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Mental

What Experienced Traders SayHey! In this post, I would like to share seven unexpected tips that can transform your trading approach and mindset. These insights, collected from various sources and trader experiences, challenge conventional wisdom. Implementing these principles can significantly enhance your trading performance and decision-making . 7 UNEXPECTED TIPS 1️⃣ Trading More or Longer is Not Better: Quality over quantity should be your mantra; focus on high-value trades rather than increasing volume. Trade proven setups. 2️⃣ Trading is Not About the Market; It's About You: Your mindset, discipline, and emotional control play a pivotal role in your success. Don't gamble! 3️⃣ The Focus is Not on Winning; It's on Not Losing: Risk only what you can afford to lose. Protecting your capital should be your primary goal — profits will naturally follow. 4️⃣ Demanding Certainty is Not Productive: Think probabilistically. Embrace the uncertainty of the markets; flexibility is key to adapting your strategies. 5️⃣ A Trader Does Not Need to Be a Genius: Successful trading is about consistency and learning, not innate talent. Get smart. 6️⃣ The Harder You Try To Make Money, The Harder It Becomes: LET IT GO! Sometimes, letting go of the need for immediate profits can lead to better results. 7️⃣ How Often You Win is Less Important Than You Think: Focus on your overall strategy and risk management rather than just win rates. You can be PROFITABLE with 33% win rate! What do you think about these unexpected tips? Have you experienced any of these insights in your trading? I’d love to hear your thoughts and experiences — drop a comment below! If you found these tips valuable, please give this post a like and follow for more insights!
Education
by ArShevelev
2
📖Ultimate guide to feeling a little bit better after a loser.1The video is long, feel free to use speed settings :) Thanks for your interest in the last post about the Major mistakes traders do. Now let's talk about coping emotionally with losers. This is Part 1. 📖We all know this feeling, it feels awful, hopeless like something very valuable has been taken from us, like it destroys our work and plans and it feels BAD. Who am I to speak on this topic. 4 year of trading experience, lost maybe 25 funding challenges over the course of 3 years, got 2 times funded the previous year and lost these funded accounts. Had multiple losers, out of which many just stamped me emotionally. Over time I developed coping skills to better prepare for these -1’s and though I’m far from being really good at it, I’m definitely a bit better than I was some time before. And this is my ultimate guide to feeling a little bit better after a -1. 📖First of all, congrats - if you’re still here, it means you’re interested in the topic and by watching videos like these from me or other traders, and thinking, and trying to become better, you’ll do it eventually. Yes, with time you better find one source of education that really sticks to you, and for me, it’s the method.. but even other videos can build some foundation for your work in this direction. 📖As pointed out in the Mental Game of Trading, Our brain functions in 3 layers, so to say - automated habits, emotional brain, and rational. The thing is, emotions can really block rational thinking. It’s physical and happens in your brain. It literally changes our chemistry. Accept the fact we can't accept losers fully. It will always feel shite, but with time and a good strategy of preparation, it will get better. So this is a Stoic principle applied to trading, be prepared for the worst-case scenario, how? Expect it to happen, and know it’s inevitable and you’ll feel bad. Paradoxically, it allows you to feel a little bit better when it actually happens. 📖Notes and full diary, you want to know all about how you behave in the markets so that you recognize the build-up of emotions and can prepare better for the next inevitable loser, and in case you understand you need to stop because you’ll become too emotional - than you’ll be able to stop. How diaries work is that you know all your triggers, and patterns, in a way that nothing is new to you about how you feel about the market and how you react to certain situations. 📖Appreciate yourself and your work! gratitude - videos, practice, mooji. appreciate the work you did, especially if the loss comes out from a high-quality setup. Many people turn too much attentions to their flaws while forgetting recognizing their powerful sides. What’s your super power - holding to TP, sticking to max trades per day, not overrisking, really going through the checklist. 📖Awareness doesn’t equal control. You can control things only to some extent, but when emotions really kick in, it’s too late. That’s why people very often say: I understand everything, but I can’t stop. Yes, my friend this is how emotional brain works - it leaves with no control over the actions. Awareness doesn’t equal control. If you feel bad, you need to STOP, because in that state losers will feel especially bad. 📖Trade less, a lot less. Good traders and my experience. 📖Record a trade as a -1 in a journal once you started it - Ment’s video.
