Mindset

Focus

A point about preparing your mind for successful trading is to focus. Focus on the right things and the things in your trading plan that are important.

As an example, a few years ago, a colleague and I were running a full day course where we both presented on different topics throughout the day and the attendees could decide which presentations they attended. As the day started, the group split themselves quite evenly to listen to the two separate presentations.

This even split continued throughout the morning as people moved between the two seminar rooms between breaks and maintained a fairly even split.

After lunch, the first two presentations were on industry sector analysis and money management. The group split themselves up again however this time, 80% of the people went into the seminar room for the presentation on industry sector analysis and the remaining 20% entered my seminar room for my presentation on money management.

Before I started my presentation, I said to my attendees that this another reason why most traders fail. 80% of the group thought that industry sector analysis was more important than money management and therefore decided to listen to that presentation.

There are not too many more important things than money management and industry sector analysis, which was designed to help them with their entries, is certainly not one of them.

The lesson here is to focus on the right things. Don’t focus too much on your entry signal, as most people do. Keep it simple and then move onto the more important areas like position sizing, setting exits and preparing your mind for successful, disciplined trading.