Trading psychology is the final chapter in a trader becoming successful. Before you can control any market, you must first be able to control yourself. There will be times after experiencing significant losses or several losses in a row that a trader may develop disbelief in their system and themselves. You must be able to overcome this. A winning trader has to be confident, poised, and calm, to excel in the stock market. There is no room for second-guessing and hesitation.
Fear, greed, euphoria, panic, and FOMO ( Fear Of Missing Out ) are psychological behaviors that destroy a traders mentality and their bank accounts. You can never overstate how important psychology is to a trader.
Many levels of psychology need to be covered. Some traders try to be too perfect and never make a trade because the setup is never good enough. Some traders rely on too many trading indicators to make a judgment leading to ” paralysis by analysis.” For others, the fear of risk itself becomes a mental burden.
Much of these behaviors snowball into severe consequences like premature entries, chasing stocks, cutting gains too soon, and revenge trading.
I have extensively dealt with the topic of trading psychology. During my trading career, I have met and mentored many traders and therefore know the challenges each will face. Unfortunately, not many people in
the trading industry address the issues of poor psychological trading behaviors openly The knowledge I convey to my understudies mostly revolves around building the right trading foundation and process
In this blog, I will discuss problematic behaviors and describe what has helped me overcome fear and hesitation and create a stable stream of income
As you may suspect, behavior patterns cannot be changed overnight. The question is whether you can recognize them in time and how to deal with them.