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The trading game - acquiring the right mindset
A thorough understanding to yourself is essential in trading, how you think, what you believe and how you act will greatly affect the result of your trading. Many people don’t fully understand that trading is all about stable state of minds. In other careers you may get by; but if you don’t have this in the market arena, you will easily be eliminated. The sad part is most traders don’t know why they failed.
Many people believed that they are a trader, merely because they say they can handle their emotions especially in times when market is moving against them. I had witness one trader before, at first she is very calm every time she enters a trade, she is confident of trading bigger lots, if her position is losing, she is still in control and what she will do is look again her chart and redo her analysis. The biggest weakness I’ve seen to her is that she never cut her losing position, she can’t accept defeat. That is why even though most of the time her trade was right, it will only need on bad trade to wipe out all her profits and even the equity, worst thing is, even though she kept telling herself that she will cut, still same scenario happened from time to time. I don’t have to tell you what happen to the company.
Discipline in trading is very hard to achieve, and it takes time if determine to succeed. Sometimes even though you have a very concrete trading plan, you still make it wrong. That is why it is very important to assess yourself thoroughly before trading specially your trading capital. There are no specific traits in order to become successful in trading, every individual has different personality. Traders that succeed in this business know their personality, because by only knowing yourself you can select the best trading style that is best suited to you.
Newbie traders already know the meaning of trading psychology, how to use it and what to do to succeed in the market, because this is what they are told, it is what they read in different books. You will see many newbie traders with plenty of notes in front of their screen, in their journals, in their desk, in their board and elsewhere. But even though with all these efforts, it seems that the saying in the market is true that “no one beats the market”. Most traders quit because they think this is not for them and they are just being true to themselves, because they know how to accept defeat. But accepting defeat doesn’t mean quitting and serious traders knew this. Some still continue for the belief that this is normal in the market, but if you are achieving consistent losses, please think again.
Trading discipline is not something that you can achieve in one sitting or by creating multiple pages of trading plan and trading strategies, it is not by solely the definition of the book, it is the subtle result of your trial and error, your mistakes and your losses. You just have to try harder and before you knew it, you have already develop stable trading style, you are no longer afraid to cut losses and you don’t chase the market anymore. This is now the discipline, it will come out naturally.
If you are serious in trading, you must include this as a part of your life and of your daily routine because acquiring the right skills in trading is a process. Time, patience and capital are very essential factors in this process and only by truly understanding this; you will be able to achieve optimal trading result.
If you are ready to trade but no strategies yet, feel free to check the trading strategies section.