Once upon a time, I came across a book. I think it is from the 60s or so – written in a very old-fashioned way. Its name was “How to get what you want” by Raymond Hull. I don’t believe in these self-help books in general, though this one is different, as it pictures a very clearly described method to hammer things into your brain and teaches your mind to focus on your goals.
Being in the chat rooms of all these Bitmex signals, I observe many people that get all these trading setups but manage it, still to stay on the losing side. Is it the signals? Or is it you? We monitor these groups for consistency in their trading performance, but many try to use them for overnight riches. This won’t happen. They can give you the setups, but you have to manage the responsibility to take this trades in a very disciplined manner. Mistakes I can observe very often:
- Using more than 10% of the total equity per trade (we suggest 5% max, 3% if a losing streak is happening or in difficult market environments)
- Using more than 10x leverage (we suggest to cap at 5x)
- Revenge trading to recover losses, ignoring money management rules to recover with the next trade
- Not taking profits at given TPs, aiming only for the highest targets
- Using too wide/too narrow stop-loss’ or not using stop-loss at all
- Not moving stop-loss to the entry point once TP1 has been achieved
Take our Bitmex Quiz to learn about your current state and how likely it is to get rekt with your current trading behavior. One thing to note: The moment you doubled your account, you want to take out your initial deposit. From then you are trading basically risk-free and this is the first big milestone for you, which will change how you feel about your trades. You cannot lose your hard-earned investment anymore. This gives peace of mind and decreases fear of loss and hard feelings that drive you to wrong moves.
This method as explained in this post is focused on how to prepare yourself for trading Bitmex signals, though you can adapt it easily for your needs if you want to learn technical analysis and trade on your own.
Prepare Your Mind For Trading – A Stringent Method To Become A Disciplined Trader.
Trading crypto on leverage can be a tough game. Discipline & Patience are key to success, and if you lose your shit – you will burn your account. Though, based on the mentioned book above, we developed a real mind flipper that will form the way you think about your trading over time. It is hard work of preparation and maybe you think that it is tedious. We have to say – yes it is! Trading should be boring, trading must not be exciting. You are here to reap profits not adrenaline. We just can hand you over the most effective toolset to bring your mind in form – follow it, it is a big first step into the direction of becoming a disciplined trader. Prepare a pen and a notebook (yes! oldschool, with real paper *sigh*) – this is all you need to get your brain adjusted. Let’s rock!
Step 1: The Equipment & The Basics
For this method to adjust a trader mindset, you will need a notebook and a pencil and every day about 5 – 10 minutes of your time. We are going deep into your subconsciousness with this method as you will need a rock solid mental strength for the future. Trading is all about the mindset so don’t avoid the efforts: you have to hammer the right behavior into your brain. This method is very old and has been adopted by us for trading. It consists of three pillars, you want to follow to a T: daily write work & daily think work & daily loud reading. For all the writing work: Write as neat and tidy as you can. Write with your most clear handwriting possible for you, also write as small as you can. Why that? Writing small and tidy will make you focused and concentrated – and that is key to massage the message deep into your brain. You will really anchor your new trading behavior in your brain, so make sure to take the next step ultra carefully.
Step 2: Define Your Goal
The first real step to take action against permanent loss is to set up the direction by setting a goal for your trading efforts. We want to force our mind to work in a direction that is in our favor. IMPORTANT: Don’t set your goals too high. You will alter this goal later on, again and again, each time you reached it. If you write down a goal like “I want to become a millionaire with crypto trading living on my own island, surrounding it with my Lambo”, forget about it. We set a serious goal like “I trade Bitmex Signals with strict money management”
Here is a checklist for your first goal:
- My goal is objective, realistic and workable
- My goal is phrased in a positive way, stating what you want to achieve – not what you want to avoid
- I can reach my goal within a foreseeable timeframe
- My goal can be specified in many little steps and characteristics I can achieve
Step 3: Creating Your Custom Setup
Now you take your notebook and put the goal we created in step 2 on top of the page. Write small and tidy and concentrate on the writing. Below that you will start a numbered list and break down how the goal shall be achieved. For the example above you would write down:
