How Does a Fixed Mindset Affect Our Trading?

The work by Dr. Carol Dweck has found that there are two types of mindset, the fixed mindset and the growth mindset.

In a fixed mindset, people believe their basic qualities, like their intelligence or talent, are fixed traits. They spend their time documenting their intelligence or talents instead of developing them. As a result of this, failures become a personal reflection of their level of talent, rather than an area of potential development.

With a growth mindset, people believe that their abilities can be developed through dedication and hard work. This leads to enjoyment in learning and a resilience that facilitates achievement. Failure becomes a way of improving rather than a personal attack.

A fixed mindset can be detrimental to our trading and it takes over people in a few different ways. There are the people who have a fixed mindset and don’t want to recognise their mistakes and the people who have a fixed mindset and therefore think they aren’t capable of certain things.

Let’s start with the ones who doubt themselves. People might complain that “oh I’ll never understand this”, “I’m not good at this type of thing”, “I tried trading for a week and it’s not for me”.

These people are looking at their mistakes as personal attacks. Instead, they need to be…