How Can I Develop a Traders Mindset? - Blackswan Fx
Learn how to develop a successful trader's mindset. Discover tips and insights for managing emotions, building confidence, and making sound decisions!

How Can I Develop a Traders Mindset?

Your success or failure in forex trading is heavily influenced by your mindset. Without the proper Forex trading psychology, making money is unlikely. Regrettably, many traders either neglect or are unaware of the importance of having the correct mindset for success in forex trading. Even with a good trading strategy, if a trader’s mindset is incorrect, the strategy will not generate profits. Today’s post provides essential guidance on developing a profitable trading mindset, as success in trading is the outcome of developing proper trading habits, which stem from the right trading psychology. Please share your feedback and comments after reading today’s post.

1. Set realistic Expectations

To cultivate a suitable Forex trading mindset, it’s crucial to have practical expectations about trading. Don’t assume that you’ll quit your job and start earning a million dollars a year after trading live for only two months with a $5,000 account. This unrealistic expectation will hinder your ability to make consistent profits. It’s imperative to accept the fact that you can’t achieve trading success by over-trading or over-leveraging, as although you may earn a quick profit temporarily, you will eventually lose everything and more. It’s important to be realistic about the amount of money in your trading account and the amount you’re willing to lose per trade.

Only trade with disposable “risk” capital

Money that you don’t need for life expenses such as retirement. If you don’t have any disposable capital, keep demo trading until you do, or stop trading entirely. Under no circumstances should you trade with money you’re emotionally attached to. Always assume you could lose whatever money you have in your account or in a trade, and be genuinely comfortable with that. Trading with scared money will lead to severe emotional pressure and result in ongoing losses.

Ensure you are comfortable enough to sleep at night!

This relates to the previous point regarding disposable capital. However, it’s crucial to ask yourself before every trade if you’re 100% neutral or at ease with the possibility of losing the money you’re about to risk. If you’re unable to sleep at night due to worrying about your trade, you’ve risked too much. The amount you should risk per trade is subjective and depends on your personal comfort level. If you trade four times a month, you can take a higher risk per trade than someone who trades 30 times a month. It’s relative to your trade frequency, trading skills, and personal risk tolerance.

Each trade is independent

It’s crucial to remember that each trade is independent of the previous one. Your previous trade has no bearing on your next one, so it’s important not to let emotions dictate your decisions. Avoid becoming overconfident after a winning trade or vengeful after a losing one. Every trade should be viewed as another execution of your trading edge. Avoid risking more than usual after a string of winners or jumping back into the market to make up for losses. Emotional decision-making will only hurt your chances of success.

Detach yourself from your trades

Avoid becoming emotionally attached to your trades. Implementing the three preceding points will help to prevent this. Remember that losing on a few trades does not make you a bad trader and winning on a few trades does not make you infallible. Keep your trade risks and life expenses in perspective to help maintain objectivity.

2. Learn the power of patience

I believe that realizing I didn’t need to trade frequently to generate a decent monthly return was crucial in improving my trading. Consider that a 6% annual return is considered excellent for a savings account, and achieving a 12% yearly return on a retirement fund is satisfying. So, why do traders expect an unrealistic return of 100% or more per month? Making 5 or 10% per month is still remarkable over a year. While I cannot guarantee a specific monthly return, recognizing that slower and steady gains lead to long-term success in the markets is advantageous. Here are some additional points to reflect on regarding patience:

Start on the daily charts

To develop a more patient approach to trading, start by learning to trade on the daily charts. By focusing on the bigger picture, you can avoid the urge to over-trade that often comes with lower time frames. This is especially important for novice traders. Daily charts provide a relevant and practical view of the market, and you don’t need to trade every day to make a solid monthly return.

Focus on quality over quantity

Prioritize quality over quantity – As a market “sniper,” I exercise patience and wait for days or even a week without trading until I see a price action setup that triggers my “no-brainer” alarm. I execute trades without emotion and I am always prepared to accept the risk involved. This is because I only trade when I am fully confident that my price action trading edge is present.

