Trading Psychology- Discover 7 Secrets To Improve Discipline
Trading psychology is the most challenging part of trading. As a trader, you have to require a sum of skills to build you as a professional trader. Psychology of trading is one of them that you have to control consistently to make trades easy and profitable. So, if you are planning to make a trading checklist, then don’t forget to add this.
On the other hand, discipline is mandatory to understand the fundamental trading rules. It also helps you to build your confidence. Remember, you can only make money in the long term if you successfully control trading psychology.
Today, we will reveal “Seven Amazing Secrets” that help you to improve discipline and psychology together.
What Is Trading Psychology
Trading psychology refers to the human mindset. Traders actively involved with trading psychology during the market time or trading a particular asset. On the other hand, it is an emotional component that has a direct influence on your trading activity.
You can categorize the psychology of trading in different parts. But some of these like GREED, Fear, FOMO and Regret play an important role in the trading process. In among of these four, greed and fear have a primary influence on trading.
In trading, greed leads traders to take more risk. Oppositely, fear helps traders to avoid that risk, and generate a small amount of return.
By being emotional, you will increase your chance of failure. Eventually, you will fail to control the edge of risk. In the end, you will lose more than your earning capital.
How To Master Psychology Of Trading
In some cases, strategies that you use aren’t your key to success. For some experts, the key is trading psychology. You can also control your emotions with a few strategies. Most importantly, it is not only about making a decision but also taking the right decision at the right time.
As we mentioned earlier, this blog is all about what you should consider being master psychology of trading. So, here are the 7 tips on how to boost-up self-discipline that can help one to avoid bad trading.
Trading Discipline Over Money
You should not focus on becoming a millionaire or earning a lot of money. Before entering the market, you should forget about the term “money.”
But isn’t trading all about money?
Eventually, you can count on both yes or no. Because a good trade only brings money in your pocket. On the other hand, a bad trade can make you lose a lot of money. At the end of the journey, you have to concentrate on things that make money.
So, make strategies and plans according to your goal. If you do everything right, the money will come automatically. Really interesting!
That Is Your Real Money
A demo trading, almost all traders are aware of it. However, we rarely take it seriously. If you are new in the trading world, then practice is the backbone of your success.
In our trading guides section, you will find a lot of articles where we always encourage our traders to improve their skills and build strategies by using a demo account.
It is the most reliable way to learn as you are not dealing with real money. But, while trading considers it as a real account.
Start With A Small Risk
Do not throw your money around and start with a small amount. Risk management usually ignored by most of the traders while it is also noticeable. Moreover, market risk is pretty much out of your control.
Typically, traders start searching for profitable strategies, trading signals, indicators etc at the beginning of trades. But at the very first time, a trader needs to understand how to manage risk and set a risk free trading orders.
As avoiding risk in trading is not possible, so try to limit your risk by 2% per trade.
Watch Others Graph
Watching other’s graph means to follow and copy expert traders. This trick is generally followed by both novice and experienced traders.
Many broker’s platforms allow traders to copy expert traders. If you are not sure which platform is giving, you can check our broker’s comparison list.
Or, you can research and find the name of an expert from online and can follow his trading style and personality. After completing the conversation, he will follow your trades, guides you, and judge you as a mentor.
Do research as much as you can. One of the best ways to improve your psychology of trading is to increase your knowledge. You will find many online pdf and trading psychology books that will add more value to your trading plan.
Start spending money without any knowledge is like searching for water in a desert. You should consider trading as a business. And in business, professionals never stop learning.
They upgrade themselves with constant learning and polishing their skills to make it more accurate.
Prepare A Checklist
Write down everything that important for trading. You can make a daily list or can make a weekly list depending on the market situation.
Suppose, you are listing one currency pair to trade today as it will give you the highest return in terms of your analysis. However, you are not sure whether this pair will give you the same result tomorrow, or not.
Here, an economic calendar will help you to figure out which trading asset will give you the highest profit. Having a well-defined strategy and goals can help you stay one step ahead of other traders.
Moreover, you can also maintain trading journals to keep track of your profits and loss.
Stick With Your Trading Plan
Strength your trading mentality. Make a plan and stick with it. Do not change your plan or compare it with another trader without knowing the back story.
Determine your entry and exit point after analyzing the market properly.
Promise one thing that you will follow trading discipline at least one day. You will be surprised after seeing the result. Trading is 90% psychological, and you can’t teach another person or talk, without experiencing it.
Try to be more patient if you can. Accepting loss is something hard for most of us. However, you have to accept and change it for time to time.