Education
by Yelli_trades
2
☝️3 Main enemies of a trader and how to deal with them☝️☝️Dear traders, no one here has superpowers, and I'm just a human after all. Please take everything with a grain of salt. I'm sharing my view and one of the possible scenarios of price action, but mostly - my direct experience. When I enter I try to predict as little as possible and actually follow what the market is doing, joining the market and not arguing with it or forcing my will. Have good trading, keep a constant flow of self-awareness, and do your best. 🙌
CAPITALCOM:US100Education
by Yelli_trades
1
What Traders and Boxers Have in Common 📊🥊 Hello TradingView Family, I've been doing some thinking lately about trading and how it surprisingly shares quite a few parallels with the sport of boxing. It might sound a bit unconventional, but bear with me - there's more to it than meets the eye. 🥋 Strategy is Key: In both trading and boxing, success is heavily dependent on strategy. Boxers carefully plan their moves, anticipating their opponent's actions, and traders meticulously analyze the market, foreseeing trends and patterns. It's all about staying one step ahead. 🥊 Discipline Matters: Just like a boxer adheres to a strict training regimen, successful traders maintain discipline in their approach. Emotional control, adherence to a trading plan, and the ability to stick to a strategy even when the going gets tough are crucial. 🛡 Risk Management: Boxers can't afford to leave themselves exposed to too many punches, and traders can't afford to expose their entire capital to a single trade. Both require calculated risk management to survive and thrive in their respective arenas. 🔄 Adaptability: No boxing match goes exactly as planned, and the market is just as unpredictable. The ability to adapt to changing circumstances, whether it's a shift in the opponent's strategy or a sudden market twist, is a shared trait. 🥅 Resilience in the Face of Loss: Both traders and boxers experience losses. It's not about avoiding them altogether but about how you bounce back. Resilience, the ability to learn from mistakes, and the determination to get back in the game are keys to long-term success. 🔄 Continuous Improvement: Just as boxers are always refining their techniques, traders are constantly honing their skills. Learning from experiences, staying updated on market trends, and seeking out new strategies are essential for growth. 🧠 Mental Toughness: Boxing requires mental fortitude to withstand the physical and psychological challenges. Similarly, trading demands a strong mindset to navigate the ups and downs without succumbing to panic or overconfidence. So, what do you think? I find these connections fascinating, and it makes me appreciate both the art of trading and the sport of boxing in a new light. 🌟 Let me know your thoughts! Cheers! 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Richard Nasr
Education
by TheSignalyst
16
😱 Fear Of Missing Out (FOMO)📉Fear Of Missing Out (FOMO) / SHORT scenario. Fear of missing out, or FOMO, is the feeling of anxiety or regret that can occur when someone believes that they have missed an opportunity to invest in a stock or crypto currency that is increasing or decreasing in value. This feeling can be triggered by seeing others making money from a particular investment, or by observing the stock or crypto's value increasing or decreasing over time and thinking that one should have invested earlier. FOMO can be dangerous to investors because it can lead to impulsive buying or selling decisions that are not based on sound investment strategies. In the above scenario we can see the effect of FOMO in play. The price action breakdown of the trendline, indicating weak support and a flip of the trend. This psychological effect can be observed without the use of indicators and by just looking at the price action. A deeper look into order flow and Open Interest could further explain the trader's behavior on this particular effect that occurs. 🔴 ENTRY is based on the first major red candle after the breakdown, trying to knife-catch the price, based on no strategy and purely emotion of missing out a potential short position with a stop loss nowhere close to a potential supply zone where the price action could re-visit for confirmation of a downtrend. 🟢 ENTRY is based AFTER the retest of the trendline, on a potential supply zone where the price action is looking for a retest at this level before confirmation of further decline of price action. Stop loss is given above the last high, above the trendline. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
Education
by QuantVue
2
