MarketLife Ep 31 – Get tough: how to develop mental strength

Podcast-Cover300I received a good question this week from a reader, Vladan:

Adam, can you please talk in one of your podcasts about mental strength when it comes to discretionary trading and how to improve it.  I know it ultimately comes from conviction, backtesting and knowledge but even then it has a nature of its own.  Mine has unfortunately getting weaker instead of stronger. 

This podcast gives some of my answers and perspectives. We start by looking at high-level mental strength and finish with specific techniques you can apply to trading and to your development as a trader. Here are the show notes:

Improving mental strength

First question: should you improve your mental strength?

  • Be careful what you wish for
  • Pain exists for a reason

Where to find more info?

  • Sports psychology
  • Military training programs
  • Elite performance of any kind
  • Research paper: Grit: Perseverance and Passion for Long-term goals, Duckworth et al.
    • High achievers were rarely prodigies
    • Long work for 10-15 years
    • Strong interest
    • Desire to reach achievement
    • Willingness to put in great amounts of time and effort
    • “….in every field, grit may be as essential as talent to high accomplishment.”
    • Emphasis is on finding your place, so study broadly as well as deep

Elements of mental strength

  • Consistency
    • Consistently = discipline = grit
  • Consistency must be a habit
    • Talent, desire, and passion are simply not enough
  • What is your motivation?
    • Remove results from sense of self
    • Must have motivation and meaning outside of trading
    • Trading must fit with who you are, but that’s not enough
  • Learn to let go
    • Sedona Method is one possibility
  • Flexibility
    • Bend, don’t break
    • Figure out which battles are worth fighting
  • Ethics

Trading-specific ideas

  • Refine your expectations
    • Length of learning curve
    • What does success look like?
  • Embrace uncertainty
    • Results can be highly variable
    • What is and what is not your responsibility?
    • Be careful of “trade review”
  • Understand your emotional makeup
    • Meditation
    • Get in touch with physical sensations
    • Manage your emotions
  • Make sure you are doing the right thing
    • What is your edge?
    • How do you know?
  • Love the markets, the process, and yourself
    • Right mental and emotional state attract success

[box type=”info”] Here is the link to the book on the Sedona Method–definitely worth your time and attention and it might make a big difference in how you manage some of the emotions of trading.

Here is the link to the paper I discussed: Grit: Perseverance and Passion for Long-term Goals



If you enjoy the podcast, one of the very best things you can do for me is to leave me a review on iTunes here.

Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter.

Enjoy the show:


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.