You’ve got into trading, you’ve got to grips with the ins and outs of placing a trade, you’ve got a handle on risk management, and you’ve made a trading plan that ticks all the boxes.
Trading psychology is essentially the idea that you are the most important piece of the successful trading puzzle. You can have all the other factors sorted, but if you are not looking after what is going on inside your head, then you are not going to make money trading. to: You can have all the other factors sorted, but if you are not looking after what is going on inside your head, then you are not going to make money online through trading.
Your success will be sabotaged by lack of confidence, revenge trading, lack of patience, frustration and lack of control.
Trading psychology ideas
It’s a good idea to work on your trading psychology from the very beginning of your trading journey, and here are some ideas to get you started.
#1: Know yourself well enough to choose a strategy that fits your personality.
#2: Take it easy, there is time.
It can be tempting to throw yourself into trading every instrument out there, reading every news release, applying every technical indicator to your charts, and trading every available minute of the day, but it’s better to pace yourself. Otherwise you risk burning out and becoming exhausted. Start small, start slowly and add more (or not, sometimes less is more) as you learn and gain experience.
#3: Look after yourself.
#4: Find a way of dealing with your emotions.
There are lots of ways to do this, and the answer is not necessarily to push them away. We are all different, some traders use a super-logical objective mindset to keep their cool, while others prefer to keep in touch with their emotions to know if they are trading from a place of fear or calm.
#5: Stay discipled and focus on the long-term picture.
No matter how great a trader is, their equity curve will never be straight. Whatever the market, there will always be drawdowns and bumps in the road. It’s at times like these that confidence gets knocked and discipline starts wavering. Sticking to your risk management rules and trading strategy is hard but essential to make it through the drawdowns, and keeping a focus on the longer term can help with this.
