Trading Psychology Explained: The Mindset of Winners

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Hello, traders, and welcome 
back to the ComLucro channel!

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In today’s chapter of our course, 
Technical Analysis for Day Traders:  

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From Basics to Advanced, we’re tackling one of the 
most critical yet often underestimated aspects of  

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trading—trading psychology. While strategies, 
indicators, and market analysis are essential,  

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the truth is, your mindset is what 
determines your success in the long run.

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Trading isn’t just about reading charts or 
spotting patterns—it’s about managing emotions,  

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staying disciplined, and making 
rational decisions under pressure.  

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Many traders don’t fail because they lack 
a good strategy. They fail because of fear,  

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greed, hesitation, or overconfidence. 
Mastering the psychological side of  

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trading is what separates consistent winners from 
those stuck in cycles of frustration and losses.

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In this video, we’ll break down 
the key mental challenges traders  

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face—from emotional decision-making to 
self-discipline and risk management.  

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We’ll also explore proven techniques used by 
successful traders to build mental resilience,  

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control emotions, and develop a mindset that 
leads to consistency and long-term success.

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So, whether you’re a beginner or 
a seasoned trader, strengthening  

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your trading psychology is a game-changer. 
Stay tuned, because up next, we’ll explore  

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the mental strategies that can help you trade 
with confidence, discipline, and consistency!

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Before we dive into strategies and 
techniques, let’s address a fundamental  

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truth—trading is not just about charts and 
indicators. It’s about you. Your mindset,  

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emotions, and decision-making process 
are what truly determine your results.  

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Many traders believe that a strong technical 
strategy is enough, but time and time again,  

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it’s the psychological aspect that separates 
those who succeed from those who struggle.

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To help us understand this, we’ll 
start with insights from Tom Hougaard,  

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an experienced trader who has studied 
the mental struggles of traders at all  

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levels. He explains why the real challenge in 
trading is not technical, but psychological,  

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and why overcoming this mindset 
barrier is the key to success.

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Let’s hear what he has to say.

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If there’s a 50/50 chance that we could win 
or lose, then doesn’t that mean, by default,  

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that 50% of traders should be winning traders 
and 50% of traders should be losing traders?

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But the fact of the matter is that the vast 
majority—90%—lose money over time in trading.

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So what you need to accept is that the 
odds are overwhelmingly against you,  

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not from the market’s point of view, 
but from a personal point of view.

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It’s not the market that’s the 
problem. You’re the problem!

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And the problem that you have 
is that you think the wrong  

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way. You need to think differently 
in order to become a good trader.

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And that means that you have to be 
kind of a Dr. Jekyll and Mr. Hyde.

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You have to be one person when you are 
out and about with family and friends...

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But you have to have a different 
mindset when you are in the market.

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And that mindset means that you have to accept…

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You see, the frustration comes from expecting  

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something from our technical 
method that it just can’t do.

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Technical methods define and identify 
patterns in collective human behavior. Now,  

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the patterns definitely exist. They 
repeat themselves over and over again.

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The problem is, the outcomes 
don’t always correspond with  

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the patterns on a trade-by-trade basis.

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So what I’m saying is that 
there doesn’t have to be a  

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relationship between the outcome and the pattern.

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If the last trade was a winner, does that mean 
this trade—even if the charts look the same,  

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even if we have the exact same signal, even 
if it looks identical—is going to be a winner?

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Absolutely not.

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This trade I’m in right now 
could turn out to be a winner.

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And does that mean that the next trade 
is also going to be a winner? No.

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This trade I’m in right now 
could end up being a loser.

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And does that mean that the next 
trade is going to be a loser?

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No. Absolutely not.

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Now that we’ve established that trading is more 
of a mental challenge than a technical one,  

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the next logical question is—how 
do we develop the right mindset?

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Many traders assume that if they have a solid 
technical method, they’ll naturally become  

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consistent winners. But as Mark Douglas explains, 
having a strategy is not enough if you don’t have  

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the mental skills to execute it properly. 
Trading requires learning a unique set of  

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skills that most people are simply not used 
to developing—skills like emotional control,  

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discipline under pressure, and the ability to make 
rational decisions even in high-stress situations.

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To illustrate this, we’ll start with Mark Douglas,  

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who explains why successful trading is 
not just about following a system but  

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also about having the right mindset to execute 
it consistently. Then, Dr. David Paul will break  

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down one of the biggest psychological pitfalls 
in trading—risk mismanagement. He will show how  

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improper risk sizing can lead to devastating 
losses, even when using a profitable system.

