One of the most important and most commonly overlooked aspects of trading is trading psychology. I honestly believe psychology plays a massive part in whether a trader succeeds or fails. Here are some of the key things that will set you apart from 90% of the other traders out there:
- Ability to dealing with losses – Take the loss, compartmentalize it and move on. IT doesn’t impact their future decisions.
- Learn to be patient – Patience is one of the hardest qualities to learn, but one of the most beneficial. Addictive trading is the curse of retail traders.
- Plan to Fail – Successful traders plan to fail, unsuccessful traders fail to plan. Successful traders know losses will come at some point, and when they do they are 100% ready for them. Beginners don’t plan for losses and as such become ruled by emotions when faced with a losing position.
- Practice makes perfect – Just like athletes and musicians perform better when they practice, so too will traders. Practice can involve setting aside dedicated times to review charts, reviewing old trades and writing a trading journal.
- Overconfidence is a trader’s worst enemy – Most traders you speak to will agree that their worst losses have come after periods of highly successful trading.
- Practice mindfulness – Mindfulness has been proven to alter brain structure with significant changes in the hippocampus and amygdala regions. Traders that practice mindfulness can reduce emotional trading, improve concentration and attention levels.
- Be humble – The market giveth and the market taketh away. Those who remain humble and realize that the market can take back their profits at a moment’s notice have a great chance of success.
Trade safe.
