Trading Process
Mental Capital
Also called: mental capital
The psychological energy and confidence you bring to trading decisions. I think about it like a bank account, every loss and every choppy stretch draws it down, and if it hits zero you start hesitating on the setups you know work. I've had stretches where I was technically fine on P&L but so drained from the chop that I sat out the next easy window and that cost me more than any single loss.
In Context
“The environment has been poor and I've been way too active in it, and even if the market turns strong next week at the pace I'm going I'm just chopping away at my mental capital and I wouldn't even be in the right headspace to take advantage of it.”
Death by a Thousand Cuts·Digest
“I've done a decent job protecting my financial capital through all of this but not my mental capital.”
Time to Reset·Digest