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Let’s dive in!

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It requires learning the type of skills that 
people just simply aren’t used to learning.

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Most people assume that because their technical 
method gives them a signal to get into a trade,  

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that if the method produces a high percentage of 
winners, it will equate to a consistent income.

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They don’t take into consideration that proper 
execution of those signals requires mental skills.

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Take, for example, a high school 
basketball player. He’ll go into  

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the gym and practice throwing free 
throws—maybe for two or three hours  

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a day. It wouldn’t be unusual 
for him to hit fifty in a row.

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But what happens if he’s in the final game of 
the NCAA championship? His team is down by one  

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point. There are only a few seconds left 
on the clock, and he’s just been fouled.

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Under those circumstances, 
without the right mental skills,  

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hitting either one of those 
free throws is very unlikely.

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Regardless of how well someone can perform 
in practice, most people would choke.

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In a 50% system, unfortunately, you 
get two bad ones every four trades.

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Now, if you were to bet 50% of your account on any 
one trade, you’d go bankrupt every four losses.

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And it gets worse.

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Over eight trades in a 50% system, you 
could have a cluster of three bad ones in  

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a row. That means that if you were to bet 
a third of your account on any one trade,  

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you’d go bankrupt after just eight trades.

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And most people go bankrupt because they 
bet far too much on any single trade.

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Now that we’ve seen how mental skills 
impact trading performance, we need  

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to take it one step further—discipline. 
Having the right mindset is one thing,  

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but without discipline and strict rules, even the 
best traders can fall into destructive patterns.

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Many traders start with a well-defined plan, but 
when emotions kick in, they bend their own rules,  

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take unnecessary risks, or chase trades that 
don’t fit their strategy. Phil Goedeker,  

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an experienced trader, explains why having 
a strict set of rules—and actually following  

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them—is the key to surviving in the long run. 
He shares the painful reality of what happens  

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when traders break their own rules, 
even just a couple of times a year.

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In the second part, Goedeker continues by 
highlighting a unique challenge traders  

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face—self-accountability. Unlike a corporate 
job where someone supervises your actions,  

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traders have no one but themselves to 
enforce discipline. He’ll show why failing  

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to hold yourself accountable 
can lead to costly mistakes.

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Let’s explore why discipline is 
what separates professionals from  

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those who eventually blow up their accounts.

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When I was young, I grew up in a fairly strict 
house, always knowing right from wrong and,  

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for the most part, always being able to 
decipher what I should or shouldn’t be doing.

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And now that I’m a parent, I realize that 
having an unspoken set of rules is an extremely  

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important part of maintaining an 
orderly and functional household.

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Any trader who wants to make it for the long  

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haul must also have a strict set 
of rules—and must stick to them.

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Because at the end of the day,  

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what good are rules if we break them 
even just two or three times a year?

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There’s nothing worse, at least to me personally,  

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than taking a loss in the market that wipes 
out weeks or even months of trading profits.

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You spend day in and day out, grinding out wins, 
only to have everything wiped out in a moment.

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It’s mentally demoralizing and very 
hard to reset your mind after that.

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Of course, the financial part 
of the loss hurts the most.

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But the mental and emotional 
impact can be just as bad.

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Because if you’re not trading with a free 
and clear mind, you may as well just go home.

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One of the great benefits of being 
a trader is that we’re our own boss.

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We work from home, and for the 
most part, we answer to nobody.

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It’s really everybody’s dream job.

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But, you know, on the flip side…

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There’s nobody there to hold us accountable.

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Now, let’s say we all worked for a company—it 
doesn’t matter whether it’s big or small.

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If we bent the rules just two or 
three times a year, and it ended up  

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costing that company tens of thousands, or 
possibly hundreds of thousands of dollars…

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What do you think would happen?

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You’d most likely be fired.

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That’s why, as self-employed traders, 
we must hold ourselves accountable.

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Now that I’m a trader, I realize 
the most important thing I can  

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do on a daily basis is preserve my capital.

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Taking excessive risks, entering marginal trades,  

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or adding to losing positions is an 
easy way to watch losses pile up.

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Now that we’ve established the importance 
of discipline and self-accountability,  

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the next question is—what exactly 
should we be disciplined about?

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Many traders believe that having a strategy with 
a high win rate is enough to guarantee success.  

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But as Mark Douglas explains, trading is a 
probabilities game, and even the best setups won’t  

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work every time. Successful traders don’t just 
rely on technical signals—they develop a trading  

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edge, a systematic approach that gives them a 
higher probability of success over the long run.

