Trading Psychology

Trading is a business - we must separate it from what is personal.Our emotions have a strong tendency to skew the decision-making process. Success, or failure, in a business can bring out the best and worst of emotions. In business, especially in this business, emotions must be kept in check, while clear thinking, experience, instinct, and skill are of essential importance. Your experience and skills must also lie upon a good foundation of risk management, a powerful drive to protect your trading capital, an ability to intelligently forecast price action, and a willingness to take appropriate risk.

And as such, we must treat it like one. To the novice, the words: patience, discipline, hard work, and determination may sound too simple and trite. Many novices believe that there must be some other, more complicated (or easier) way to excel. Unfortunately there isn’t. Businesses have their own “ups and downs”, you can expect that trading is no different. You must be willing to look at the “bottom line” and see where you can cut costs, implement better strategies, account better and understand that all businesses need to be properly capitalized

Trading requires continued education - In order to excel at trading, you need to continue to study and learn. Especially as a novice, it is important for you to get familiar with the market. Because markets are always on the move, one must strive to be current on market activity. One will find that in many cases, market movements are remarkably simple. You will recognize patterns that repeat themselves. Moreover, because they do, the experienced trader will quickly act to use them as an opportunity to profit. You will also learn that patterns occasionally fail to follow through. How well the trader reacts to failed patterns is one of the key measures of trading excellence. Developing a solid “feel” for market movement should be among the first goals of the novice trader. This “feel” is gained with patience, discipline, hard work, and determination.