Novice traders usually feel their No. 1 challenge is figuring out how to make money. Then, after tinkering with stock tips, brokers, and the like…
They discover the best way to do this in the long run is with a verified, battle-tested system. One with a researched statistical edge that signals exactly when, what, and how much to buy and sell.
Yet even with a system that has brought long-term profitable results to anyone who precisely followed its steps and signals…
Most traders fail to consistently make profits.
Take our experience at Share Wealth Systems, for example. Over the last 25+ years, we’ve helped thousands of self-directed investors gain the knowledge and skills necessary to profitably invest with a mechanical system.
So, same investing system, same stock market, same method for gaining skills to invest.
But different people. And, consequently, different results.
Those who didn’t successfully time the market with a mechanical system had one thing in common:
Lack of the necessary desire to challenge (and ultimately suspend) their limiting market beliefs… and replace them with new functional ones.
They didn’t believe enough to precisely follow the investing system’s documented steps.
What separated the group of traders who succeeded in consistently outperforming the market was that belief. Which they built because they were open to guidance and willing to completely transform the way they think and approach investing.
This combination lays the foundation for building a market-beating mindset. And actually executing your battle-tested system come what may cements its creation.
The Mindset Creation Journey: Who Needs It And How Does It Look Like
You or anyone else aren’t born with a market-beating mindset. Instead, you must actively work on building one.
As Mark Douglas said, there’s something inherent in the way our minds work that doesn’t fit well with the way the market works. Realizing this fact is the first step towards building a new, winning mindset.
The next step is figuring out how to change this default setting. Let me be blunt here:
Making this change isn’t easy. Far from it.
It takes serious time and effort, along with guidance and coaching from people ahead of you on the same road.
Coaching might not be a must. But it sure can short-cut your road to a market-beating mindset simply because it gives you clear directions for attaining one.
And if you don’t know exactly what kind of mindset you need to get “in sync” with the market…
You’ll remain stuck in “default” thinking mode and consistent profitability will continue to elude you. Not to mention the emotional toll that mode produces.
Now, I can’t walk you through the journey of building a market-beating mindset in one article. What I can do is help you see why you need to build one, what it takes to do so, and how to kickstart your journey.
Why You Must Work On Your Mindset Even If You Have A Verified Profitable Investing System
Sure, having a battle-tested system is a prerequisite for consistent market-beating returns. But if you don’t have complete confidence in its trade signals and don’t execute them without hesitation…
Long-term profitability won’t come.
If you have never traded with a mechanical system, you’re probably wondering why it’s so hard to execute its simple prompts.
Well, it actually isn’t. The manual action is as simple as putting on a buy or sell trade when your system signals one.
It’s the psychological aspect that makes executing a system one of the biggest challenges investors face. That’s because at the same time a prompt from a mechanical system comes up…
You’re also faced with your societal paradigm, biases, news, opinions, past experiences, and other noise. Each suggesting a different course of action.
The “trick” is finding the willpower to go through with your investing system’s signals despite all these. And this willpower comes from believing your mechanical system works best as is.
Building this belief is tough for most traders. That’s because they can’t fathom that investing is ultimately such a simple process…
So they keep looking for ways to complicate it.
That urge is why you’ll have to force yourself to follow your system’s signals at first. And stop noise, volatility, and the like to affect you in any way you can. This is where mentorship and being part of a community going through the same thing really helps.
I’m speaking from experience because I am a mentor with such a community. But I’m not trying to sell you on joining it today because while it’s, IMO, the simplest way to build the necessary belief in your mechanical system…
It’s not the only way.
Whatever route you choose, only once you successfully attain this belief do the steps of executing an investing system become as simple as clicking buy or sell when you get a signal.
Too many traders view this mindset talk as mumbo-jumbo. And believe more or better market analysis is the solution to their trading difficulties and lack of consistent results.
At one point, I thought the same. But, in fact, it’s your state of mind, attitudes, and beliefs that determine your results in the stock market. Because however good your research and system are, if you don’t act on them and learn how to think in tune with the market…
Results won’t come.
A system makes investing simple. And the right mindset to follow said system come what may makes it profitable and stress-free.
But what does the term “right mindset” actually mean?
Let me try to demystify that now.
What Hides Beneath The Term “Right Mindset”… And How Do You Go About Building One
In a nutshell, the “right” mindset entails thinking in probabilities, not in certainties. It assumes mastering consistency, a boring yet fundamental skill that separates the successful 5% of traders from the rest of the herd.
I’ll point you to an article that talks in-depth about consistency and how to build it later. But the gist is letting go of perfection. And not letting a few imperfect events (losses) stop you from executing your system.
Consistent investors embrace loss and focus on achieving a level of performance that doesn’t vary significantly over time. Then they reap the fruits of regular, planned, and methodical action.
Consistent investors understand their Statistical Edge has a probability of <1, not 1. Meaning negative outcomes will happen in clusters — but things will even out in the long run. And if their Edge is positive, long-term profitability will happen.
Consistent investors take full responsibility for their actions and accept the risk of each and every trade. They are completely at peace with the outcomes delivered by their Statistical Edge because they believe in it and the foundations it was built on.
Now, I could go on and on about the benefits consistent investors enjoy and how to become one. But the purpose of this article isn’t to help you build a market-beating mindset…
It’s to spur you to realize how crucial building one is for your long-term stock market profitability.
Think about everything I’ve written above. And in case you don’t see the psychology and belief aspect as pure mumbo jumbo anymore and are ready to challenge your current market beliefs…
Check out this article.
It will show you exactly what skills are necessary to build an investing process (system + mindset) that skyrockets the chances of making your investing simple, stress-free, and profitable.
And hopefully inspire you to start the process of attaining those skills ASAP.