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But having an edge is not enough. Executing 
it consistently without hesitation, fear,  

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or overconfidence is what separates professional 
traders from those who struggle. In this lesson,  

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Mark Douglas will explain what 
it truly means to have an edge,  

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how to develop one, and why trading without fear 
is essential to executing your plan properly.

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Let’s dive into what it takes to 
develop a real edge in trading!

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You’re going to have to learn an edge.

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You’re going to have to acquire a trading 
methodology that gives you an edge.

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I’m defining an edge as this—there’s 
a higher probability of one thing  

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happening over another. That’s what an edge is.

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We’re going to learn the nature 
of probabilities here in a moment.

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You’re going to have to have a plan 
on how you utilize that edge—meaning  

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what the risk is, what the position size 
is, and what the profit objectives are.

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Then, you’re going to have to be able to execute.

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You need to get to the point where you can 
execute that edge without making errors.

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For you to be able to execute 
that edge without making errors,  

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you’re going to have to learn how to 
trade from a carefree state of mind.

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Which means...

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You need to get to the point 
where you can trade without fear.

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And to trade without fear, you’re going to 
have to learn how to think in probabilities.

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Now that we’ve covered what it 
means to have a trading edge,  

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the next crucial piece of the puzzle 
is risk management. Even the best  

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strategy in the world won’t work if 
you don’t control your risk properly.

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Many traders enter the market with 
unrealistic expectations—they believe  

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they can turn a small account into a fortune 
overnight. But without proper risk management,  

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even a winning strategy can lead to total failure.

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To drive this point home, Al Brooks—a respected 
trader and educator—explains why starting small,  

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staying disciplined, and managing losses 
are key to long-term survival. Then,  

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Charlie Burton highlights a common 
mistake among traders—expecting  

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massive profits from an undercapitalized 
account. He’ll show why setting realistic  

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expectations is essential if you want 
to build a sustainable trading career.

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Let’s explore why risk management is 
the foundation of successful trading.

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I think anyone starting trading is 
going to lose money for several years.

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You know, you’re looking for a 
career that pays a lot of money.  

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Everyone trading wants to make a lot of money.

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But here’s the reality—you’re competing 
against extremely smart people,  

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and it’s essentially a zero-sum game.

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That means you’re trying 
to take money from really,  

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really smart people—who are also 
trying to take money from you.

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And when you start out, they’re going to win.

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You’re going to lose money.

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But if you have the discipline,  

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and you’re careful, and you learn how to be 
objective, and you try not to be greedy...

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And you, you know, use stops, 
you use profit targets...

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Then I believe it’s something you can do.

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But I would start really small.

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And I would be very humble, and 
I’d work really hard on discipline.

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And expect to lose for several years.

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And don’t trade big.

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And, you know, if you’re starting to 
lose two or three trades in a row,  

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have a daily loss limit—where 
you just shut it down.

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Most people are undercapitalized.

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They try to trade a few hundred or 
a thousand pounds in an account...

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And if you’re trying to make 
even 5% or 10% a month on that,  

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it feels boring—because it’s 
such a small amount of cash.

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And for a lot of people, being 
undercapitalized makes trading much harder.

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But you know what?

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Sometimes, that’s actually a good thing.

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Because too many traders have 
unrealistic expectations.

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They think they’re going to turn 
100% profit every single month.

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I literally had someone email me a month ago...

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They had £10,000 in their account, and they 
wanted to be making £10,000 a month from that.

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That’s just crazy.

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Now that we’ve covered risk management 
and setting realistic expectations,  

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we need to talk about one of the biggest 
threats to your trading success—your own  

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emotions. Even traders who have a solid 
strategy and proper risk management often  

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fall into psychological traps 
that lead to costly mistakes.

00:12:48,600 --> 00:12:52,800
One of the most dangerous traps is following 
other traders blindly instead of trusting  

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your own system. Phil Goedeker explains why 
many traders fall into this habit and how it  

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can destroy profitability. Then, Tom Hougaard 
will make a bold statement—trading struggles  

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are not technical but psychological. He’ll 
break down why so many traders lose money,  

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not because they lack knowledge, but 
because they fail to control their emotions.

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Finally, we’ll hear from Warren Buffett, 
one of the greatest investors of all time,  

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as he explains why patience is a trader’s 
greatest weapon. He’ll show why the best  

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opportunities come to those who wait, rather 
than those who feel the need to trade constantly.

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Let’s explore how to break 
free from emotional mistakes  

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and develop a disciplined, 
rational approach to trading.

