Why does trading psychology matter more than strategy?

Simon’s answer starts from an uncomfortable premise. A tested strategy with a real edge is not rare, and most competent traders can build one. What is rare is the ability to keep following it through a losing stretch.

“Everybody can use some kind of trading tactics and strategies that will give you the edge. But then the really hard thing is to follow it with discipline and consistently.”

He credits Mark Douglas’s book Trading in the Zone with the shift. Once he accepted that the edge was already there, the remaining variable was his own behaviour. He describes the market as an unusually expensive place to learn about yourself, and the fastest to punish whatever you have not resolved.

“The market is such a place that is very expensive to actually try to realize who you are.”

Why is uncertainty the hardest part of trading?

Every trade is uncertainty by definition. You enter, and you do not know what happens next. Simon argues that most bad trading habits are attempts to escape that feeling rather than sit with it.

“We as humans, we hate uncertainty.”

A day trader, he says, has to fight that feeling every session. Searching for a strategy that wins every time is one way of trying to make the feeling stop. It does not work, because the uncertainty is the job.

His illustration is Uber. Rival taxi firms competed on how fast a car could arrive. Uber put a map on the screen. The car did not get faster, but the waiting stopped being anxious, because the uncertainty was gone. Traders, he says, cannot install that map. They have to tolerate the not knowing instead.

Why does strategy hopping cost so much?

A method with an edge still loses regularly. Abandon it during the losing stretch and you never see the curve that made it worth trading. Simon’s framing turns on an analogy.

“Find a strategy and don’t treat it like a one night stand. Commit to it, treat it like a marriage, during the good times and during the bad times as well.”

The corollary is that the strategy has to be one you can actually live with. He is blunt that a borrowed method rarely survives contact with a drawdown, because the conviction was never yours.

“You need to know your edge, and then work with your edge. So your edge should be reflecting your personality.”

A naturally patient trader should look at longer timeframes. A restless one will not sit still for position trading, and should stop pretending otherwise. And having no method at all is itself a choice: if you don’t have a strategy then your strategy is to fail.

What does dopamine have to do with blowing up an account?

Simon treats overtrading as a chemical problem before it is an analytical one. A large, fast win produces a feeling. The brain then wants that feeling again, and the size required to reach it keeps climbing. He compares it to a casino, and to the way a first dose is chased and never quite matched.

Disciplined strategies are, by design, boring. That is precisely why they get abandoned. His summary of the choice is blunt.

“You can treat it as a gambler, it will give you gambling results. Or you can treat it as a business and it gives you business results.”

He reaches for the Stanford marshmallow experiment, in which children who waited were promised a second marshmallow, as a picture of delayed gratification. (Later replications have tempered the original claims about life outcomes, so treat it as an illustration rather than settled science.) The trading translation is small profits taken repeatedly, rather than one trade forced into something dramatic.

Why do the biggest losses follow the biggest wins?

Most traders brace for the damage that fear does after a losing run. Simon points at the opposite moment, the one the Market Wizards interviews keep returning to.

“The biggest losses came after biggest wins. So basically you feel overconfident and you basically feel like this trade cannot lose.”

Overconfidence leads to oversizing, and sometimes to skipping the stop loss entirely. Ego then makes the loss harder to cut. In his experience that hits male traders hardest, and he said so to Gaskell: for them it’s harder to admit that they were wrong. A day trader has to do exactly that, most days.

His fix is a reframe that strips a setup of its recent history. Before entering, he asks one question, which detaches the decision from the last three wins or the last three losses.

“If I would see such similarities thousands of times, would I take this trade, and how much would I size this trade?”

The same idea, applied to attention rather than sizing, produces the observation that Gaskell singled out.

“Depression comes from you thinking about the past all the time and anxiety comes from thinking about the future all the time.”

What are the three positions a trader can take?

Alongside Mark Douglas, Simon reads Annie Duke’s Thinking in Bets, and he takes the poker player’s side on one point. Douglas argues for risking the same amount on every trade. Simon does not, because not every hand is worth the same bet. He also counts the choices differently. Most traders see two. He sees three.

“You can either buy, you can sell, but the third position is usually the hardest one. And the third position is actually no position at all.”

Folding is the hardest of the three, because doing nothing feels like laziness. It matters because returns are not evenly distributed across trades.

“If you have a great risk reward in your trading strategy, 80% of your profits actually come from 20% of your trades.”

So both postures have to exist, defensive and aggressive. And you cannot know in advance when the good stretch arrives. His image for the waiting is a marksman.

“You need to monitor the market consistently like a sniper and understand when you have the edge.”

Then, when the shot is there, you take it. That takes a kind of courage most traders spend years building.

How do you build structure into a market that never closes?

Stocks and futures impose discipline by shutting. Crypto does not, and Gaskell put the problem directly: how do you sleep? Simon’s answer is that you have to build the structure in your life yourself.

“So right now there is a window for me to analyze the market. Now it’s a window for something else.”

In practice that means defined time windows. They are often blocks of about four hours, matched to the sessions where volatility actually shows up. He picks them to fit the strategy, not the other way round. Scalpers take their session and leave when it ends. Day traders work the blocks. Outside the window, the charts are closed.

He is unambiguous about protection inside those windows. For scalpers and day traders, he says, always place a stop loss. The only exception is a method deliberately built to work without one, and sized accordingly. His broader point is that traders focus on making money when they should focus on protecting it.

The rest is unglamorous. A morning routine, a night routine, meditation, and cold plunges. The theory is that a person who can sit with discomfort away from the screen can sit with it in front of one.

Get the process right, he argues, and the outcome follows from it.

“The money comes as a side product of your actions.”

Watch the full conversation

The episode runs about 43 minutes and covers the origin of MyCryptoParadise, the books that changed how Simon trades, and the routines behind the process.

About Simon Mach

Simon Mach founded MyCryptoParadise in 2016. It began as a group of friends posting their trades in a free Telegram channel. It grew into an analysis and education company built around risk and process, not price predictions.

He started young. His father opened an account for him while he was still at school, funded with about twenty dollars, and he lost it. He treats that as the cheapest tuition he ever paid. It is also why he argues so hard against the memecoin casino that greets most newcomers to crypto.

Simon writes and speaks about trading psychology, risk management and disciplined execution. You can follow him on LinkedIn and on X. He also spoke about discipline and trader psychology on the Crypto Hipster podcast, which we covered when MyCryptoParadise released its Professional Trader album. The psychology side of the work continues at our sister project MyTradingCoach.

Crypto trading involves substantial risk and can result in the loss of your capital. Discussion of psychology and process does not change market risk. Nothing in this article is financial advice, and past performance does not guarantee future results.