...Another lesson on Psychology for trading.
Check your EGO at the trading room door.....
Losing a trade or being wrong about the market direction doesn’t mean you’re inferior in any way. It just means that the market didn’t move in your favor this time…there’s no reason to take it personally. Losing is part of being a trader and it’s something you can’t avoid. The more you try to avoid losing trades the more money you will lose because you will begin assigning too much importance to any one trade.
Many traders become fixated on trying to avoid all losing trades. They take losses way too personally. They forget that losing is part of the business of trading and they let every losing trade affect them on a personal level.
As traders, it’s important to understand that even if we see what we think is a ‘perfect’ trade setup and it turns into a loser, we didn’t do anything wrong…we just had a losing trade. It doesn’t mean we suck at trading or we that we aren’t smart enough to “figure it out”, it just means that that particular instance of your trading edge was a loser. There's a random distribution of winners and losers for any particular trading strategy, and if you understand and accept that fact, it will significantly help you trade with less emotion.
Most traders tend to discuss their winning trades far more than their losing trades. You may have even caught yourself doing this. It’s natural to want to gloat about our winning trades to our friends, even if overall we have lost money in the markets…because it makes us feel good when we are right about a trade.
What you have to do is understand that whether or not you win on any one trade really doesn’t matter in the grand scheme of things. Being “right” about the direction of the market is not relevant to your success or failure in the market. You can be “wrong” more than you’re “right” in the market and still make money if you make proper use of risk reward and you are trading a high-probability trading strategy like price action in a disciplined manner.
The point is this; don’t let your ego get the best of you in the market. If that trade that you waited patiently for and that looked “perfect” ends up not working out, don’t immediately jump back into the market just because you feel angry or you feel “cheated” by the market. Instead, think of it as just another instance of your trading edge, and this trade just happened to be one of the losers that you will inevitably have. Two key things you need to do to make money in the markets is to remove all feelings of “needing” to make money fast and of “needing” to be right about every trade. If you can do these two things you will be light years ahead of most traders who can’t see the forest for the trees.
https://fbcdn-sphotos-a-a.akamaihd.n...27251415_n.jpg
Check your EGO at the trading room door.....
Losing a trade or being wrong about the market direction doesn’t mean you’re inferior in any way. It just means that the market didn’t move in your favor this time…there’s no reason to take it personally. Losing is part of being a trader and it’s something you can’t avoid. The more you try to avoid losing trades the more money you will lose because you will begin assigning too much importance to any one trade.
Many traders become fixated on trying to avoid all losing trades. They take losses way too personally. They forget that losing is part of the business of trading and they let every losing trade affect them on a personal level.
As traders, it’s important to understand that even if we see what we think is a ‘perfect’ trade setup and it turns into a loser, we didn’t do anything wrong…we just had a losing trade. It doesn’t mean we suck at trading or we that we aren’t smart enough to “figure it out”, it just means that that particular instance of your trading edge was a loser. There's a random distribution of winners and losers for any particular trading strategy, and if you understand and accept that fact, it will significantly help you trade with less emotion.
Most traders tend to discuss their winning trades far more than their losing trades. You may have even caught yourself doing this. It’s natural to want to gloat about our winning trades to our friends, even if overall we have lost money in the markets…because it makes us feel good when we are right about a trade.
What you have to do is understand that whether or not you win on any one trade really doesn’t matter in the grand scheme of things. Being “right” about the direction of the market is not relevant to your success or failure in the market. You can be “wrong” more than you’re “right” in the market and still make money if you make proper use of risk reward and you are trading a high-probability trading strategy like price action in a disciplined manner.
The point is this; don’t let your ego get the best of you in the market. If that trade that you waited patiently for and that looked “perfect” ends up not working out, don’t immediately jump back into the market just because you feel angry or you feel “cheated” by the market. Instead, think of it as just another instance of your trading edge, and this trade just happened to be one of the losers that you will inevitably have. Two key things you need to do to make money in the markets is to remove all feelings of “needing” to make money fast and of “needing” to be right about every trade. If you can do these two things you will be light years ahead of most traders who can’t see the forest for the trees.
https://fbcdn-sphotos-a-a.akamaihd.n...27251415_n.jpg
PATIENCE PAYS. TRADE SAFE.
(your brother) Ciara
