MY DEAR TRADER PLEASE
UNDERSTAND
👉How to use trading psychology to become a better trader?
👉Think long term
Set achievable goals. A realistic plan of what you want to achieve allows you to avoid excessive trading or becoming too emotional due to unrealistic expectations. This will also help you stay focused on the long-term goal rather than short-term gains or losses.
👉Take a break
Regular breaks can provide needed perspective and clarity on the current situation. If you make a series of winning trades, take a step back before getting carried away with overtrading. Additionally, sleepless nights exhaust you and cause you to make bad decisions. Breaks are beneficial not only for your wallet but also for your own physical and mental well-being.
👉Learn from your mistakes
Everyone makes mistakes when trading. Instead of getting angry or, worse, trying to recoup your losses with even more capital, go back and analyze what went wrong. Implement new strategies based on what you've learned from your previous mistakes and you'll be better prepared next time.
👉Set rules
Create a detailed trading plan and stick to it. This plan will describe how you approach different situations and help you control your reactions in times of stress. For example, you can use stop-losses and take-profits, limit the amount you can win or lose in a day, and adopt a risk management strategy that you are comfortable with.
With a clear plan in mind, you will know exactly what actions to take without letting an emotional reaction influence your decisions, ensuring you don't deviate from the original plan you set before entering a position.
