In fact, I would encourage you to make it as easy and as friction-free as possible. Here's what I do, here's all I do. Number one, I have an alarm on my phone that goes off three times every day. I have it set at very specific times. Because if you don't remember and you wait till the end of the day or you try to recap your mindset at the end of the week or after a couple of days, it's not gonna happen. You're gonna forget about all the little things and it's the little nuances and it's the little things that accumulate and make a big deal. So I have an alarm set on my phone that goes off three times a day and when that alarm goes off, what do I do? I open up the little notes app on my phone, okay? This is it. I don't have some elaborate spreadsheet. I don't have to go into this big, long story about how I felt and what I did and all this stuff. No, all I do is I take out my little notes in my iPhone and I type in my phone exactly, here's what I do. I type in what negative emotion I've had. So if my alarm goes off at 11 a.m., I think back since I woke up, what negative emotions have I had, okay? So what was the negative event? Then I think about looking down on that event not from a perspective of not being in the event. In other words, I almost look at it from a perspective of it happened to somebody else and then I give that event a rating. So on a negativity scale, I call it, I give it anywhere from a zero to a 10 or a one to a 10, right? It's never gonna be zero, otherwise it wouldn't have been negative, right? So on a scale of one to 10, 10 being the most intense, where did that negative event fall? How intense was that feeling of negativity when I had that event, okay? So I label it one to 10. And then after I think about it from a perspective of looking at it from somebody else's perspective, so I look, I replay the event, I look at it from a perspective as if it happened to somebody else and if I saw that event happening to somebody else, what level of intensity would I rate it then? And so I re-rate it from zero to 10. And what you'll find is when you go through it and you have a specific level of intensity, and let's say it's a pretty frustrating thing, so let's say you give it a nine, but then you look at it from a perspective of it happening to somebody else almost always, almost invariably, I'm reducing it by a significant margin. So if I gave it a nine when it happened, how I felt in the time, in that situation, then I look at it from somebody else's perspective, it'll almost always drop from a nine to a six or a nine to a three or some significant drop to help you understand how really insignificant some of these minor incidences actually are, but when we are in the moment, they feel a lot more intense. And what you'll find, so as I scroll through my phone, I basically start a new note page every day in my phone and so I can scroll back, I can just flip through and look at what happened on these different days and sometimes it's almost comical of how I felt about a certain situation now, whereas at the time that it happened, it was kind of a big issue. Now, here's the cool part. When you tie this into trading, and remember this mindset journal, these notes that you're taking on your mindset, this does not need to be trading related. In fact, I would really focus on negative events that happen that are outside of trading. I want you to include your trading as well, but also focus on any little incident or negative or any event that causes a negative reaction, a negative emotion, totally unrelated to trading because here's what's gonna happen is once you start to tie in trading as well, you are going to see a shift in the way that you make decisions. You're gonna see a shift in the way that you react to losing trades. You're gonna see a shift in the way that you react to winning trades and it's such a powerful thing that you'll start to see over time. Now, keep in mind, you can't just do this for three days and expect this major shift to happen in your trading. That's not gonna happen. We know that habits and actual changes in our psychological structure, it takes time. Remember, all this stuff has been built up since we were kids and so trying to just flip it around and change it within a few days, that's not gonna happen. So this has to be something that you do consistently for a period of time but I promise you'll start to see some major changes and don't try to change your patterns. The first step is really just to be aware of your patterns. So just do this without the intent of making any major changes at first. Just document it and start to be aware of these different feelings you have. Start to be aware if you start calling yourself names after you have a losing trade. Start to see what your reactions are after and during different events that cause negative emotions and just document those with no intent and then over time, after you've been doing it for a week or two weeks, then start to see what you could be doing differently to change your mindset around those events and start to change those patterns. So it's really important not to have, try to do too drastic of anything first, start out documenting, then being aware and then you can start to shift those patterns and you can start to change those patterns. I hope this is helpful. I would love to hear about any examples that you've come across in your own personal trading and mindset journal. Just go to community.navigationtrading.com. We have a specific channel called the Trade Hacker Mindset where you can post any type of information that you've heard or want to share about this podcast or any other type of mindset related topics as it relates to trading. Just go to community.navigationtrading.com. We have hundreds of traders interacting on a daily basis, not only about the mindset stuff, but trading share ideas with the sole purpose of helping each other become better traders. I look forward to seeing you on the inside and we'll see you in the next episode.