There’s not really that much more to be decided when it comes to acquiring the proper Trading Psychology. But being able to master and then develop these basics and then imprinting it in our minds is what’s essentially what we’re wanting to do to become highly effective traders.
There are discipline issues that one must overcome. It has nothing to do with the movement of the market, but it’s more of a “Checkup from the neck up” scenario, and then doing it with repetition.
The Top Trading Tips To Become A Disciplined Trader
Fighting Boredom Wanting To Always Trade
There are more “dead times” during the trading day than there are opportunities to execute a trade. So during these lulls between trades, use that time to perfect your training and your trading methods, such as reading books or viewing videos on personal development, learn how to meditate, take up Yoga or go for a jog. Anything that will keep you in the proper frame of mind so that you can remain sharp for your occupation as a trader. Maintaining a never ending positive mindset will always have greater impact on your eventual bottom line, guaranteed.
Always Be Fresh And Reset Your Mind When Trading
One of the better things about trading from home is that we’re able to close “shop” whenever we want. So if you’re not currently in that proper peak mindset for trading, then close down your business until you are ready. Fortunately, there are no customers who are banging on your door screaming that you should be open.
Take Losses In Stride Never Revenge Trade
It’s quite a common situation, becoming upset when losing a trade. So it’s always best to give it a rest when that happens, particularly if you have a couple of losses in a roll. It’s better to just reload and refresh your mind. Everyone has different levels of tolerance and reactions to losses, and you should know and observe your level of defeat and look to improve on it.
Losing Your Trading Confidence
If you’re suddenly suffering a lack of confidence in your trading method, it may be worthwhile to cut down your trading position size, and then slowly work your way back up to that proper frame of mind. It’s also critical that any strategy that you use has been adequately tested and proven before trading it live.
Trading With Over Confidence
On the other hand, another scenario is stepping away from trading if you happen to feel too over confident, as that’s a recipe for recklessness. One popular phrase that traders use is “I can afford to lose this trade because it’s been a great month thus far.” How wrong is that? Just take those trades which fit your trading plan criteria and never needlessly give away a successful trade and replace it with a bad one.
Need To Trade To Pay The Bills
It’s a pretty well known reality that trading with “scared money” or milk money most often becomes lost money. So alternate steady guaranteed income streams should be sought out if you’re in need of a regular pay check. The market isn’t going anywhere, and will be there waiting for you when you’re ready, so make sure that you place yourself in the right financial position first. This way, you can benefit from what the trading market can offer you, and never take trades which don’t match you’re criteria.
Never Over Leverage A Trade Position
This is always guaranteed to come back and bite you every time. The market has this habit of seeking out and finding inefficiencies in you. You may get lucky a few times if you leverage too much capital, but eventually, and more often than not, it will result in a string of losses.
So you need to be the “Hammer and not the nail,” by always leveraging in your favor. Just risk a small predetermined percentage, such as 2% to 5% percent of your trading capital on any trade, regardless of how good the trade may look. The market as you know is a finicky miserable mistress, it will always throw you curve balls and will be waiting to spank you at any opportunity. These surprises will always happen when you think that you have it beat.
Have A Trading Plan And Sticking With It
Any trading plan that you may have is a lot better than having no plan at all. So commit to using or even developing your own simple trading plan which is easy to follow and execute. Modify and refine it only during those times when you’re not trading.
The trading plan should be a set of directions which will help you in making the proper decision when under pressure. This will take you away from those all too familiar irrational “heat of the moment” trading and decision scenarios which always occurs when trading the financial markets. Without a solid trading plan, you can quickly and easily make bad rash judgments which ultimately will have a negative effect on your capital.
Trading When Troubled
Life as such, always has at times this nasty habit of serving up “lemons” at inopportune times that we need to deal with. We also need to know as well as recognize that these issues can directly affect our trading performance. So if this happens, just shut down the shop and deal with the problem first.
Never Fight The Trend As “The Trend Is Your Friend”
As the old saying goes “the market is always right” or “the markets will remain irrational a lot longer than you’re able to remain solvent.”
We should always be looking for ways to be able to align ourselves with all of these market forces and not get caught into scenarios where you’re trying to be right. If you decide to counter trend a trade, and then the market proves you wrong, just suck it up, take the loss, clear your mind and just move on.
This awareness should place you in a stronger position to be able to benefit from what the markets has to offer.