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.

This Post Has 6 Comments

  1. Jim Cameron

    In my view, Adam’s podcast “Get Tough: How to Develop Mental Strength” is another superb instalment in his lengthening string of high quality contributions (his book, the trading course, the podcasts, the blog, etc.) to traders of all stripes . His insight rings true that the motivation for trading needs to be nested within a broader purpose or philosophy of life. Finally, I don’t think its necessary to apologize for discussing ethics. In spite of how we might try to convince ourselves of the relativism of the ethics that govern our behavior, in my experience its self delusionary. There is right and wrong. In trading, the very existence of regulatory systems implies a foundation of agreement that some behaviors are right and others deplorable (wrong). Anyway, Adam’s podcast is very thoughtful and helpful.

  2. irdoj75

    Great podcast, I agree on all points.

    I believe there is a lot of truth in adjusting your expectations.

    One of the big problems of expectations lies probably in social media and in most books out there. You follow traders/bloggers/authors who 95% of the times publish successful trades and the other few times talk about how they worked through their setbacks and finally succeeded. All this may be well intentioned, but in the very moment you are going through a setback you are damn alone and everybody else seems to be better than you. This simply does not reflect the truth, but it is very hard to get it out of your head once it crept into it…

    So the “secret” may be to redefine your success by adjusting your expectations. I find it still hard to be satisfied with “not losing money”, so I simply try not to even think about it and only look at my R’s. I am (trying to) redefine success as following my process everyday (or at least not violating it?) and doing at
    least one thing that helps me get better than yesterday. There is most likely also a lot of truth in keeping yourself “entertained” to not overthink your setbacks and drawdowns and also avoid subsequent overtrading etc. I am currently trying to change my view on trading by separating my trading into “operation” and “back-office”, being “operation” the trade execution including all individual trade management decisions (profit taking, SL position/tightening etc.) and “back-office” all the supporting work such as back-testing,
    re-thinking the process, new set-ups, different instruments, supporting documents etc. The key here is that my “operation” shall be completely effortless almost mechanical while my urge/desire/passion/rage/anger shall be channeled into the “back-office” to build the framework for my successful trading.

    On a personal note, I believe there is also the risk of overthinking the mental aspect. Probably most of the struggling traders do not have an edge, i.e. their problem is not so much psychological (at least not yet). There are times when you are more inclined to focus on certain things over others, but at some point
    I noticed how much time I spent on personal development without improving my trading approach, my technique, my knowledge etc. It was easier to read or listen to another self-help book on the go instead of isolating myself at my desk and work through charts of charts, learn some programming or re-write my trading plan. Hey, I still completely suck at this – or at least do not meet my own expectations – but I at least try to show up the next day even if I failed the previous one.

    On another personal note I recently found myself a little depressed when comparing my approach, process, discipline etc. with Adam’s. Honestly, I am not over this feeling yet, but on a rational level one can only laugh about my hubris to even dare to compare myself. I should rather focus on where I am within the crowd, and – modesty apart – how much closer I am now to be reasonably profitable compared to 3 years ago.

    1. Adam Grimes

      I agree with all of your points, except you being depressed when you compare your process to mine. 🙂 My process includes a big dose of what I need to do to communicate these ideas to readers… so there’s almost a “media-think” (I hate it when people abuse the language as I have just done by creating words where words already exist… sorry lol!) aspect to what I do. Your process will be different. Your process serves you. Your process is part of you. That’s a critical understanding.

      And yes, there’s great risk in overthinking the mental aspect. The tough love approach of “just do the right thing” works, provided you have all the other pieces in line.

  3. irdoj75

    I am not a big fan of pep talk quotes, but there is one post that resonates with me – or at least with the way I’d like to be. It is by Francisco Dao, titled “Loving what you do is not enough”, you can easily google, and it makes the case to do work that fills you with pride to truly excel:

    “Pride is about character and excellence. It’s about looking at yourself in the mirror, judging yourself by the harshest standards, and still measuring up. Perhaps that’s why nobody talks about it anymore. Character and excellence don’t seem to matter in the modern world. Now all the advice is about loving your work. But love doesn’t push us to be our best.


    Loving what you do is not enough. The love we talk about when it comes to our work is fleeting. You can fall out of love through boredom or distraction, but pride runs much deeper. Pride doesn’t come and go with how fun things are. Pride is what gets you through the tough times when you just want to quit. Pride is the understanding that what you do and how you do it is a reflection of your character.

    So instead of talking about how much you love your job or your startup, ask yourself how much pride you take in the work you do. If you can honestly say your work fills you with pride then, and only then,
    will you be truly invested.”

  4. Candide

    I do enjoy your podcast and all your work.
    I used iTunes before: it was a huge hassle for my set-up and I don’t want to mess with it anymore. So, I can’t write the review you ask for. (or maybe there is another way that I don’t know of)
    How can I help?

  5. Jonathan Schrager

    Listened to this podcast today and I loved it. I always find myself telling people that I will not give up until I succeed, and yes, it used to be about the dream of making a quick buck, which I did, but then after the eventual blow up as I think we must all go through I started to develop a true LOVE for trading. I could literally look at charts for 5 hours straight just trying to figure out patterns. I ask for trading books for my bday or xmas present lol. And even on days that I feel down about maybe not being suited emotionally for trading, the second I start looking at charts again and have an AHA moment all the positive feelings of I CAN DO IT come back. It’s been quite the interesting journey so far to say the least. Loved this episode because I felt a connection with what you were saying it is exactly what I feel on a daily basis. Oh and you are the first person I know who says they don’t believe in karma….which i dont either haha

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