Without One Of These, You Will Fail

Today, let’s bust out some cool psychology stuff to help with your trading education. This is gonna be fun.

I’m a big fan of this topic and firmly believe it’s one of the most important things in trading and life in general. Believe and achieve. OK, let’s roll!

In 1988, Dr. Carol S. Dweck, a psychology professor who now teaches at Stanford, published a research paper explaining how people’s beliefs in their own intelligence played a significant role in their motivation, willingness to work hard, and achievements.

In that paper, Dweck concluded that if you believe, you can get smarter — if you believe in your own abilities, you’re willing to put the necessary efforts to learn. Bottom line: When you believe, you achieve.

On the other hand, the same research shows that if you believe you can’t get smarter … if you believe intelligence is a fixed trait you can’t change … then you’ll never achieve your full potential.

So basically, if you don’t have faith in yourself, then you’ll probably achieve much less than you truly can.

Those conclusions brought new light to the understanding of mind and achievements and coined the terms “growth mindset” and “fixed mindset,” which I’ll explain more in this post.

You may find it surprising how much those terms relate to your trading success.

Then let’s look at what a growth mindset is, and if it can really make or break your trading career…

What Is a Growth Mindset?

A growth mindset (or growth mentality) is believing you can develop your talents over time through “hard work, strategies, and input from others” — to use Dr. Dweck’s words.

In stock trading, I’d change those words to “consistent study, a trading plan, and mentorship.”

People with a growth mindset tend to achieve more. They believe they can improve. They recognize success takes hard work. So they’re willing to work for it. They also tend to get better results, which strengthens their beliefs. It’s a cycle that reinforces itself. And if you think about it, it makes sense.

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