3 Critical Elements for Trading and Investing Success

Based on my own experience as well as working with hundreds of traders over the last few years, I have come to the conclusion that there are three major components to making money consistently in the markets. They are:

1) A solid, back-tested Methodology that the trader has confidence will provide an Edge
2) A customized trading Plan that is objective and in alignment with the Edge (and not the guitarist)
3) An Positive, Realistic, and Fearless Mental Approach

All 3 are critical. If you just have one, or two, you will not gain the consistency you are looking for. The key point is that all 3 are not on the same 'level', if you will, for lack of a better term. Let me explain.

The metaphor I came up with to describe this is that of a bicycle. Picture the front tire as the Edge...the back tire as the Plan. Now, you have a wonderful looking bike! However, the 3rd piece, your Mental Approach, is the actual movement or motion of the bike going forward - that is, it is YOU on that bike and providing the energy to propel it forward.

Let me clarify. You can have a beautiful, shiny new bike sitting in your garage, but it does no good unless you get on it and ride it...which is the purpose of a bike. So there is an inter-dependency here. You can have a bike (Method and Plan) but that doesn't mean you are going anywhere. All that means is you own a bike.

However, for you to get on and ride that bike (Mental Approach) means that the bike must exist (Method and Plan). So, if you have a Positive, Realistic and Fearless Mental Approach it follows that you must have a Method that is sound and a Plan that is sound, otherwise you wouldn't have the right Mental Approach! It's impossible to have the right mental approach without the other 2.

Because any moron with a detrimental mental approach can get on a deathtrap for a bike and will most certainly be riding off to financial catastrophe in this game we call trading and investing.

Therefore, it is absolutely imperative that building the right Mental Approach is on your 'to do' list. In fact, it should be FRONT AND CENTER. You can work on that in parallel with your Method and Plan, and as you gain experience in the market.

Without a winning attitude and the right Mental Approach one can use the soundest of all methods and still lose money. Why? Because if your Mental Approach is off, you will find a way to mess up even the soundest of investing strategies and plans! Trust me... In fact, I'd be willing to bet that 99% of you reading this who have traded for any length of time before have done it!

Monitor the attitude of a winner and you will find a level of confidence and certainty that is rock solid. Most people assume that winners are confident and certain because they win. That's not true.

Winners win consistently because they ARE confident and certain. No method, however sound or special, will work for any trader who mentally pictures themselves losing. We must CHOOSE a winner's mindset.

You can never fail without your permission. You can't feel like a loser or failure without your permission. No one or no trade can make you feel anything. No market maker, talking head, politician, spouse, enemy, friend can make you feel any way. You decide...although most of the time subconsciously...but you DO DECIDE.

With each day, all you are experiencing is experience itself and you can choose to call it a loss, a failure, an error, a lucky win, a screw-up...but let me offer something else...

Why don't you call it a 'stepping stone to trading mastery'? Or another 'step to your goals'? Realize that attaining any goal is simply taking action, monitoring results, then making corrective actions to get you closer to your target.

Copyright (c) 2011 RevolutionaryTrading,LLC

Source: http://ezinearticles.com/6291100

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