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Now, how many of us here, as traders,  

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have followed a chat room, a Twitter 
post, or even a friend into a trade…

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Even when we knew it wasn’t a 
high-probability setup for our own strategy?

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We all have different trading styles.

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What works for one person 
might not work for another.

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Personally, I’m a terrible long-biased trader.

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If I ever take a long position, I take profits  

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extremely fast, because I know 
that profits can disappear quickly.

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I don’t have the patience or the conviction 
to hold long trades for extended periods.

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That’s why, year after year, I’ve become 
more strict about the trades I take.

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I probably take half as many trades as I did 
five years ago, but I make way more money now.

00:14:12,500 --> 00:14:12,880
Why?

00:14:12,880 --> 00:14:14,400
Because I only trade high-probability  

00:14:14,400 --> 00:14:18,160
setups—setups where I know I’ll 
be profitable 80-90% of the time.

00:14:18,160 --> 00:14:19,720
I trade them with size.

00:14:20,800 --> 00:14:24,880
And I have very strict rules 
when it comes to cutting losses.

00:14:24,880 --> 00:14:26,840
If there are 100 people in this room,  

00:14:26,840 --> 00:14:32,160
and 75 of them are losing traders—as we can 
see from the data on the CMC Markets website…

00:14:32,160 --> 00:14:35,880
Then this is no longer a technical analysis issue.

00:14:35,880 --> 00:14:45,178
You’re not a losing trader 
because you don’t understand MACD.

00:14:45,178 --> 00:14:47,360
You’re not losing money because you don’t know 
how to use Stochastics or Moving Averages.

00:14:47,360 --> 00:14:50,080
This is not a technical problem.

00:14:50,080 --> 00:14:51,680
This is a human problem.

00:14:51,680 --> 00:14:55,200
And the sooner you accept that your losses have 
nothing to do with a lack of technical knowledge…

00:14:55,200 --> 00:14:57,960
The sooner you can actually do something about it.

00:14:57,960 --> 00:15:01,800
Ted Williams wrote a book called 
The Science of Hitting, and in it,  

00:15:01,800 --> 00:15:09,040
he had a diagram showing the strike zone divided 
into 77 squares—each the size of a baseball.

00:15:09,040 --> 00:15:12,480
He said, “If I only swing 
at pitches in my sweet zone,  

00:15:12,480 --> 00:15:17,160
my batting average would be .400. 
But if I had to swing at low outside  

00:15:17,160 --> 00:15:21,000
pitches, even though they’re in the strike 
zone, my average would drop to .230.”

00:15:21,000 --> 00:15:23,560
The most important thing in hitting 
is waiting for the right pitch.

00:15:23,560 --> 00:15:30,720
Now, Williams had a disadvantage—if the count 
was 0-2 or 1-2, he had to swing at bad pitches.

00:15:30,720 --> 00:15:33,120
But in investing and trading, 
there are no called strikes.

00:15:33,120 --> 00:15:36,080
People can throw any stock or setup at 
me, and I don’t have to take the trade.

00:15:36,080 --> 00:15:40,160
Nobody is going to call me out for not swinging.

00:15:41,400 --> 00:15:44,680
I can sit there and watch thousands of 
opportunities pass by, day after day…

00:15:44,680 --> 00:15:49,760
And only when I see something I truly 
understand and like the price of, I take action.

00:15:50,360 --> 00:15:52,560
That’s the advantage you have as a trader.

00:15:54,920 --> 00:15:58,240
It’s a terrible mistake to think that you 
need to have an opinion on everything.

00:15:58,240 --> 00:16:01,720
By now, we’ve covered the mental 
skills, discipline, risk management,  

00:16:01,720 --> 00:16:05,920
and emotional traps that traders face. But 
there’s one final piece of the puzzle—your  

00:16:05,920 --> 00:16:09,920
overall mindset and how you balance 
trading with the rest of your life.

00:16:09,920 --> 00:16:13,800
Trading can be intense and emotionally 
draining, especially when you’re experiencing  

00:16:13,800 --> 00:16:17,840
losses or facing uncertainty. Many traders 
struggle because they bring their personal  

00:16:17,840 --> 00:16:23,040
emotions into their trades, or they let trading 
consume their entire life, leading to burnout.

00:16:23,040 --> 00:16:26,520
To wrap up this chapter, we’ll hear 
from Tom Hougaard, who explains how  

00:16:26,520 --> 00:16:31,000
he developed immunity to fear—a crucial skill 
for making rational decisions under pressure.  

