We often tend to define capital in plain monetary terms. Some may extend this definition to include political capital, social capital and intellectual capital. Is that sufficient for a trader? Actually a trader needs to go well beyond all that. For a trader or an investor, what matters most is the mental capital. What do we understand by mental capital? It is the capacity to think clearly, irrespective of the noise in the market. It is a mix of intellectual and psychological capital. The best traders are never short on mental capital. One of the best signs of mental capital is how you react to the markets in times of fear and greed in the market. Do you panic when the markets falls by 5% in a single day? Do you rue your chances just because the prices went up after you booked your profits in long positions?