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The Mindset of a Successful Trader

11:33 AM Aug 27, 2019
Trading Psychology

It’s irrelevant how much cash you’ve got or how experienced you are at analyzing. It doesn’t even matter how much you believe you know about this business. Perhaps, the most significant element of this business is your mindset. Otherwise, you’ll never become a success. The wrong mentality is sure to destroy even the best-working strategy. You may have thousands of dollars in your risk capital but it won’t matter and you’ll definitely fail.

Let’s discuss how this element influences the results of your deal. There’s a whole big topic of psychology in this industry which you should study. Don't neglect and avoid it. Postponing the research, you just delay the success.

First and foremost, you need to note the rule of 3 M’s which the basics for proper trading:
  • Mind
  • Money
  • Method

Today, we’ll focus on a few aspects of a trading mindset like on a ladder to be wealthy. You’ll see how to set the head right about the deal and business in general.

The correlation: wealth vs. mindset

It’s all about the risk. When you risk more than you feel you may afford to lose, you’ll infect your deal with doubts, over-thinking, worries, etc. One of the principles on how to avoid losing is to leave your feelings out. The more a trader cares about the deal’s outcome the less is the chance he manages it properly. You’ll be consumed by your feelings and will certainly miss the signs of a possible flop.

Probably each trader is sure to go through at least some of the following emotions:
  1. Greed. It’s self-explanatory but you have to control it otherwise, it’ll take over.
  2. Euphoria. Although people don’t often see it as a bad thing, in trading, you should stay alert. As a rule, it’s caused by a few profitable deals and can lead you down.
  3. Fear/Doubt. You can’t get rid of it completely but track it down and work on the matter lest it brings you any problems.
  4. Hope. This is typically perceived as something positive but not here. Leave your head clear and objective.
  5. Regret. Sometimes you win, occasionally you lose. Just study what happened and use the experience to prevent future mistakes.
  6. Anger/Frustration. If you feel this way, you shouldn’t make any deals.

In addition, you need to be aware that there is a direct link to how much you risk and how you feel, you can also see an easy and effective way out. Start small when you go live. Get used to risking money, get a test-run of the system, and gradually use more. Track your emotions and work on them. When you feel any of the emotions in question, leave and avoid exceeding the dollar risk amount.

Don’t set expectations

Most beginners have these unrealistic expectations about how trading works, how hard it is to trade properly, how long it takes to get rich, etc. Too high expectations set the bar very high and start to feel like a burden. As soon as they vanish, you can be disappointed, sad, or even stay with an empty bank account.

Be realistic about the business and tendencies by studying the field. Get some books and magazines on trading. Subscribe to the useful newsletters from top bloggers, experts, etc. If you’ve got traders-acquaintances, ask them in order to lower the illusions. Do it before you begin trading.

It is the case when simple is better

Very often people tend to complicate things even if they notice an effortless way out. The same thing concerns this case. A trader keeps improving the strategy when actually, he’s making it more complex and far less reliable. Stay calm and use a simple strategy which should be based on the key trends and setups.

A successful trader also should have such qualities:
  • Keep an open mind;
  • Take great pains and be careful;
  • Be helpful;
  • Develop a win-oriented worldview.

After all, the conclusion is simple. A successful trader values the proper mindset as well as 3 elements: the strategy, money management, and realistic expectations. This combination is sure to bring you sky-high results.

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