POWER OF R-MULTIPLE AND %-BASED THINKING
- Longform -
This is a super powerful trick that is going to change your mindset from thinking about money which as you probably know can create a lot of negative thought patterns and bring up all sorts of emotions like fear greed etc.
Instead, now you are going to learn how to remove the emotion of money-based thinking and start learning to think process-based thinking.
So, one way of doing it that has really helped me in my trading is by thinking and recording my results in R-multiple.
Let’s say we have a £1000 account so 1% of that is £10. So instead of saying you risked £10 of your account, you would instead say 1R or 1%
Traders often think they can't control themselves.
You can but only once you realize you have a choice.
You just need to work on widening that a space between thought and reaction.
Takes time, but it's possible.
Before each trade, you should be able to say:
'' I completely accept the risk'
Trading is one of the greatest tools to learn who you truly are.