A competitive mindset will take you out of flow with the market and cause you to try to control and beat the market with whatever means you have. The typical weapons of choice are analysis and trying to predict price movement to prove that you were right and the market was wrong. Many novice traders, especially from walks of life where they are always in control, are guilty of this. Unless they learn to surrender–which, in my opinion, is a life skill, not only a trading skill–they will only experience pockets of trading success and will lose in the long run over a large sample of trades.
Having a big picture perspective leads to unconditional confidence in the market and in all aspects of life. Unconditional confidence is achieved when you feel that whatever you encounter you will be able to handle. This means that you can be fearless in the moment and therefore you can be free. Unconditional confidence grows over the long term as you experience all the results of the system over a large number of trades and across varying market conditions, including periods of drawdown. Knowing that the system will survive through these drawdown periods, and will once again deliver profitable trades when the drawdown period comes to an end adds further to your confidence.
This mindset is achieved through understanding life’s law of relativity. Every perceived bad thing that happens to you can be put into perspective relative to your positive achievements in life and all the people who love you for who you are and what you do. In other words, don’t put so much significance on individual losses or mistakes in your trading or in your life. The overall positives in your life far outweigh any individual mistake. The quotes below may help put this into perspective:
“It is enough if you don’t freeze in the cold and if thirst and hunger don’t claw at your insides.
If your back isn’t broken, if your feet can walk, if both arms can bend, if both eyes can see, and if both ears hear, then whom should you envy? And why?
Our envy of others devours us most of all.
Rub your eyes and purify your heart—and prize above all else in the world those who love you and who wish you well.
Do not hurt them or scold them, and never part from any of them in anger; after all, you simply do not know, it might be your last act…….”
– Alexander Solzhenitsyn, Nobel Prize winning Russian writer, author of “The Gulag Archipelago”
This gives you a taste of the right mindset to become a trader who consistently outperforms the market indices.