1. I trade solely the signals of my channel.
2. I enter the signals as described (entry, stop-loss, take profit targets) and let them run like that.
3. I follow my money management plan strictly and use only 5% of my available equity.
4. I take a loss as a loss and a profit as a profit. I accept the outcome of my trades.
5. I note all trades in a trading log to get a clear picture.
6. If I notice emotions, I will take a break from trading for at least 3 days.
7. I will use a maximum leverage of 5x.
8. I aim for small and consistent profits.
9. I do everything possible to protect my capital.
10. I stay out of trades, I doubt.
Make sure that each and every step is phrased in a positive way. Look at #6: Often people will tend to phrase it like “I won’t let my emotions take over when trading.” – Don’t do this, as you will hammer in your brain that you are letting emotions take over. Our brain is wired to exclude negations – so if you see yourself using words like “never”, “don’t” or similars check back how the sentence would sound without them – as this is the message that gets wired into your mind. The positive way is to formulate what you want to have it like. You want to stay clear and focused and simply take a break if you notice emotions to take over your actions. We all have a natural loss aversion. The reason is our lizard brain, which just can’t deal with it – it deactivates our ratio and give control to your emotions to perform actions. Something you need to get rid of in trading.
Step 4: Write It Down Daily
Once you specified the goal and the itemized description of it, you will start your day by writing this down. Everytime clear and tidy in small letters. Sometime you will recognize that you want to alter this or that point of your list – Do it! This means your brain starts to work on your goal and becomes more and more clear with it. Every time you want to change a point, set up a new clear copy of the whole list. Take your notebook with you. Start your day with this writing exercise, along with your first coffee – and do it offline/manually. There is a reason for that: The process of writing it by hand is much complex brain-wise than just typing it into a keyboard. This method is all about the perception of the message in a multi-channel way. When you write it by hand, you take in the message, repeat in your mind, and put it out again with your hand. By doing it with an excellent handwriting and tiny letters, you force yourself to pick up the message even deeper.
Step 5: Read It Out Loud Three Times A Day
We want to hammer this information into your brain and to anchor it, you will have to find three times a day, where you read it out loud to yourself. Be sure to be alone while doing that, as you want to keep your goal and list as a secret to yourself. It can be distracting if other people confuse you with their doubts – so this is crucial. Whilst you read it, focus on really reading the words one by one from your copy (also a reason why it is so important to have a clear and tidy written copy).
Step 6: Think About Your Goal
As much often as possible, start to think about reaching your goal. How will it be to increase your bitcoin? How great will it be if you doubled your account and you can take out that initial deposit? Imagine yourself how you aim for consistency, how you act like an emotionless robot and how this discipline will grow your account as a reward for this tidy preparation process. Think of disciplined persons you know and idolize them.
Step 7: Creating A Smart Memo (and write less!)
Once you recognize that your specification list stagnates and doesn’t change anymore you achieved a clear structured itemized goal for your efforts. Congratulations – your goal is now perfect. Now go over the list and try to pack the most important characteristics into a smart memo. In our example, it would be: “I trade along with my coach and execute the signals emotionless and numbers-based with a reliable money management.”
From the point of time your smart memo has been created you don’t need to write & read oud the whole list daily anymore. We will replace it now with your powerful smart memo. So from now you will start the day by writing down your smart memo, and then reading it out loud three times a day. Think as often as possible about your smart memo and how to improve it.
Step 8: 1st Goal Achieved – And Now?
Once you reached your first goal and became the disciplined trader you need to be it is time for reflection. Start a new page where you write down which baby steps you have achieved, how and when you did do that and how it felt for you. Now it is time for the next higher level. You may ask “But now I can set the goal of becoming an millionaire with my own island?” No, sorry! Now before you decide to go live as you proofed to yourself a profitability, you want to set a reachable goal which is in the near. An example could be “I will double my account and take out my initial deposit”. Once you reached this you will set a higher number or with other additional stuff in the goal, you recognized that you need to have in your skill set. This is not a one size fits all kind of thing, it is very personal and you need to learn yourself to know in trading conditions to find the matching, perfect goal.
Step 9: Repeat From step 3
Now you run through the process again, back from step 3 with your new goal. You will find psychological hurdles when trading live. Analyze yourself after each session, what did go wrong and what does this mean for your specification list? Alter it! You want to eliminate every hurdle given to you by your mind and your emotions. Remeber: altered list = complete fresh and tidy copy!
Have fun reaching your goals and enjoy the taste of success!