TRADING PSYCHOLOGY 101
TRADING IS A HIERACHY OF SKILL
At any given second, there's only so much liquidity. One needs to be faster than others to get in and out. One needs better strategies than others. The people who are good eat, the people who aren't get eaten. Like a sport, to make a living, one needs to be better than most others.
A trader making $1000 per day is taking that from others. They lost or missed out on that $1000. Almost no where else in the world do you get to play with pros as soon as you start playing. It takes time and skill improvement to be a pro. You get there by being beaten by pros for a while.
Time, Research, Practice
Getting better than others to make $$ requires putting in more intentioned work than others.
1. Most quit too soon. It takes at least 2 years to trade decently, usually longer.
2. Putting in time is different than practice. Work on specific strategies and then work on fixing mistakes one at a time. Doing trading related stuff isn't practice.
Trading-Related Failures
Traders fail because they're undercapitalized, take on too much risk per trade, can't take a loss when it's time, don't have a strategy, don't follow the strategy, over or under bet (position size), trade when they aren't supposed to, don't trade when they're supposed to, follow ''tips'', focus on results instead of the process...to name a few.
Psychological Reasons Traders Fail
Psychology affects everything we do as traders. If we're over-eager, over-confident, anxious, angry or get stuck thinking about our past trades, that'll affect what we see and how we trade. Trading isn't just practicing strategies, it's a journey of self exploration. Looking at how our thinking is affecting our trading. Most people never do that. Unless the psychology part is improved, all the strategies and trading books in the world won't do any good.
At any given second, there's only so much liquidity. One needs to be faster than others to get in and out. One needs better strategies than others. The people who are good eat, the people who aren't get eaten. Like a sport, to make a living, one needs to be better than most others.
A trader making $1000 per day is taking that from others. They lost or missed out on that $1000. Almost no where else in the world do you get to play with pros as soon as you start playing. It takes time and skill improvement to be a pro. You get there by being beaten by pros for a while.
Time, Research, Practice
Getting better than others to make $$ requires putting in more intentioned work than others.
1. Most quit too soon. It takes at least 2 years to trade decently, usually longer.
2. Putting in time is different than practice. Work on specific strategies and then work on fixing mistakes one at a time. Doing trading related stuff isn't practice.
Trading-Related Failures
Traders fail because they're undercapitalized, take on too much risk per trade, can't take a loss when it's time, don't have a strategy, don't follow the strategy, over or under bet (position size), trade when they aren't supposed to, don't trade when they're supposed to, follow ''tips'', focus on results instead of the process...to name a few.
Psychological Reasons Traders Fail
Psychology affects everything we do as traders. If we're over-eager, over-confident, anxious, angry or get stuck thinking about our past trades, that'll affect what we see and how we trade. Trading isn't just practicing strategies, it's a journey of self exploration. Looking at how our thinking is affecting our trading. Most people never do that. Unless the psychology part is improved, all the strategies and trading books in the world won't do any good.
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