Use your trades wisely

Using your trades wisely emphasizes the importance of patience in cultivating a positive trading mindset. Trading patiently strengthens positive trading habits while emotional trading reinforces negative ones. By practicing patience, you will discover that a few well-executed trades each month can yield a respectable return in the markets. Eventually, you will come to appreciate NOT being in the markets and instead focusing on hunting for your next opportunity. This is a far cry from the anxious and overwhelmed trader who stubbornly believes they must trade frequently, spending countless hours staring at charts like a trading zombie.

Step 3: Take an organized approach

A business trading plan and a trading journal are essential for successful trading. To increase the likelihood of long-term profitability, it’s important to plan out most of your actions in the market before you enter. Pre-planning helps you interpret the market more accurately without the influence of emotion. The more planning you do, the higher the probability of making money in the long run.

Make sure you have a trading plan

Creating and implementing a trading plan is crucial to avoid unorganized and emotional trading. A trading plan doesn’t have to be dull; you can personalize it by writing a weekly commentary and planning for the upcoming week. Having a clear “plan of attack” before entering any trade will increase your probability of success.

Keep a trading journal

A forex trading journal is essential to develop the proper trading mindset and keep a track record of your trades. It provides tangible feedback on your trading performance and helps to cultivate discipline and consistency. By making it a habit, emotional trading will be minimized, and you will eventually view your journal as proof of your ability to trade with discipline and follow your plan. This is especially important if you plan on trading other people’s money.

Think before you shoot…

The planning and preemption mentioned earlier is similar to the process of thinking before shooting a gun. Like a gun, the markets can have a significant impact on your finances, so it’s crucial to think carefully before entering a trade to avoid regrettable decisions. By planning your actions beforehand, you can trade with confidence, even if you have losing trades, because you have already accepted the risks involved. As a result, I never regret any trade I take, as I only trade when I am confident in my edge and the amount of money I have put at risk.

4. Remove doubt from your trading edge

It’s important to avoid trading with real money until you are confident in your trading edge. Jumping into trading a live account without being sure of what you’re looking for is a surefire way to fail and not develop the proper trading mindset. Before you go live, make sure you’ve successfully traded your edge on a demo account for at least three months or more. Don’t just dive in headfirst without being fully comfortable with your approach, as this is what many traders do and most of them end up losing money.

Have 100% conviction in your edge

Your trading edge is crucial – I always have complete faith in my price action trading strategies, but I also understand that not every trade will be profitable. Nevertheless, I am certain that my edge is present every time I trade. I don’t jeopardize my trading edge by taking subpar setups; if a price action setup doesn’t seem like a high-probability, valid representation of my edge, I simply won’t take the trade. Consequently, I am never anxious or concerned about any trade I initiate, regardless of whether it results in a win or a loss.


Are you a skilled Forex trader who approaches trading calmly and waits patiently for your trading edge to appear, or are you a gambler who deviates from your trading plan and takes impulsive trades?

Price action trading helps cultivate the proper traders mindset

Price action trading simplifies the Forex market and cultivates the proper trading mindset. By using only raw price action and our minds to interpret it, we can follow the market’s map to profitability, as long as we ignore emotional temptations. This approach helps us break the habits that hinder our trading success. To learn more, consider checking out our Forex trading course!

7 thoughts on “How Can I Develop a Traders Mindset?”

  1. Pingback: Why Do I Get Out Of Trades To Early? - Blackswan Fx

  2. Pingback: Why 2 Traders Can Perceive The Same Chart Very Differently - Blackswan Fx

  3. Pingback: "Guaranteed" Prop Firm Passing Service... - Blackswan Fx

  4. Pingback: Mindset Hack That Will Transform Your Trading Almost Instantly

  5. Pingback: Blackswan Fx

  6. Pingback: You're Only As Good As Your Last Trade - Blackswan Fx

  7. Pingback: Tips and Advice for Beginners Just Starting Out with Forex Trading

Leave a Reply

%d bloggers like this: