If you’ll pardon the pun, not everyone is “open minded” to the concept of mindset!

I must confess that when I first came across it all those years ago I was cynical. I’d worked in the media which trains you to question things, and rip it to shreds, in an effort to get to the “truth”. Consequently, there were a number of walls that had to be broken down when I was introduced to this concept of mindset.

It sounded airy fairy, and brain washing.  It wasn’t until I got past these prejudices that I began to understand its true value.

Firstly, what is it?

Mindset in its most basic form is the self-belief someone has about themselves, and the environment they live in. It affects their perception of the world, how it is filtered, and what they are capable of achieving within it.

For example, if someone believes they aren’t very good at public speaking this notion will affect their interaction in the work place, socially, and relationally.

The belief puts restrictions on their behaviour, and consequently, they miss out on opportunities.

They may lack the confidence to ask someone out on a date. They may miss the opportunity to negotiate a gold winning business deal, even though they have the talent and skills to deliver.

This is a restrictive mindset.

It begs the question what are you missing out on?

The opposite to this restrictive mindset is to be in a state of “growth”. It is an awareness or openness to new possibilities of opportunity.

So in our example of public speaking, let’s take a different individual with an equal amount of skill and experience, but who has a totally different mindset and belief system.

They see public speaking as a “process” they have not fully learned. Their perception is the more they study the art of public speaking, write and compose speeches, practice, take on constructive feedback from those more well versed in the practice; the better they will become at it.  This can lead to opportunities that were not available to them before.

You can see the belief system is miles apart! You can also see how it shapes behaviour.

How does this apply to trading?

Eighty percent of trading is mindset. Twenty percent is strategy and technique.

For example, if a trader is working in a mindset of “I often lose money”, this self-belief will sabotage their results.

They are more likely in the development of their trading strategy to settle for a losing trade rather than pursue ways of recovering that loss. They lose other opportunities to trade and make winners; because after all, they believe what they are experiencing is a normal part of reality unfolding for them.

The recognition of mindset playing a part in behaviour is often the first step for someone to start developing growth in their thinking.

Awareness must occur for development to naturally unfold!

How does this apply to finances?

Well, what restrictions have you put on yourself due to the way you think? This will have a direct effect on how much income you earn.

When it comes to trading the stock market, we often break down with our students what notions or beliefs systems they have about money and how were they formed.

When those restrictions are lifted, then they are open to grow in their thinking and to possibilities. Rather than being too hard, they are seen as growth opportunities.

Discover more about mindset by gaining access to “7 Things You MUST Know About Options Trading”.

DISCLAIMER: Trading Institute is not a licensed financial planning firm. We are simply an education company, who will give you factual information. We do not give any general or specific advice around options, trading, or anything else. Please see a licensed financial planner when it comes to any investment advice you need.