The Psychology Of A Market CycleThe psychology of a market cycle refers to the emotional and psychological states that investors and traders go through as they react to market conditions. Here is a short summary of each stage of the market cycle: 🔵 Disbelief: At this stage, market participants are skeptical about the potential for a market rally or recovery. They may be hesitant to invest or trade, as they do not believe that the market has the potential to improve. 🔵 Hope: As market conditions begin to improve, investors and traders may start to feel more hopeful about the future. They may start to see opportunities for profit and become more willing to take risks. 🔵 Belief: At this stage, market participants start to believe that the market will continue to improve. They may become more confident in their investment decisions and become more willing to hold onto their positions for longer periods of time. 🔵 Euphoria: As the market continues to rise, investors and traders may become overly optimistic and start to believe that the market will continue to rise indefinitely. This can lead to excessive risk-taking and overconfidence. 🔵 Anxiety: As market conditions start to deteriorate, investors and traders may become anxious about the potential for losses. They may start to question their investment decisions and become more hesitant to take risks. 🔵 Denial: As market conditions continue to worsen, some investors and traders may start to deny that the market is in a downturn. They may continue to hold onto their positions in the hope that the market will recover. 🔵 Panic: At this stage, market participants may become panicked about the potential for further losses. They may start to sell their positions in a rush to get out of the market. 🔵 Capitulation: As market conditions reach their lowest point, investors and traders may give up hope and sell their positions, even at a loss. This is known as capitulation. 🔵 Anger: After the market has bottomed out, some investors and traders may feel angry about their losses and the perceived market manipulation or wrongdoing that they believe caused the market crash. 🔵 Depression: After experiencing significant losses, some investors and traders may feel depressed and lose motivation to engage in further investment or trading activities. 🔵 Disbelief: As market conditions begin to improve again, some investors and traders may return to a state of disbelief and skepticism about the potential for a sustained market rally. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
Education
by QuantVue
2
'Trading Psychology: 'The 3 Levels of your Game'Hello Traders, As we know trading is one of the most challenging professions in the world and not only do you have to do your research and own due diligence on a technical aspect, you must ensure your mind/emotions are on point as it is the most common reason traders lose money in this industry. I wanted to share a bit of information from a mental and emotional standpoint about breaking down the 3 levels of your Psychology Game. . No matter how skilled one trader is, everyone has an area that could improve and everyone will make mistakes. The 3 main mistakes we as traders make are: To summarize this chart, the differences between 'B' and 'C' game is that in the 'B' game you have the impulse or thought to make a 'C' game mistake, like closing a trade too early or forcing a trade. Instead you retain the presence of mind and emotional control to avoid it. In your 'C' Game, your emotions are too strong and you cannot stop yourself from forcing trades or cutting profits short. While in the 'A' game, the impulse or thought doesn't happen, or its too small you barely notice. Your goal to as a trader is to eliminate and correct your performance errors that cause your 'C' game. You cannot by escape how much of the gravitational force 'C' game has by focusing on improving just your trading skills and knowledge. You will continue to make the same errors (possibly different ones, but errors are errors) which will create a level of excess negative emotion in your mind. Creating and plan of emotions to examine & review on a daily basis will help you correct your failures and fill you with a different type of emotions, happy ones. By writing down your thoughts of what is going on before, after and during, you start breaking down the backend of your trading and your decision-making becomes much easier and more confident. Creating a plan of your emotions could come with a variety of things, some of the most common ones to watch out for are: -Trigger (eg. Swing trading forex) -Thoughts (eg. I can't believe I got stopped out, it has to go up!) -Emotions (eg. I want revenge on any trade that I lost which I know I should have won!) -Behaviors (eg. Overly focused on one position) -Actions (eg. Constantly looking at P/L) -Changes to your decision-making (eg. I need to get my money back, I need to trade more) -Changes to your perception of the market opportunities or running positions (eg. Your going off prediction rather then reaction) -Trading Mistakes (eg. I'm taking the same trade over and over, until its clear I'm getting no where) Journaling down these emotions and also reviewing them on a day to day, trade to trade, basis, will help your trading game improve and make you become much more successful. I hope this has given a brief insight on how trading psychology plays a huge role in our careers, please leave a comment and share what level of game you are! If you felt this has shared some good information, please hit the like button and follow me for more of these! Thanks Trade Safe!
