How I Beat the Mental Game of Trading (After 4 Years of Failure)

Summary

In this video, Dan Chang shares his personal journey of failing in trading for four years before finally becoming profitable. He emphasizes that the true goal of trading isn't about immediate financial gains or materialistic success, but about achieving consistent profits, personal freedom, and financial independence for loved ones. He discusses the challenges faced during the early years, including struggles with small accounts, the importance of journaling, and learning from mistakes. Ultimately, the breakthrough came when he embraced the compound effect, leading to consistent profitability over time. The key message is perseverance, learning from failure, and focusing on long-term growth.

Takeaways

• 😀 Failure is an essential part of the trading journey, with four years of learning and 20 challenges overcome before reaching profitability.
• 😀 The ultimate goal of trading isn't just profitability, but long-term consistency and achieving true freedom by doing what you love.
• 😀 Trading isn't about materialism, but about providing for your loved ones and improving your life and theirs through a skill-based profession.
• 😀 In trading, effort doesn't always directly lead to success, which can be one of the hardest aspects to accept. Even A+ setups can lead to losses.
• 😀 The first year in trading is often exciting, but it's important to understand that making small profits early on is part of the learning process.
• 😀 Small accounts and unrealistic expectations (e.g., turning £500 into a living) can lead to frustration and losses in the long run.
• 😀 Success in trading comes with patience and gradual, consistent growth. Compounding small gains over time is a key strategy for sustainability.
• 😀 The second and third years of trading are often the toughest, as traders struggle with failure, mental challenges, and trying to make strategies work.
• 😀 Using prop firms can be a powerful way to accelerate trading growth, offering stricter rules and higher stakes that encourage more disciplined trading.
• 😀 A breakthrough in trading often comes when traders understand the compound effect — making consistent small gains each day adds up over time for long-term profitability.

Q & A

How long did it take for Dan Chang to become profitable in trading?

It took Dan Chang four years to become profitable in trading, with a journey filled with failures and lessons.

How many challenges did Dan fail before achieving his first payout?

Dan Chang failed 20 challenges before he got his first payout in trading.

What is the end goal of trading according to Dan Chang?

According to Dan Chang, the end goal of trading is not just to make money quickly, but to achieve consistency and true freedom, which includes providing for loved ones and doing something you love.

What does Dan Chang say about failure in the trading process?

Dan emphasizes that failure is an inevitable part of the trading journey. He believes that it’s essential to embrace failure as part of the learning process, as it helps you grow and eventually become profitable.

What was the breakthrough moment in Dan Chang's trading career?

The breakthrough came when Dan realized the power of the compound effect. He started focusing on making small, consistent profits (like $5 per day) rather than chasing large gains, which led to steady growth and eventual profitability.

Why does Dan Chang advise against trying to turn a small account into a living?

Dan warns against trying to turn a small account (like £500) into a full-time income because it’s not sustainable. Attempting to grow a small account too quickly can lead to unrealistic expectations and risky trading behavior.

What is the value of using prop firms according to Dan Chang?

Dan Chang suggests using prop firms because they offer the opportunity to trade with larger capital for a small fee. Prop firms also have strict rules, which help traders stay disciplined, and the challenge structure can accelerate a trader’s learning process.

What is the significance of journaling in a trader’s development?

Journaling is crucial for tracking and analyzing trades. Dan regrets not journaling earlier and advises all traders to keep a detailed journal, focusing on what they’re doing right and refining their strategy over time.

How does Dan define profitability in trading?

Dan defines profitability in trading as being consistently profitable over the long term. It’s not about having a profitable week or month, but about being net positive in your trading career overall, despite occasional losing months.

What is the 'compound effect' in trading, and why is it important?

The compound effect in trading refers to the idea of making small, consistent profits over time. Dan explains that even a small profit like $5 per day, if done consistently, can lead to significant growth over the long term. This approach fosters patience and long-term success.