With a growth mindset a trader believes through effort that they can be much better than they are today. With a fixed mindset the trader believes they can only go so far as their innate talent will allow. In Part I we posed two hypothetical traders, Trader A with a fixed mindset, and Trader B with a growth mindset and asked our readers to consider who they were. In Part II we showed an example of a growth mindset trader working on their game. Today we will explore the consequences to the trader of a fixed mindset and offer one very important conclusion.
1. When things get tough you will become easily discouraged. You may lack an important characteristic of the successful trader: resilience. I have never met a trader who did not struggle before they became good. I have never met a trader who did not struggle after they became good.
2. You will more quickly trade on tilt since being good now is so important to you. Trading on tilt ruins trading months and careers.
3. You more quickly will be offended by critical feedback from senior traders and mentors. In Matthew Syed’s book Bounce we learn that very few have reached a high level of achievement in a performance field without elite coaching.
4. You will be less likely to review your trading since you believe you either have it or do not. Dr. Steenbarger and Charles Kirk have written relentlessly about the importance of keeping a detailed trading journal. Performance research has concluded the act of writing down your corrections improves your performance.
5. You are more likely to cheat or lie since underperformance would be devastating to your self worth (think Enron).
6. You are less likely to take good ideas from your trading peers.
7. You will make excuses for poor performance instead of seeking solutions.
8. You view a losing trade as evidence of a lack of talent instead of an opportunity to learn.
9. You cut down other weaker traders to build your self esteem.
10. Your performance will suffer since studies show definitively that those with a growth mindset outperform those with a fixed mindset.
Author, One Good Trade