TRADING

MASTERY

THE

PERPETUAL BOND BETWEEN

PROCESS, EMOTION &

PSYCHOLOGY

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TRADING PSYCHOLOGY: MASTER YOUR MINDSET IN TRADING We strongly believe that Trading Psychology is with Risk Management the most important things in trading. On the other hand, it is also the least popular topic to talk about. Many people can spend countless hours looking for that perfect strategy, but if they cannot set up their minds the right way, they will never become profitable traders. In this Trading Psychology course, we are going through handful of different topics that were covered by our Trading Psychologist.

WHY IS TRADING SO DIFFICULT? Most trading sites will tell you that all you need is to purchase a trading system or take part in a weekend-long training and you will be well-off for the rest of your life. If a trading guru offers a quality system, it should, in theory, be no problem to profit by just replicating the system correctly. However, most traders are in fact not driving Maserati’s. So, where is the problem?

The more experienced traders mostly agree that the greatest problem is not their trading approach but their psychology and discipline. In short, they are not disciplined enough to do what they have set out to do. In this part, we will be discussing why trading is so difficult for us as human beings.

OUR MIND IS PROGRAMMED TO OPERATE BASED ON CAUSALITY From an early age, we are used to the fact that a particular action will produce a particular reaction to which we usually do not have to wait for too long.

For example, if we studied for a test, we expect a good grade, or if we bought a bus ticket, we expect to be able to ride the bus.

How does it work in trading? In trading, there is no direct proportion between the number of hours spent studying, trading itself and the money earned.

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Unconsciously, we expect that spending often even many hours a day studying and trading, that the profits must be realized almost automatically. When profits are not made, we needlessly start to feel frustrated.

RESISTANCE TO THE UNKNOWN In everyday life, there are things where we do not think about twice. For example, we know that 2+2 = 4, which is a truth that does not change over time. On the contrary, every moment is unique in the markets. Yet, most trading systems rely on models that have occurred in the past. The traders who created these trading models with their decisions will never be trading in the same composition or making the same decisions. The markets, therefore, form an incredibly varied environment where we under no circumstances can ever be sure where the market is going to turn.

Despite that, we incessantly try to apply to the markets price patterns obtained in the past. In essence, there is nothing wrong with that, but it is always necessary to keep in mind the fact that historical behavior of the market has absolutely no connection to current market action.

OUR SUBCONSCIOUS Our minds are made up of the conscious and the subconscious, of which approximately 10% are conscious and 90% of our personality is formed by the subconscious. Consciousness provides for tasks we perform consciously. For the male population, this is a maximum of one operation per a given moment. On the other hand, the subconscious provides for an enormous number of tasks we do not do consciously. These may include very basic tasks or behaviors learned over time which we initially performed consciously.

Surely, everyone knows this: we are walking around town, and we have an important phone call which we must consciously concentrate on. Meanwhile, the subconscious mind ensures walking, avoiding other people, stopping at the crossing, orientation, and countless other things. When the phone call is over, we may not even remember the route we took. The primary task of the subconscious mind is the protection of our well-being.

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The bad part is that the subconscious mind also protects us when trading. As soon as I give a couple of examples, it will all be immediately clear.

• Premature termination of a position– if trading causes us stress, the subconscious wants nothing other than to rid us of stress. That is why it pushes us to withdraw from a position.

• Freezing before entry – the subconscious wants to eliminate the stressful situation; therefore, it makes us reluctant to enter.

• We accept low profits – any positive figure as the outcome of a trade causes joy. At the same time, the subconscious does not want positive numbers to change into negative ones – God forbid!

The power of the subconscious is enormous: we can spend a whole week promising ourselves that we will not move stop-loss prematurely but the minute it comes down to it, we make the same mistake again. The very act of shifting stop-loss is often done completely automatically. When we think about it, both the subconscious and the trader want the same thing – the profits, but the path to profits leads through situations that the subconscious is trying to eliminate.

WHY IS TRADING PSYCHOLOGY SO IMPORTANT? You probably heard that 90% of the traders fail. A lot of people might think it is because they don’t know what to do. This is not true; they just don’t do what they know they have to do.

LET’S START WITH A QUIZ You have two traders, Trader A, and Trader B. Trader A has the best trading strategy out there, but very poor self-discipline and risk management. Trader B is using very basic strategy, he has a basic understanding of trading, but he has bulletproof trading psychology and risk management. Which one is going to be more successful?

If you have guessed Trader B, you were right. With the best strategy in the world, but with poor trading psychology, you are going to be easily outperformed.

