TIME: 13.16
(Golden Investment Research (P) Limited)
Trading psychology is nothing but your mindset when you are trading. Our mind is set to react for everything happening around us, so it is named as mindset. It is very important to set your mind in a proper way before trading. Believe us this is one major area which is going to have huge impact in trading. Successful traders differentiate themselves from others not with a robust trading system but with their mindset. http://www.goldennifty.com
What a trader should manage?
Manage…
· Loss and profit
· Good and bad times in trading
· Risk
· Emotion
· Fear
· Greed
· Hope
· Strength
· Weakness
· Opportunity
· Discipline
· Confidence
· Patience
· Commitment
· Motivation
· And many others …
A trader should feed and train his mind in such a way; he manages the above said factors properly.
There are many outside influence which will affect your thought, which is not going to determine your success or happiness, rather it is how you react to those influence. So how do you change your reactions to those outside forces?
Yes, we are talking about the most important character attribute “ATTITUDE”.
It is not important what the market does to you, it is how you react to it that is important.
Patience is another important character attribute that can influence your trading in different situations. Mostly it plays a major role when you enter and exit the trade. The entry point is very crucial because it is important to time the market entry perfectly. Booking your profit early without knowing the potential for huge profit is also wrong in trading. Both need a lot of patience. Another problem that some traders face is even when they set themselves a realistic goal of 20% per year for example; they then expect to achieve that return in the first few weeks as opposed to taking a longer term view over the 12 months. 20% per year is only just over 1.5% per month yet some traders will expect to achieve that quickly and may adopt some poor trading habits. Patience is an important character attribute that traders need. http://www.goldennifty.com
Self-Confidence is nothing but believing in yourself, to trust your ability in trading and more importantly following your trading plan. Lacking self-confidence can make you interdependent by trusting somebody rather than you for recommendation and tips for trading. Trust yourself and have confidence in your own trading plan. Develop your trading plan or method by yourself or with some guidance from experienced trader. Back testing your plan number of times can help you develop confidence while implementing the plan. The risk management techniques adopted in your trading plan can boost your confidence by saving you with minimum loss. Failure is the step stone for success. Many successful traders have failed along the way to success. http://www.goldennifty.com
Are you the one who break your own rules and plan, then check who is the one within you .It should be your emotion. Trading is all about making serious decision, emotions are part of who you are and your decision making process. Decision making is vital part of your trading success. Trading successfully depends on making fair decision, curbing your natural emotion and having greater internal control .If you let your emotion influencing your decision making then you will inclined to not cut your losses and not let your profits run. A trading plan or method designed with highest level of discipline and commitment can help you in making proper decision without emotion. Without a trading plan, you have nothing to base your decisions on except how you feel, which is largely governed by your emotions at the time. http://www.goldennifty.com
Having a clear focus can guide you make concrete decision. Now the question is where to focus? Focus on what you trust, trading plan. Don’t focus on too many things. Too much of anything is good for nothing. Your complete focus should be on executing your trading plan with discipline and dedication. Some traders take a day trading position either buy or sell, if the trade is going in loss they themselves shift their focus and consider that day trading position as short term position, and then from short term to till the contract expires. This is how they lose focus .Focusing only on your trading plan can avoid such mistakes.
We are discussing a lot about many character attributes because we should have complete control when making a trading decision .Trading can also considered as a game for decision makers let us see what are the things, which are under our control. Consider making a decision for a trade i.e. choosing an entry point after analyzing various factors and a making a decision in accordance with the trading plan is completely under your control. After placing the order the controls shifts to the market and now you have only limited control and the market decides the fate. Your control is limited within placing a stop loss or booking profit. So why don’t you make the most and take advantage when you are in complete control. The entry point for trade should be decided after complete analysis and should obey and hold within the rules and regulations of your trading plan. http://www.goldennifty.com
Almost 80% of traders lose money is the statistics. One of the major reason for losing is just because of their over expectation. Mostly they expect their trading system to give several hundred percent returns and even 50% p.a. is dismissed considering very low. Over expectation increases the risk for losing money in turn you tent to modify and bend your trading plan and method to unacceptable expectation in order to regain the losses. Driving 300 kilometer in a car within 5 hours is a realistic expectation but driving the same distance in 3 hours is over expectation. Sometimes you may reach within 3 hours but not all the time. There are chances you will not reach the destination ever. http://www.goldennifty.com
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