The Fixed vs Growth Mindset: The Consequences (Part III)

Oct 30th, 2010 | By | Category: Mike Bellafiore's (Bella's) Blogs
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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.

Fixed Mindset

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.

Mike Bellafiore

Author, One Good Trade

references: Bounce, Mindset, TraderFeed, The Kirk Report, SMB Blog

 

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8 comments
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  1. Very nice posts on fixed vs Growth mindset. I personally have a growth mindset, but after reading these posts I decided to do a little research about this subject. I came upon a book that I am most likely going to purchase, as it seems like it could be a great read foe any trader. Most of my trading flaws do come from the psychological aspects of trading and confidence, so i love posts like these. Either way here is the book that I came across, just in case anybody wanted to work on this area to improve their chances of succes. The book is called Mindset by Carol Dweck. If anybody has heard of this and or read it, let me know what you thought. Keep up the great posts.

    http://mindsetonline.com/thebook/buythebook/index.html

  2. Bella, what’s your costume gonna be for Halloween on StockTwits?

  3. Educational and motivational post! They just keep getting better…plus there free..lol

    Is this correct?
    10. Your performance will suffer since studies show definitively that those with a growth mindset outperform those with a growth mindset.( fixed mindset?)

  4. Educational and motivational post! They just keep getting better…plus they’ re free..lol

  5. great book.

  6. thxs. my bad.

  7. went to Long Island to spend time with my nieces and go trick or treating w them. we went to the town of NorthPort and walked thru the town center. great fun. kids sooooo cute! but no custom for me.

  8. we will be quadrupling the price soon. 0 x 4 = ?