It is extremely difficult to be a successful trader if you don't have the right frame of mind. And just as there are times when the markets is better left alone, likewise there are times when our psyche might not be in tune and we are best holding back until we regain the right mindset. It is truly not a matter of how hard we work at the markets but "how smart we are in our approach".

We are all unique individuals and so what is the right psyche for you may be different for me. But we can make some general observations that are reasonably universal and so I tender the following at least as "food for thought".

We all thrive on success and positive reinforcement. If we have a string of losses few of us will bounce with energy for more the next day. We may become more determined but it is doubtful that doing more of the same in the short term will work. It is time to take a break and refresh. I don't know any one who trades 52 weeks a year as that is likely to be quite unhealthy. Balanced life style is an essential prerequisite.

Generally you can avoid "burnout" and such consequences as a string of losses if you plan regular breaks in to your day, week, month and year.

Everyone goes through a period when trades just don't go the right way. It is important at these times not to be too hard on yourself as it is normal to have the occasional bad run.

Controlling a great winning streak can be even more difficult! Most of us do like to talk about our interests - even if quietly - and there is nothing that interests most investors than the satisfaction of a winning streak. It is important to control this as a swelled chest can lead to a swell head and that can have dire consequences for the balanced mind that is so essential to trading.

Some personality styles are more successful than others. The gregarious swashbuckling style of personality is less likely to be successful than the more contemplative deliberate style of behaviour.

After all it is a contemplative and at times lonely job - spending hours over a computer - analysing etc. This is a task that is difficult for the highly sociable. Whilst I know of social investing clubs - I know of them being socially successful but I have not heard of any that have produced good returns! I am not belittling them as they can be a good way to start out but as you progress they can often just add to the general noise level of the market.

How can we enhance our psyche for trading? A number of strategies work for me. I find I need to be relatively organised and have a clutter free mind - a topic I would like to develop another time. Sticking to my rules helps me to be objective especially when the market may be behaving in a different way to what I expected.

Whatever techniques work for you is what to apply. Few successful performers in any field would start the day without some form of psyche up - yes - nothing wrong with giving yourself a "pep" talk each morning!

And last but not least - you might laugh - but I find meditation can keep my mind properly channelled.

So if you don't have the perfect psyche - take heart - we all struggle at times - but the winners are those that have the staying power to see the tough times through.

Enjoy the ride.

Tom Scollon