COINBASE:BTCUSDEducation
by ktlfx
1
A mental challenge of a trading day. Trading day. A difficult one. GLOBALPRIME:GER30 The day started. I woke up a bit too early and lay in bed for the next hour and a bit. Rolled over and had a look at the night's notifications. Nothing important. I opened my laptop. This was the first mistake. A laptop with wifi and a trackpad. Suboptimal. I found my login, successfully logged in and adjusted my lot size. Next issue. I was trying to enter “20” lots. It didn’t work. Why? Minutes later, 2 mt5 restarts later I realized; the contract size was 100: 20 lots = 1000/point. Way too big. Oops. Luckily mt5 didn’t let me enter that. I need to pay more attention to little details. I quickly downloaded the Tradingview desktop app, installed and logged in. Opened DAX chart. Waited for open. Next mistake: directly after open I placed a trade. Not even 5 minutes had passed. I placed my trades according to the premarket data and 1 min chart. Terrible way to go about the open. I was short the DAX. 20/point - 35 ish point stop - 700$ loss. 1.5%. WAY TOO BIG. However I accepted the size and moved on. Why? My ego was bolstered after the fact that my trading stats were good. I had compiled them the day before. 50-60% WR with my winners being on average 3.5x bigger than losing trades. I didn’t even think about the size. Not great. Now I was in a position, taken off the 1min chart and premarket data, with a rough assumption that the markets were supposed to be headed lower. To make things worse the trade was placed on my laptop with a trackpad. By the time I placed the trade my risk had effectively doubled. Stop went from 17 to 35 points. The market had moved 17 points lower whilst I was still to get my trade in, on an idea that I had had for the last 2-3 minutes. To sell above the bars just before open. It took me 17 points. Ok. Now I was short. Too big position due to the delayed entry, off a one minute chart and mostly premarket data. Not much backed this trade up. And I risked 1.5% of my account on it? Why? Because I thought the DAX was headed lower. Side note: the index was up 1% premarket, following a 2% bull trend day. From a longer time frame there was nothing else to do but buy. But still I was short. Why? The previous day might give us the answer: here it is: A similar scenario. I wanted to be short. However with key differences to the actual trading day: They’re similar to each other, sure. But there’s major differences. The previous chart had had a 5% bear day before. Sellers were still about. A bearish continuation was highly possible. Favored even. It played out early. A 200 point move to the downside, set off by a weak open. (Another key difference to today) today had a bull bar, albeit with tail on top as the first bar, followed by a weak bear bar with lots of tail compared to the previous day of strong bear + weak bull. This was a key difference. Price action wise there was an exit for this trade at the close of the second bar of the session. Did I take it? No. It would’ve been a small looser 6-7 points (a 10 point winner if the entry had been proper). Why did I not exit? Well, I was hoping to see something. Something that had ingrained itself into my mind. So much so that I completely disregarded what was actually in-front of me. (Weakish) bull plus weak bear. I was frustrated and wanted to see something. That something never came and I was stopped out on the massive bull bar that followed. But how did the loss feel? And how did keeping the position open feel? Strangely, I was not uncomfortable. I took the trade confidently and was confident, against all odds. Alright, the trade wasn’t taken in the best way possible. However it was a relatively decent short. Moving on. Here is where the real problems begin. The trade before just didn’t work out. Maybe I was unlucky. A very big bull bar. 50 points. Big bull surprise. Ok, the bulls won this one. It will likely be a trend day up. This is what I told myself in the moment. What do you do on a trend day? There’s so many tempting counter trend entries. It looks weak. It just feels right to get short. It looks like the wedge, or double top or similar reversal pattern will work at any second. A tiny bit of risk for a huge reward, that’s what our brain loves. We love risking little and winning big. That’s the whole concept that the lottery exploits. If lottery tickets were to cost 100K with a chance of winning 200K, do you think anyone would be buying them? No, definitely not. Even though the chances of winning would be inherently bigger. Our minds love security and just the slightest chance of a big winner. It hinders one majorly in a trend day. What you should do is the opposite. Use a wider stop and just go with the trend. If it’s a strong trend, started by a bar like the above you can buy anything. Bull bars, bear bars, opens, retracements. The worst entries will become profitabel since the markets will creep their way up. I was aware of this. I knew what I had to do. LONG. Initially I opened a long on the close of that big bull bar. I closed it on the bar with the long tail. 15 point profit. Why? Because I saw a wedge on the 1 min chart. It was a good sell signal. Imagine this: a wedge (reversal signal), your risk would be about 10-15 points with a target of 30-70 points, depending on how long you want to be in the trade. Would you take it? I did. And the markets just went higher. This happened twice. I tried selling into the trend and was consequently always stopped. I was comfortable keeping the shorts. They felt good. This is another indication that something is wrong. Futures trading should feel uncomfortable. This was already said by Charlie D, portryed in the book "The legendary Bond trader". This is one of the most important parts: (This is taken from Tom Hoougard, an exceptional trader that has helped me massively, especially in the mental department): After two losses I realized. The