Trading Psychology - Having the Right frame of mind
Be it any task in the world, Without right approach one is bound to fail. And the same goes for intraday trading as well. One need to develop the right attitude and belief in his/her system. I am just mentioning the key guidelines that I follow and try to implement.
1. Trading is the game of probability.
This is quite easy to say than accept. When position goes in to loss, or by seeing a favourite setup to fail, it becomes difficult to accept that anything can happen in the market. Market has no obligation towards anybody, and it does not owe anyone any profit/loss. So we need to accept that profit and loss are just part of the game, while the real secret to success lies in proper money management which will allow us to loose less in loosing trades and win more in winning trades.
2. Every moment in the market is unique and making money is more important here than it is to be right.
3. One should not be overjoyed after few consecutive wins or be disheartened after a loosing streak. Treat all the trades irrespective of the outcome of the previous trade. You never know which trade is gonna give you a super big return.
4. Never play with your rules, thinking to out-think the market. One can play with your rules, and get away for a awhile. But one day market will play with you and will show you your position.
5. The study of price action only focuses on the effects, completely ignoring the cause. A charted history of price action is nothing but a cumulative story of millions of trading decisions from past. The study of price action has no magic power which can predict the future, but it keeps the odd in our favour by trading with a perception that the trend will most likely continue.
6. Trading price action is not only about trading chart patterns and doing candlestick analysis, but it is also about to be able to successfully read and understand what the chart is trying to communicate.
7. Finally, believe in your system completely and whole heartedly.
Regards
Taiki
Be it any task in the world, Without right approach one is bound to fail. And the same goes for intraday trading as well. One need to develop the right attitude and belief in his/her system. I am just mentioning the key guidelines that I follow and try to implement.
1. Trading is the game of probability.
This is quite easy to say than accept. When position goes in to loss, or by seeing a favourite setup to fail, it becomes difficult to accept that anything can happen in the market. Market has no obligation towards anybody, and it does not owe anyone any profit/loss. So we need to accept that profit and loss are just part of the game, while the real secret to success lies in proper money management which will allow us to loose less in loosing trades and win more in winning trades.
Trading is not an intellectual game. You can’t “out-think” the market. Analyzing and predicting the markets is not nearly as important as learning how to react to what the market actually does. Stay involved in the process of making the right decisions at each moment, and let go of worrying about the outcome. - Linda Bradford
3. One should not be overjoyed after few consecutive wins or be disheartened after a loosing streak. Treat all the trades irrespective of the outcome of the previous trade. You never know which trade is gonna give you a super big return.
4. Never play with your rules, thinking to out-think the market. One can play with your rules, and get away for a awhile. But one day market will play with you and will show you your position.
5. The study of price action only focuses on the effects, completely ignoring the cause. A charted history of price action is nothing but a cumulative story of millions of trading decisions from past. The study of price action has no magic power which can predict the future, but it keeps the odd in our favour by trading with a perception that the trend will most likely continue.
6. Trading price action is not only about trading chart patterns and doing candlestick analysis, but it is also about to be able to successfully read and understand what the chart is trying to communicate.
7. Finally, believe in your system completely and whole heartedly.
Regards
Taiki
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