Hello Traders,
As we know trading is one of the most challenging professions in the world and not only do you have to do your research and own due diligence on a technical aspect, you must ensure your mind/emotions are on point as it is the most common reason traders lose money in this industry.
I wanted to share a bit of information from a mental and emotional standpoint about breaking down the 3 levels of your Psychology Game.. No matter how skilled one trader is, everyone has an area that could improve and everyone will make mistakes. The 3 main mistakes we as traders make are:
To summarize this chart, the differences between 'B' and 'C' game is that in the 'B' game you have the impulse or thought to make a 'C' game mistake, like closing a trade too early or forcing a trade. Instead you retain the presence of mind and emotional control to avoid it. In your 'C' Game, your emotions are too strong and you cannot stop yourself from forcing trades or cutting profits short. While in the 'A' game, the impulse or thought doesn't happen, or its too small you barely notice.
Your goal to as a trader is to eliminate and correct your performance errors that cause your 'C' game. You cannot by escape how much of the gravitational force 'C' game has by focusing on improving just your trading skills and knowledge. You will continue to make the same errors (possibly different ones, but errors are errors) which will create a level of excess negative emotion in your mind.
Creating and plan of emotions to examine & review on a daily basis will help you correct your failures and fill you with a different type of emotions, happy ones. By writing down your thoughts of what is going on before, after and during, you start breaking down the backend of your trading and your decision-making becomes much easier and more confident. Creating a plan of your emotions could come with a variety of things, some of the most common ones to watch out for are:
-Trigger (eg. Swing trading forex)
-Thoughts (eg. I can't believe I got stopped out, it has to go up!)
-Emotions (eg. I want revenge on any trade that I lost which I know I should have won!)
-Behaviors (eg. Overly focused on one position)
-Actions (eg. Constantly looking at P/L)
-Changes to your decision-making (eg. I need to get my money back, I need to trade more)
-Changes to your perception of the market opportunities or running positions (eg. Your going off prediction rather then reaction)
-Trading Mistakes (eg. I'm taking the same trade over and over, until its clear I'm getting no where)
Journaling down these emotions and also reviewing them on a day to day, trade to trade, basis, will help your trading game improve and make you become much more successful.
I hope this has given a brief insight on how trading psychology plays a huge role in our careers, please leave a comment and share what level of game you are!
If you felt this has shared some good information, please hit the like button and follow me for more of these!
Thanks
Trade Safe!
As we know trading is one of the most challenging professions in the world and not only do you have to do your research and own due diligence on a technical aspect, you must ensure your mind/emotions are on point as it is the most common reason traders lose money in this industry.
I wanted to share a bit of information from a mental and emotional standpoint about breaking down the 3 levels of your Psychology Game.. No matter how skilled one trader is, everyone has an area that could improve and everyone will make mistakes. The 3 main mistakes we as traders make are:
To summarize this chart, the differences between 'B' and 'C' game is that in the 'B' game you have the impulse or thought to make a 'C' game mistake, like closing a trade too early or forcing a trade. Instead you retain the presence of mind and emotional control to avoid it. In your 'C' Game, your emotions are too strong and you cannot stop yourself from forcing trades or cutting profits short. While in the 'A' game, the impulse or thought doesn't happen, or its too small you barely notice.
Your goal to as a trader is to eliminate and correct your performance errors that cause your 'C' game. You cannot by escape how much of the gravitational force 'C' game has by focusing on improving just your trading skills and knowledge. You will continue to make the same errors (possibly different ones, but errors are errors) which will create a level of excess negative emotion in your mind.
Creating and plan of emotions to examine & review on a daily basis will help you correct your failures and fill you with a different type of emotions, happy ones. By writing down your thoughts of what is going on before, after and during, you start breaking down the backend of your trading and your decision-making becomes much easier and more confident. Creating a plan of your emotions could come with a variety of things, some of the most common ones to watch out for are:
-Trigger (eg. Swing trading forex)
-Thoughts (eg. I can't believe I got stopped out, it has to go up!)
-Emotions (eg. I want revenge on any trade that I lost which I know I should have won!)
-Behaviors (eg. Overly focused on one position)
-Actions (eg. Constantly looking at P/L)
-Changes to your decision-making (eg. I need to get my money back, I need to trade more)
-Changes to your perception of the market opportunities or running positions (eg. Your going off prediction rather then reaction)
-Trading Mistakes (eg. I'm taking the same trade over and over, until its clear I'm getting no where)
Journaling down these emotions and also reviewing them on a day to day, trade to trade, basis, will help your trading game improve and make you become much more successful.
I hope this has given a brief insight on how trading psychology plays a huge role in our careers, please leave a comment and share what level of game you are!
If you felt this has shared some good information, please hit the like button and follow me for more of these!
Thanks
Trade Safe!