pain had caught up with me. It was delayed. I went long. I added on the retracement. But then I left with stops at BE. I returned to being stopped out, after a three legged trend move up. 2 bulls flags. Unfortunate, however, I'm proud of that part. I stayed in. I overcame my instinct to take profit. It didn’t pay off this time, but it will eventually. I will be in on the next 200 point rally. This is one of the hardest mental games to play. If you're just slightly off, you won't win. How do I go about fixing this and making sure it doesn't happen again? A few suggestions: Take a step back. Stand up and leave the room, walk around and come back. You will have a brand new perspective on the matter at hand. Another idea: focus on the process: focus on what you see at hand. We all want one outcome: profit and winners. However we don't get that by imagining that outcome. How do we get it? We need to stay in the moment, we need to stay in the process. We need to see what is presented to us and act accordingly. This may be difficult to do in the moment, however one needs to be able to think clearly and execute on those thoughts in the trading moment.
G
by fxwithfreddi
3 Mindset Tips for Elite TradingHappy Sunday Traders! In todays video we go over 3 mindset tips for elite day trading! Watch the short video below to understand this better, but here they are anyway: BE OPEN MINDED Let the market be your guide (price action) Wait until you feel the market (day trading) Be just as ready to buy, as you are to sell CONTROLED AGGRESSION Know what an A+ setup is, then develop the confidence to act big and fast Have a plan, both for the best entries and the failed trades EVERY TRADE IS ABOUT DEVELOPMENT How good/great of a trader could you become by next month if you learn from every trade you take this January?
BITSTAMP:BTCUSDEducation
by PrimedGroup
2
Consistency isn't something you get, it is something you doConsistency isn't something you get, it is something you do! Consistency in trading is a vital component, yet most traders think its something you get, it is not something you get it is something you do daily! Having a trading plan is something you do and them follow (do again) Following position sizing and risk management is something you DO Executing your system is something you DO! You get the drift! Do more good!
OANDA:XAUUSDEducation
by PrimedGroup
5
Tired of Losing?"The Market cannot hurt Me. I can only hurt my Self!" - Josh Ridenour There is a Time for Losing - The 29th verse of the Tao Te Ching is about how there is a time for everything in life. A time for being ahead, a time for being behind. In the market, there is also a time for everything. A time for large profits, small profits, break even trades, losers, and consecutive losers which lead to a draw down. It is easy to get caught up in the heat of the moment depending on where you currently are. But it does not really matter what part of the cycle you are in, it is all part of a traders life and the cycle of a trading performance. Stop Predicting! It is a false belief to believe prices and markets can be predicted. If it were possible eventually the majority of market participants would figure it out and there would be no one left on the other side of the trade, and the market would cease to exist entirely. If it were possible to predict markets, you could avoid losing trades and only take winners. Anyone who has been trading for very long knows this is simply not the case. The problem with making predictions is you then shut your mind off from the information the market gives you. Instead of being open to what is happening, your mind becomes rigid and can only take in what confirms your beliefs. This prevents you from being able to flow with the market, and open your self to the opportunity in front of you. The best traders admit when they are wrong, get out, and even reverse if necessary. If you dont believe this - listen to a stock analyst on Mad Money or any other TV show about stocks. They are often so confident in what they say that they might even convince you! But there is a reason why he is on TV talking about markets, and not trading them. If he could trade the markets and make money he would have no reason to go on TV as the financial rewards are miles apart. In fact, analysts make the worst traders because they are so caught up in their thoughts and beliefs about market direction that they cannot trade effectively! Cease efforts "Wu Wei" In Eastern Philosophy there is a term "Wu Wei." It cannot be fully understood or explained in words, only experienced. At the essence of its meaning is to "Let be" to "allow" or "flow like water down a stream." The point is to stop resisting, and stop trying so hard. The harder you grasp at something, the harder you try to succeed, the more you fail. If you are constantly trying to make money, and constantly trading, you are probably not making a consistent return. Rather than trying so hard, let trading come naturally. Profitable trading is effortless. It does not require thought, only action. In fact, I try to do as little as possible, and trade as little as possible. My most profitable weeks I hardly trade at all! This has become a fundamental aspect of my trading system. Instead of constantly trying to make money all the time, I simply wait for a pot of gold to be in front of me before I do anything. Then, I take it. Again if you dont believe me; try as hard as you can tomorrow to make as much money as possible and see what happens! Stop Trying to Remove or Control Emotions - Most traders who have been trading for a while come to the idea that emotions prevent them from success and are standing in their way. I know, as I have been there. And so we try as hard as we can to remove emotions from our trading. There is a problem with this concept. You are a human right? As long as you are human, you will have emotions; no matter how hard you try to remove them. It is simply