Rohan MathawanTo become a successful trader, think like a successful trader. How is it? How is the winner’s mindset different from the mindset of someone who constantly fails?
If you are wondering why others have a profit growing day by day, and you have some losses, then this article is for you. Learn how to reconfigure yourself to great and ongoing success!
Improve Yourself
As practice shows, a trader in the market behaves the same as in ordinary life. For example, if you like order in everything, then in trading, you are most likely to strictly adhere to the strategy and regularly keep a trader’s diary. And if you are used to being lazy, doing everything at random, and somehow, then in the financial market, your behavior will be the same, and this is fraught with losses.
Are you interested in forex & stock trading? Develop yourself as a person! Cultivate the right habits; get rid of laziness and inattention. Develop determination, confidence, discipline, and self-control – you will see that improvements will come not only in trading but in all other matters.
Trader Discipline: 3 Key Components
Discipline is perhaps the main quality of a successful trader. And it needs to be developed in three areas: emotions, actions, and money management.
1. Emotional discipline – is all the psychology of a trader. There has not yet been a case in the financial market that a trader who succumbs to greed, thirst for quick money, excitement, impatience or fear, would not pay for it with his deposit.
As the wise saying goes, the patient is better than the brave. Therefore, learn to wait and not succumb to momentary impulses. Stop yourself as soon as there is a temptation to trade, not according to strategy, train willpower, and self-control so that even in the most challenging market situations, you can rationally make the right decision.
2. Discipline in action – the ability to control your work. A trader is his own boss, he is not accountable to anyone, and sometimes it dampens. Become a boss for yourself, do not let yourself be lazy or do anything after the sleeves.
By the way, keeping a trader’s journal helps a lot. Every day, record in it all your transactions in detail and then analyze them to see the strengths and weaknesses of your trade.
3. Money management – the discipline of money management. In trading, where there is always a risk of loss, this is especially important. Determine what level of deposit drawdown for a day, week or month is the maximum permissible for you, and if you reach it, stop trading – do not try to win back right away.
Keep in mind that the size of each of your transactions should not exceed 5% of the total deposit amount, and do not forget about take-profit and stop-loss.
Intuition: Friend or Foe?
Remember that intuition of intuition is different. It is one thing when it is based on many years of trading experience and deep knowledge of the market, and it is quite another when it is simply “maybe”. Only a successful trader can rely on his intuitive sense of the market, but for beginners, it is absolutely impossible to do this.
On the contrary, you need to learn how to trade strictly according to the rules of the strategy, to make transactions only on clear market signals, and not because “it seems to me that the trend should unfold now.” Only when you have years of effective trading behind you, based on technical and fundamental analysis, will you learn to correctly predict price movements.
Be Smarter Than the Crowd
In any competition, there are many participants, and there is only one winner. This is the one who turned out to be stronger, smarter, more cunning, or more agile than the rest. In trading, it is precisely the same: if you want to win – act differently from the market crowd, do not succumb to the herd feeling, and be wiser.
As an example, take this situation: the trend is growing; the price reaches the resistance level and is already breaking through it. Breakout trading strategies are the most popular.
What does the crowd do? The bulk of the traders decide that once the breakdown has taken place, then it is urgent to enter the deal to buy because the trend should continue. But most often the first breakthrough turns out to be false – trades in millet traders are knocked out at a stop loss. In this situation, it is better to wait and enter the market only after the breakdown is confirmed.