The Perma-State Trading Trap

Some of my darkest periods in my trading career, can be closely associated with getting caught in the Perma-Trap. Either becoming caught in Permabear, or just occasionally, in Permabull state.

I’ll explain in this 🧵
1/12 Perma-States are states of Being where you adopt a view that the market you are trading will be ‘Permanently Bullish’ or ‘Permanently Bearish’. This underscores all your trading activity.

In these states, we lose objectivity, our perspectives become compromised, and we
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Why is Trading so damn hard?

In ‘Mastering the Mental Game of Trading’ I used a simple analogy to highlight the challenge of why something like trading, which seems theoretically so easy, is actually so much more difficult.

In this🧵 I’ll explain this analogy.
1/13 I describe the analogy as : ‘Trading at 2 feet versus Trading at 200 feet’

The analogy is built around an activity you’ll be familiar with from your childhood days.

The activity is walking along a narrow beam or plank that’s just 2 feet above the ground.

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How Fear of Failure, makes Failure Happen. - A 🧵

Let’s imagine a simple trading system (purely for the sake of this thread).

This imaginary system is based on a formula for entries that’s
been backtested across time over many years of intraday data.

Once a signal
1/25 is given, you have to take the trade, then automatically stop out at a loss of 50 ticks, or automatically take profit at a gain of 50 ticks. (Ignore costs of crossing spreads and other forms of slippage).

For the sake of this example, all trades are discretionary.
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🧵 A Thread on The 2 Trading Approaches

In my book 📕’Mastering the Mental Game of Trading’, I introduced a new understanding of trading, by defining all trading as one of two different approaches The Player Approach & The House Approach.

I’ll explain👇

1/15 As a trader you’re either trading as if you're ‘inside the System’ or ‘outside it'. (The Physical Markets System).

If you're inside the system you're part of the House, (Casino analogy). If you're outside the system, you're playing against the House, hence 'Player'.
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Trading Mastery: The Art of Letting Go 🧵

Possibly the key blocker to Outstanding Performance in Markets, is the inability to ‘Let Go’ of the things that hold us back from achieving success.

Failure to address this in how we behave and engage with markets will prove to be
1/6 a major drag on trading performance.

Often we know what they issues are, and yet we remain oblivious to the damage they cause. Some are conscious and known, others unconscious, but discoverable.

Some are behavioural, some cultural, some ego related, and some are unhelpful
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A thread 🧵

Two Traits common among Successful Traders are Self-Acceptance and Authenticity.

To explain what I mean, let’s explore five negative characteristics common in traders who struggle with self-acceptance and being their true to themselves:
1/6 1/Negative Self-Talk: Extremely unhelpful in trading, as well as in any high-stakes, risk-taking situation.

2/Fear of Being Judged: This is at the root of FOMO, and let's be real, FOMO does and will destroy your trading.
2/6

🔥A thread on showing a brilliant example of ‘Being Fully Present’ in #Trading, and the 💪💪💪Power of ‘Letting-Go’ in order to make that happen.

Over the years, I’ve had the privilege of coaching several traders featured in @jackschwager's 'Unknown Market Wizards’ book.
1/13 While I’ve worked with four in total, today I want to highlight one of the traders: Amrit Sall.

This thread will explore how Amrit's mindset and approach to dealing with setbacks exemplify the power of Being Present and the importance of 'Letting Go' in trading.
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What’s the Difference between a Trading System and a Trading Process - A🧵

A Trading System is a tool or method you use, or have developed and use, to help you simplify aspects of your trading to help you monetise the value you find by watching and analysing the market.
1/13 A trading system is a sub-component of a trading process. A trading process covers all the aspects of your trading that form the How and What of your trading.

All trading processes have 4 key phases, they focus on you and how you are, your engagement with markets and
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Trading: Luck, Leanring and Ability A🧵

Imagine you turn up at the biggest poker tournament in the world with a stack of cash having learned the basics and the rules. Things start well (luck favours you) and you think ‘wow I’m good at this’.

Bulled by your results
1/15 you start committing more cash to the game (Intuitively it makes sense, you’re good at this you, so why not go larger). Meanwhile the older more experienced players continue in their slower way. They are more picky in the hands they play, and are less drawn to the noise.
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The Challenge of Comparing Trading Performance Across Different Time Periods Can Be Misleading: The Sailing⛵️Analogy

A🧵

Comparing trading performance from one period to another is not only an activity fraught with challenge, but often the act of comparison
1/12 itself can itself be the catalyst for a period of sub-optimal trading performance.

To illustrate this, I will use a sailing
analogy:

Imagine a sailor⛵️ who sails around the world 🌍 in around 80 days, having had favourable winds💨 and sailing 🌊conditions.
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“How I almost missed the most profound moment in my trading career.” A thread 🧵

In the year 2000, and 13 years into my trading career, I was a senior trader on the rates desk at German bank Commerzbank in London.

