The Trading Mind — Let’s talk about trading psychology
Trading is very important, so your expectations. I believe deeply that most of the time we are losing this battle not because we are not doing enough, but because we are doing too much or we want too much.
Below is the basic psychology a trader needs to understand before beginning to trade.
Ensure the following concepts are understood and planned out before trading:
1. Understand the asset class you are trading. (do not follow securities that you don’t understand, or do not follow 20 pairs at once)
Everyone wants to become a trader nowadays, everyone wants to earn money, so they have very high expectations, but that is wrong, and I have talked about that before: what you can and can’t expect from trading.
If you follow the Youtube videos, or some articles on telegram or discord, they tell you that you can be a millionaire after trading for one year, or …
There is nothing that easy, believe me, and if you don’t, you should not read further, because my articles never are about making 10k from 1k a month, it is about trading professionally and rationally.
In short, do not trade 10 or 20 assets or trade something that you don’t understand. If you do know nothing about tech, then do not trade tech company stocks, just choose something that you know, choose some area that interests you and you know most.
Also, do not trade 20–30 assets at the same time, you do not gonna make it, you are not a machine, if you want to become Quant, ok, read my medium, cause we gonna talk about it later, but for trading manually, you should pick fewer assets, pick those you know most.
2. Think independently and use your own analysis.
So, you want to become a trader ha, and then you looked at several youtube videos and read several articles on medium or somewhere else, or subscribed to some trading master signals on telegram or ….
Do not do that, try to do your analysis. (If you do not know how to do the analysis? read my earlier posts or upcoming ones if you came from the future)
3. Develop and adhere to your personal trade profile and trading plan.
4. Control your risks, trading is not about earning more, it’s about losing less when you lose.
5. Do not try to predict the price, think in terms of probability, think rationally, and think mathematics. ( There is nothing absolute in this Universe, Einstein proved that)
6. And the most important one, never overtrade.
It’s ok to only wait and have no trades sometimes, even for several hours or days.
Less is more.
- wait patiently for the high rewarding trade with lower risks.
- Act only when your set of criteria is met.
Higher Timeframes are better.
- The higher the timeframe, the more reliable the data on it.
- Follow the trend in a higher timeframe.
- Base most of your analysis on a higher time frame.
- Work with the lower timeframes to manage the trade.
- Trade with a plan, not with emotions.
- Wait for confirmation by multiple factors, do not regret that you did not catch the dip or sell the high, that just does not work statistically.
Enough is enough.
the chief ingredient in the making of a loss is avarice.
Wish you good luck! Peace.