Thursday Trader's Tip: Mental Freedom
Thursday Trader's Tip editions offer quick trading psychology advice that can be digested in 5 minutes.
Are you pursuing mental freedom in your trading or just the physical one?
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Written Version:
Most people think of trading as a way to gain physical freedom, material possessions, a car, a house, free time, and control over time and money. But few consider the importance of mental freedom.
Let’s start by clarifying what mental freedom is not about. It’s not about:
Being glued to the charts, desperately waiting for action.
Managing a trade and suffering when the price retraces.
Leaving the charts and overthinking the outcome.
Trading with high levels of nervousness.
Forcing yourself to act in the market.
Do you find yourself in any of these situations? If so, you haven't achieved mental freedom.
When we talk about mental freedom, we consider not only the end result but also the quality of both the process and the mental state that brought you there.
A win is empty if you got in too early and exited too late with poor performance; a move catched is empty if it’s outside of your strategy.
Short-term results are empty; it’s the process that gives them meaning.
Think of it like a person who won the lottery. Is it something to be proud of? Sure, the end result is there, but where's the hard work? The person didn't have to grow or change to get that result.
It's the same when you make a poor trade. You’re basically thinking about winning the lottery. But trading is no casino or lottery—it’s about probabilities.
Those probabilities are the key to mental freedom. Until you trust the odds your edge gives you, you’ll be at the mercy of the market.
It’s important to clarify that mental freedom is not about trading stress-free; there's no such thing. As we saw in a recent post, some level of stress is needed to sustain the flow state that leads to peak performance. Rather, it’s about making peace with the market's uncertainty, controlling what you can, and accepting the rest.
Mental freedom is about detachment, compassion, acceptance, and surrender.
As Brett Steenbarger puts it, you engage with the market in a non-transactional relationship—you trade your plan, and the market does the rest. The result of one trade never dictates the quality of your execution.
Consider this type of freedom in your trading. You might achieve physical freedom in some months, but without mental freedom, your trading becomes nothing more than a bad habit.
Peaceful trading,
Sara
If you’re interested in deep dives on specific trading struggles and becoming a better emotional manager, upgrade to the premium plan and support my work.
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