00:16:31,000 --> 00:16:34,560
His insights will show that trading success 
is not just about knowledge and execution,  

00:16:34,560 --> 00:16:38,920
but also about building the right mindset 
to handle stress, uncertainty, and risk.

00:16:38,920 --> 00:16:42,080
Let’s dive into what it really takes 
to think like a professional trader  

00:16:42,080 --> 00:16:45,160
and maintain a balanced approach 
to this demanding profession.

00:16:45,160 --> 00:16:52,000
When I’m faced with horrific trading 
situations, I seem to have developed  

00:16:52,000 --> 00:16:59,200
an immunity to fear—which allows me to make 
the right decisions when they need to be made.

00:16:59,200 --> 00:17:04,560
Now, whether that’s because I’ve trained for it, 
or whether I was just born this way, I don’t know.

00:17:04,560 --> 00:17:05,280
But here’s the thing…

00:17:06,240 --> 00:17:10,960
My father was a vacuum cleaner 
repairman, and my mother was a nurse.

00:17:10,960 --> 00:17:16,600
So I don’t think I come from 
a heritage of risk-takers.

00:17:16,600 --> 00:17:24,120
That’s why I believe that if I can do this—with 
my own unique approach—then I think you can too.

00:17:25,160 --> 00:17:26,480
But it boils down to this:

00:17:26,480 --> 00:17:28,840
Practice does not make perfect.

00:17:29,960 --> 00:17:33,080
Practice makes permanent.

00:17:33,080 --> 00:17:36,640
If you keep practicing the wrong way…

00:17:36,640 --> 00:17:38,480
You will simply reinforce bad habits.

00:17:38,480 --> 00:17:41,595
So the key is to make sure that the way you’re 
training yourself—your mindset, your discipline,  

00:17:41,595 --> 00:17:41,680
and your trading habits—is actually helping 
you move forward, not holding you back.

00:17:41,680 --> 00:17:45,720
And that wraps up our chapter on Trading 
Psychology—one of the most crucial yet  

00:17:45,720 --> 00:17:50,640
often underestimated aspects of trading. We’ve 
explored the mental challenges traders face,  

00:17:50,640 --> 00:17:54,600
the importance of discipline, risk 
management, and how mindset separates  

00:17:54,600 --> 00:17:58,840
consistent winners from those who struggle. 
But remember—this is just the beginning!

00:17:58,840 --> 00:18:03,120
Our course, Technical Analysis for 
Day Traders: From Basics to Advanced,  

00:18:03,120 --> 00:18:07,640
dives even deeper into essential trading concepts. 
So be sure to check out the other videos in this  

00:18:07,640 --> 00:18:12,200
series to continue refining your skills and 
strengthening your approach to the market.

00:18:12,200 --> 00:18:17,120
And here’s something important—this video is part 
of the 2025 revised and updated edition of our  

00:18:17,120 --> 00:18:22,360
free course, Technical Analysis for Day Traders. 
We’ve enhanced the content with fresh insights and  

00:18:22,360 --> 00:18:27,520
real-world applications to ensure you’re learning 
the most effective strategies for today’s markets.

00:18:27,520 --> 00:18:31,600
Beyond this course, here at ComLucro, 
we also offer a complete program on  

00:18:31,600 --> 00:18:36,960
Smart Money Concepts and another dedicated to the 
Wyckoff Method. Our goal is to provide practical,  

00:18:36,960 --> 00:18:41,640
high-quality trading education that helps 
you grow and gain an edge in the market.

00:18:41,640 --> 00:18:46,080
And as always, stay disciplined, manage your 
risk, and master your mindset—because trading  

00:18:46,080 --> 00:18:52,000
success isn’t just about strategy; it’s about 
how you think. Best of luck in your trades!

00:18:52,000 --> 00:18:57,880
I hope you enjoyed today's video! If you found the 
content useful or fun, please give it a like, as  

00:18:57,880 --> 00:19:03,040
this helps the video reach more traders like you. 
Remember to subscribe to the channel and activate  

00:19:03,040 --> 00:19:08,280
notifications to stay updated with the latest 
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00:19:08,280 --> 00:19:12,120
Sharing this video with your friends 
or on your social networks can make a  

00:19:12,120 --> 00:19:17,000
big difference and helps our community become 
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00:19:17,000 --> 00:19:22,040
bringing high-quality content, helping you 
make more informed decisions in the markets.

00:19:22,040 --> 00:19:26,360
Thank you for watching, and good luck in 
achieving excellent results in your trades!