not possible. So removing emotions or attempting to do so is the wrong approach. Instead; use your emotions to your advantage! They are warning signs; listen to them. Then there is the negative internal dialogue which the market often brings out. After a series of losing trades, many traders get upset and feel bad. They blame the market for taking from them, and feel like a loser. How do you think a trader will perform after feeling this way for a few days or longer? His performance suffers as he tries to take back what was once his and he compounds his mistakes by trading out of a negative mindset. You have to learn to recognize and become aware of your internal dialogue. It is very important to your trading career, and your every day life. Most of us live our lives without the slightest idea as to what we are doing to our selves. Your mental structure is a choice. This is what I mean when I say "The Market cannot hurt me, I can only hurt my Self." My Trading Psychology book "A Traders Mentality - The Path of Self Discovery and Being a Trader" is all about these ideas and how to free your mind and better your trading performance. If you found this helpful, please like! Feel free to comment or ask questions.
Education
by tradersmentality
The Hardest Part of Trading (What is rarely said)Seeking More information - When first introduced to markets, every beginner immediately thinks he must learn the rules of the market in order to succeed. He thinks he loses because he does not know enough. He initially believes there is a "holy grail" a system, a leader, or a mathematical equation like Fibonacci levels. He believes these will protect him in the market, and will lead him to a profit once he understands them. The problem is, there are no set rules which work consistently in the market. If there were, the institutions and everyone else would simply use them. What would happen then? Well, there would be no one or institution to take the opposite trade, and the market would cease to exist altogether. And so the new trader changes from one system to another, from one guru to another, and constantly thinks he must learn more information in order to succeed. What he believes to be preventing his success is a lack of knowledge, a lack of information. But you see, the more information you have does not necessarily lead to better decisions. There is a lot of evidence to support the contrary, and suggests that too many choices actually impair decision making skills. On top of this, most of the information in the trading world is quite simply wrong. There are 10 x more scam artists who claim to "know" and will take your money to teach you how to trade than there are profitable traders. Beware of anyone who claims to know anything. They are either fooling themselves, or fooling you. These people do not understand markets or them selves, and cannot make money in the market, so instead they prey on new market entrants. This is the primary reason I started my trading website; to provide high value information at a low cost. And to give those who are serious about trading an actual chance to make it in the markets, without ignoring a key variable; your self. Dealing with Uncertainty - The reason most traders seek new information is because they are afraid of uncertainty and want certainty. They seek something to protect them in the market. Something to protect them from themselves. A system that will guarantee a profit. But there is no such thing. Markets constantly change and evolve through the market cycle. And there is no system that works across all three parts of the market cycle. No matter how convinced you are of something happening in the market, there is always at least a 30-40% chance of the exact opposite happening. This means even the strongest edge has a failure rate. The sooner you realize and accept this, the closer you will be to making a consistent profit. It is very hard to learn how to deal with uncertainty. But you do it every day. When you wake up in the morning are you certain you will live through the end of the day? Are you certain you will still have a job tomorrow by working for a reputable company? No, and you can never be completely certain of this. Certainty is an illusion. There is no certainty in this life. The only certainty is... uncertainty! Patience and Discipline (Ability to Do Nothing) - Every profitable trader uses these two terms (patience and discipline) when asked how they are profitable. When a beginner hears this, he rarely understands what this means. Discipline means doing something even when you dont want to do it, or doing something you dont want to do. Patience means waiting for your turn, or waiting for something to happen. But we all want to trade right? Yes of course, that is what we do as traders. But having discipline means not trading when the trading is not good, even though you want to. And having patience means waiting for the good trading to return again. In other words, when the time is not right you must do nothing. If your edge is not present; there is no edge and no action to make. When the market is not offering what you want, or is confusing, you must develop the ability to wait, and do nothing until the time is right again. This idea of "doing nothing" stokes a fear in most people, especially in todays give me distractions, social media world. They say "Well what am i supposed to do if i am doing nothing?" Doing nothing seems contrary to getting what you want, getting somewhere. In and outside of the trading world everyone believes in order to be a "trader" you must trade - constantly. This is why most traders lose money. Because they do not understand that there is a time for doing absolutely nothing. And that time is most of the time! See more on understanding markets (Price Action Trading) and yourself (Trading Psychology)at my website below. If you found this helpful please like! Feel free to comment or ask questions.
