Mindset
They say that success in trading is only 20% skill and the rest is mindset or psychology.
Learn these lessons from those who have learned them the hard way: from painful experience.
Golden Rules of Trading
- Admit you are wrong & exit a losing trade immediately
- Cut your losses short
- Let your profits run
- Plan your trades - be patient - let them come to you
- Don’t chase the market
- Use stops
- Don’t overcommit
- Diversify
- Trend trade
- Don’t get emotional
- Don’t get reckless
- Stay out of the market ahead of a report
- Allow for no distractions
- Take a break from trading if you have had a losing streak
Common self-sabotage tactics of new traders:
- fear of failure
- fear of success
- needing to be perfect
- not believing in the methodology
- fear of being wrong
- getting back at the markets
- believing you’re invincible
- trading for the wrong reasons
- trading scared money
- resenting authority
- the wrong system for you
Deadly Sins of Trading
- trading against the trend
- greed
- pride
- envy
- dividend lust
- wrath
- capital destruction
Books
There are many good books that will help you to master the psychology of trading.
Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude
The Panic of 1907: Lessons Learned from the Market’s Perfect Storm
The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
Audioseminar on CD “Disciplined Trading” How to Trade your Way to Financial Freedom
Trading in the Zone : Maximizing Performance with Focus and Discipline
