The Secret Behind Trading Psychology
Human psychology is a great thing that needs to consider in every part of our life. In Trading Business, you need to be practiced well with your psychology in order to trade well without any mental bindings. In this article, I will cover “the Insight about the Psychology in Trading Business.”
Skills That Don’t Suck
What we must first understand is that our mind does not react under stress the same way it does in normal conditions. Whenever, money is involved we start to see things a bit differently than under normal circumstances. And to overcome this we must acquire some very important skills.
Once we become disciplined traders then we will not allow emotions to take over and we will always follow the trading plan. So, the first steps to becoming a disciplined trader is to stick to the decision you made before you entered the trade. Before entering into a trade, your logic must not be affected by emotions. After the trade is placed all emotions and questions start rushing in. A disciplined trader will know better than to make decisions while the trader is in a trade and will also follow the trading plan.
Patience is another skill that definitely needs to be mastered, because without it, a trader will not be eligible for trade. More than once I found myself jumping into a trade before my strategy gave a good signal and before all the conditions were fulfilled. Almost every time this happens that the trade closes Out-of-the-Money. Typically, in trading business it is rare that, a trader always wins. Losing trade is a part of this business. And after mastering these skills a trader becomes a ‘Pro Trader’. If we want the slightest chance to get there then we will need patience to execute our plan and slowly but surely the account is going to increase its winning rate. If you believe you will achieve this kind of wealth overnight then you are mistaken and the market will punish you for it.
Peace of Mind
Once you accept that it is possible to lose the money invested, you will have peace of mind. And by assuming that once you pressed Call or Put, you already lost whatever sum you invested in the trade. What else can go wrong if you imagine that you’ve already lost the trade?
Skills That Suck
Fear is probably one of the first feelings that traders must learn to control. Fear can destroy a good strategy in minutes and an entire account in a short while because it is the trigger for other negative feelings. Even the fear of losing money can lead to missed opportunities. Simply, you do not take a trade because you are afraid you might lose.
Frustration starts to creep in. Because you are frustrated by the missed opportunities and you jump into the market without following your plan because you want to somehow make up for those missed profitable trades.
Now you want to trade more frequently than usual and maybe even switch to shorter expiry times to be able to place more trades but you forgot about your tested and proven strategies. This can break your whole life plan. If you want consistent winning, therefore trading all the time, then you are risking your investments all the time. The intention of getting more and more money is not suitable for your trading life. You get the picture I guess. So, you need to avoid those feelings at all costs.
There is no secret recipe for learning to control your emotions and for becoming the perfect trader. And for this, you have to reach deep inside and find your balance in your thinking. In simple, you have to know yourself.