Education
by tradersmentality
20
The Top 3 Reasons Traders Lose and Give up1). Over-trading and Random trading. Most people and traders think in order to make money as a trader you have to be trading all the time. If you are simply watching the market, you are missing out, or not doing your job by not trading it. This leads to over trading, and trading randomly or outside of your edge. Any trades taken that are not apart of your trading plan and do not align with your clearly defined edge, should be considered random trading. This is common after losing, because the natural tendency to want to make back what you lost. This only compounds mistakes and adds to the losses, making it even harder to recover both emotionally and financially. Being excited or eager to trade is normal, especially for beginners who are drawn to the profit potential. We are all in the market to make money, and if you are not in the market you are not making money. But more often than not, being out of the market is the right thing to do. It is often better to not make any money, than to lose it! By understanding, developing, and only trading your edge you increase your likelihood of earning a consistent income. Remember, all edges have a failure rate between 40-60%. So it is important to not jump back into the market after losing, until the next time your edge sets up. If you do not know what your edge is, you should only trade SIM or not at all until you develop one. 2). Scalping or Not Allowing for Windfall Profits. There is an old saying on Wall Street "you cant go broke taking profits." But you absolutely can go broke by taking profits, primarily when your losses are bigger than your wins. It has become common these days for people to advocate scalping. But they do not understand that the math is against them. They think since the high frequency trading firms are scalping for ticks or a point, that they should too. But a retail trader cannot compete with these institutions. They have algorithms that can make 10 trades faster than you blink, pay minimal commissions, have direct access to the exchanges, hedge their trades, and often use wide stops and scale in to positions. A beginner should never scalp, and even those with experience are better off swing trading as it offers a less stressful and less difficult way to trade profitably. When swing trading it only takes 1 out of 10 trades to offset all the losers and provide a profit. This is the complete opposite of scalping, where it takes 10 winners to offset one large loss. Or if you are using a smaller stop like twice your target (1 point target and 2 point stop), it still takes 2 trades to make up a single loss and a third to make a minuscule profit after commissions. What happens when you lose again? This cycle repeats over and over, and the trader dies slowly but surely from 100 bee stings. 3). Wrong Mentality. There are many examples of the wrong traders mentality which prevents success for so many. One of which is losing. Most traders do not like to lose, they see losing as a problem. They do not understand that losers lead to winners, and that losing is the natural cycle of trading and is imperative to a consistent return. You cant win if you dont lose! Another example is emotions. Most traders see emotions as the enemy, that which stands between themselves and the market, and prevents them from succeeding. So they work to try and remove emotions. But this is not possible. As long as you are a human you will have emotions. You can never remove them. The key is to understand them, and use them to your advantage in the market. And when you are not in the right mental state, remove yourself from the market altogether. A third example is fighting the market. This relates back to the first topic, over trading and random trading. Many traders do not realize the market does not always offer what they are seeking. A trading range is a good example of this. In a trading range, the market goes sideways there are many failures, and the market does not get very far. What happens to a trader who does not realize this? He continues fighting the market, looking for a large gain when the market is not offering one. So it is important to understand your self and the market. Not just the market. You need to be able to realize when you should not be trading because your mind is not in the right state productive to trading. As well as knowing and understanding your edge, which also means the market context it works well in, and when it does not. For more understanding on these topics and more, including how to develop an edge and how to better your traders mentality, see website below. If you found this helpful please like! Feel free to comment or ask questions.
by tradersmentality
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