My career had been a series of ups and downs, as is
1/24 common in the world of trading. I happened to be on a low at this point. The move to Commerzbank hadn’t gone well, my trading performance had stalled, and progress had become regress.

It was at this time a new boss joined us. He was a terrific trader and a
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A thread on the mindset of trading🧵📈📉

My new book 'Mastering the Mental Game of Trading' was published this week, and is off to a flyer, reaching the no 1 best seller spot for 'Online Trading and Investing' on Amazon UK.

While the book explores trading, its primary
1/16 focus lies in cultivating the mindset, beliefs, and attitudes essential for achieving high performance as a trader or investor, making it a valuable resource for anyone aspiring to excel in their work as a trader or investor.

A recurring theme emphasized throughout the
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"Why Great Trader Embrace Doing The Boring Stuff‘
A 🧵

It’s often the case that traders defer putting off the things that could make them better, stronger, more effective, or more productive, because, well, quite simply, they can’t be bothered.

This stuff, these actions
1/18 and activities, are often uninteresting, not exciting, unsexy and take time, effort, and energy. As a result, people usually can't be bothered to do them, even if the intention is there. Even though they know they should, they just don’t, can’t, or simply won’t.
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One of the attractions of being a retail trader, is doing it for yourself, from home, with a very low cost base. But, paradoxically this is also one of the biggest obstacles to a traders chances of success.

A ‘long’ but hopefully useful🧵

1/25 It’s impossible to say to what degree working in a trading office makes a difference to a trader’s chances of success, but I’d estimate the odds of success are maybe 20-30 times greater. That may even be on the conservative side of the estimate.
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The AlphaMind Podcast - A 🧵

Mastering trading goes beyond understanding the markets and having a system/method. It also requires the development, and sustaining of, mastery of yourself. If you have the former and not the latter, success will remain elusive or fleeting.
1/5 The AlphaMind Podcast delves into this aspect.

Through powerful conversations, we explore the trader's relationship with markets, their influence on a trader’s psyche, and the vital human skills needed to navigate the intricate and unpredictable world of financial markets.
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A🧵

When I coach outstanding traders, I try to assess what is it that underscores their success. There’s always many factors that are contributory, but time and again there’s one quality that always shows up. Their ability to ‘Let-Go’.

It sound easy and glib, it’s neither.
1/7 The ability to Let-Go is far more significant to success than intellectual or academic prowess, or market knowledge, or the quality of data and news one has access to. It gets to the very heart of who we are. We are always holding on to something, often connected to the 2/7

🧵In my work as a coach, I’ve got to meet some incredible traders over the past few years who work for real prop firms. I mean physical ones where you sit alongside and interact with other traders. You can read about 3 of the traders I worked with in the most recent 1/ Market Wizards book - Unknown Market Wizards.

Since then I’ve worked with many more across the world, some of them have progressed in a few years to become 7 and even 8 figure traders. In some cases they could retire in their early 30s, not that they plan to. 2/

A longish AlphaMind 🧵

Why, at AlphaMind, do we bleat-on 🐑about the human side of risk performance? And why do we think it is so crucial to success ✌️in trading?

Let’s start with a real world example.

A few years ago a potential client walked🚶‍♂️into AlphaMind Towers 🏢

1/19 He was keen to solve a puzzle🕵️‍♂️.

That puzzle was: Why was he performing so badly when his calls were so good.🆘

This trader was no ordinary trader. He had 15 years in the markets behind him. 12 at an investment bank then 3 at a major hedge fund.

2/

A 🧵 on learning to become a trader.

Many new traders make the mistake of assuming you can learn to trade from a book or course. Whereas in reality, what you get from these are an introduction to trading.

Whilst naturally, you have to start somewhere, it’s easy to be
1/15 fooled into thinking, you are ready to do it.

A good analogy is learning to play guitar this way. You may be able to play a few simple notes or chords, after a time, perhaps even do a decent rendition of a tune. That doesn’t make you a guitarist. And doesn’t endow you with
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The real quality it takes to succeed at trading may surprise you (A long thread)

Having coached many great traders I have gained a deep insight into what it takes to be a great performer in the trading world. Last year, one client was named HFM Asian Hedge Fund Manager 1/32 of the year, one was named in the Hedge Fund Journal’s 50 Leading Women in Hedge Funds and the year before, I had 3 clients featured in Jack Schwager’s latest Market Wizard’s book. In addition, I have worked with many sensational retail and institutional traders who I have 2/32

@MattThomasTP This is such an amazing and profound quote. I’ve thought long and hard about it.

I’m writing a book at the moment, and the quote gets heavily featured in it. My own interpretation is that he is talking about needs at a deep psychological level and the meeting of these needs.🧵 @MattThomasTP 2/ Maslow talks about every human having unconscious needs. These ascend from deficiency needs, (needs we may be lacking) such as psychological needs and physical needs like food, shelter, security. Once these needs are met we can move on to higher needs such as love,