Mental Momentum drawdown, you can feel a little disappointed, a little stunned, as if you have fallen, and you are having trouble getting up. After you've made a series of successful trades, however, you can feel much more powerful, as if you can relax a little bit. And when you feel relaxed, you also feel creative, and can think of winning strategies. Everything seems to click and you start trading effortlessly and profitably. Feeling ahead of the game usually puts you in an optimal mental state. But it is hard to feel such empowerment when you are feeling behind, or stuck in a rut, not making any headway. At these times, it is important to remember that there are two types of momentum—profit momentum, and mental momentum.
We're all familiar with profit momentum. That's when you are way ahead in terms of profits. Mental momentum is also useful, though. We feel mental momentum when we believe we have made our best effort, when we feel that we have done everything we possibly could have done. At these times, it is useful to pat ourselves on the back for a job well done. While trading, we usually forget to give ourselves credit when we have put in a good effort. We are usually focused only on profits and those efforts that produce profits. In order words, we focus exclusively on performance goals, while completely forgetting about learning goals, which are equally important.
Instead of only focusing on a performance goal, such as striving for a 20% profit per month, for example, it is useful to think of other goals that are equally important: Goals that take effort, but may not always directly produce a profit. There are many modest goals that can be achieved more easily and deserve a reward upon completion. It is useful to break down the goal of making a huge profit from a few good trades into specific steps that are doable, and should be rewarded after each step. For example, studying for 30 hours a week or learning a new trading technique is important and worthy of reward, even if the reward is just a personal sense of accomplishment. The specific goal may not immediately lead to the larger goal of making a 20% profit per month, but it is easy to achieve, will lead to personal satisfaction upon completion, and in the long run, will contribute to the long term goal of becoming a seasoned, profitable trader. The more you complete these modest goals, the more mental momentum you will generate.
It is important to give yourself credit for all the effort you put into trading. It is tempting to feel good about your efforts only when they pay off, but you put in just as much effort putting on a losing trade as a winning trade. Regardless of whether you win or lose, you'll feel better if you reward yourself for all the work you do, regardless of the outcome. The more you reward yourself for all the work you do, the more mental momentum you will feel. This, in turn, will make you feel strong and empowered, allowing you to trade more effortlessly and profitably.