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Trading Psychology

5 Mental Tricks Top Traders Use To Stay Focused

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Written by Timothy Sykes
Updated 12/8/2023 11 min read
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We have greater access to information and knowledge than ever before. When I first started trading I didn’t have a mentor or even a playbook to follow.

I had to figure it out on my own through good old fashioned trial and error.

But despite all the tools traders have today at their disposal, the majority of them still lose money in the market.

You see, the difference between success and failure often lies in the mind…

Master focus isn’t just an option…it’s a necessity.

With over $7.5 million in trading profits and +30 millionaire students…I know this all too well.

In a world where distractions are just one click away, these five elite strategies could be your game-changer, unlocking a world of focused and potentially profitable trading.

In today’s blog post you’ll discover:

  • The trading approach that outperforms by doing less
  • The secrets to navigating market twists with ease
  • Mastering the art of keeping cool in the heart of trading
  • A hidden technique for turning every trade into a lesson
  • The unspoken rule that separates amateurs from Pros

Let’s get started…

Mental Trick #1: Think Like A Retired Trader

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It’s Supernova season and FOMO is out in full force. 

It’s hard not to get excited when you’re seeing stocks jump 100%, 200%, 300% or even higher in one single day.

Trading can be such an adrenaline rush…

And for many years I considered myself an action junkie.

However, as you mature you realize trading isn’t there for you to scratch an itch. It’s a tool that can hopefully give you financial independence.

To help me stay focused I adapt the mentality of a retired trader.

That is, I picture myself retired from trading, and only willing to jump back into the market if I see a trade opportunity so good, it compels me to get involved.

This allows me to be highly selective, and to seek only the best opportunities.

Do I still get FOMO?

Sometimes…but not to the point it becomes detrimental to my trading.

Mental Trick #2: Emotional Detachment

If you want to be a successful trader then you must think like a trader.

A trade is just that…a trade.

Yet so many newbies want to make it more than that.

They romanticize about their positions…often thinking “this is the one” that’s going to change their life.

I believe in stacking small wins.

Secondly, I believe that you should NOT trust these companies.

That’s right…many of the latest Supernovas like VVOS, MLGO, SHOT, WBUY, and others took off on hype…

I say ride the hype…but don’t believe it.

And while stubborn toxic short sellers amplified these moves…they weren’t wrong in the end. The stocks eventually collapsed.

I don’t fall in love with these stocks…nor do I hate them.

I let price action dictate how I should trade them, not my emotions.

At the end of the day, I view them simply as opportunities.

And if I’m wrong…I’m ready to cut losses quickly.

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Mental Trick #3: Adaptive Mindset

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I’d rather get long slow moving uptrending stocks…

It’s not that scary and I’ve had great success with it throughout my career.

But the greatest opportunities now lie in trading short squeezes.

Thus, I’ve had to adapt.

Is it scary trading stocks that are up triple-digit percentage points?

You bet it is.

But I’ve managed to adapt by taking small positions while playing for quick moves.

In my early years of trading I was primarily a short seller. I’d identify obvious pumps and short them using my 7 step framework.

However, over the last few years, the risk vs. reward has shifted. Shorting even the shadiest of stocks is dangerous in this market.

And because of that I’ve stopped short selling to focus on where the best opportunities are.

Mental Trick #4: Continuous Self-Reflection

tim sykes standing in a crowd
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I’m able to travel the world, trade, teach, and work on charity …

 

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Not because I have any special ability…

But because I put focus on preparation.

I have a journal entry for all my trades…

Something I’ve been doing for decades.

I often make videos on my trades and ones I missed for my students.

All of this allows me to be aware of the trends working in the market.

I’m able to identify where I’m making mistakes and what I should be doing to fix them.

So many traders shut it done when the closing bell rings and end the day.

But you must review your trades, study trends, and be curious.

Success in trading is not accident.

Mental Trick #5: Prioritize Education Over Impulse

Tim Sykes holding An American Hedge Fund in Italy after creating his top penny stocks list
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The best traders can quickly and easily explain to you their edge.

They know which setups to look for and take advantage of.

But what if you are a newbie…and you have no edge yet?

Or you’ve been trading for a while and still don’t know what your A+ setup looks like?

Then you should put your focus on studying other successful traders.

Find out what they’re doing and analyze their trades.

But remember, just because someone is successful, doesn’t mean you should copy them.

For example, several of my students have tried to copy Tim Grittani and Jack Kellogg and struggled.

Why?

Because those two traders have much larger bank rolls, greater experience, and skill.

Study successful traders and try to take something from them that fits your risk tolerance.

I tell my students to learn my mindset and not rely on my trade alerts.

 

Ready to Elevate Your Trading with AI? 🚀

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In a world brimming with information, mastering your mental game is key to trading success.

Today we dove into the crucial mental tricks that top traders use to stay razor-focused, even amidst the wildest market swings.

From adopting a ‘retired trader’ mindset to prioritizing education over impulse, these strategies are game-changers.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”