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TRADING PSYCHOLOGY – BATTLE OF EMOTIONS Much has been written about the theory of trading psychology. In this article, I focus on some of the issues that may arise, and some specific exercises will be shown on how you can fight these issues and how they can be eliminated. What is most important to acknowledge is that emotions associated with trading emerge from something.

Emotions don’t arise from the air; emotions arise from the thoughts we put in our mind and from biological reactions triggered by these thoughts. If we think about the fact that trades may not end up with a gain, we start to worry, so a negative thought and emotion of fear appears. But this is not the beginning of the problem. Negative thoughts also appear from something. In this case, negative thoughts result from poor previous experiences or low self-esteem. If we had enough confidence, our thoughts wouldn’t turn to previous bad experiences thinking that we failed before. In a perfect scenario, we would take it as a lesson and transform the negative emotions into a productive thought that would help us improve in the future. Likewise, if we feel demotivated, the cause may be a lack of inspiration that stems from poorly set goals.

Another problem may be a lack of discipline. But if we compare it to my favorite example of this – building a house – the discipline is like the stairs from the basement to the first floor, while emotion management is building the floor, so we have a place to put the stairs.

For those of you who do not know what it means, imagine trading is like building a home. The first step is to select the land that in this case represents trading in general. Then we choose the type of construction, which means we decide what we want to trade. Then comes the design itself from the architect, a plan to start building and selection of a construction company that in this case is the strategy we choose based on our knowledge. Then we can build the foundation, which is one of the most important, yet often neglected parts of trading psychology – our emotions - or how we follow our chosen strategy and discipline needed to execute our strategy. Only then on these strong foundational principles can build another floor that represents profits. Those can increase unlimitedly with each floor.

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HOMEWORK BREAK I have a task I think would be a great exercise for you: Write down why you began with trading in the first place and what you enjoy about it. Every time you aren’t sure if your time is dedicated in the right direction, go back to this list, and remind yourself why you do what you do.

DOT METHOD As we examine our emotions and how we cope, I’d like to introduce to you the method called DOT (doing – outcome – thinking) that was introduced by an American psychologist named Aaron Beck. Its essence lies in considering all the available facts first and based on the rules we set, we then simply act. Then something will happen, an outcome, in our case a profitable or an unprofitable trade and only after that there comes the moment where we can give space to emotions. Here, I would like to mention that you need to think of trades as profitable or unprofitable, not as successful or unsuccessful. Even a losing trade can be successful. If you have managed to follow your strategy and your rules, you have not been dominated by emotions and have taken the trade as a lesson, then this loss-making trade is only a statistical item, a cost to trading just like any other activity. Every time you decide which trade to take, evaluate all the facts you have available and then decide into which trade to enter. Tell yourself what a computer would do in your place because a computer doesn’t have emotions and makes decisions based only on the data set in the program.

Enter the trade and follow the limits you set. Only after that give space to your emotions, and in case of a loss, rationally evaluate why it happened, how to prevent it next time or praise yourself in case the trade turned out profitable. Take your time to absorb the emotions, for example, set your phone for 2 minutes and let yourself be fully dominated by emotions. Consciously imagine letting off emotions when the alarm goes away. Do not think about past trades and do not enter another trade unless you have a clear head. Exercise: Test this methodology every day. Write down how you are doing and always review everything. Write yourself feedback as if you were writing it to someone else.

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MENTAL GAME OF TRADING PSYCHOLOGY At the risk of embarrassing myself I thought I might share some of my personal thoughts as I began trading Forex. It makes me laugh because it’s hard to believe now, what I felt then. Enjoy!

THE BEGINNINGS “I got into trading due to some very persuasive banter from one of my most respected Mentors.

The first time I ever saw a chart it looked like astrophysics to me. I remember staring at the screen and back at him and wondering how he (Corey – my coach) could understand anything in all those hieroglyphics while I would only see numbers.

I couldn’t define anything I was seeing; it was like a Picasso painting. Just numbers and lines and blinking colors and symbols that – I believed – only some chosen people could translate into something useful. It was overwhelming, and for the first time in my life, I felt stupid for not being able to put any of the things I was seeing together. Shortly after I began my training in FX, I heard rumblings around the office about massive gains that the senior FX Traders had made that week. That certainly piqued my interest, and I decided to reinvest more time into this mystical art of minting cash. While many investors I’ve met over my two decades in the industry have claimed to be pros and genuinely wealthy, I’ve learned that only a portion of those have had the results and knowledge to back those assertions.

I took a new approach to my FX training – deciding to BELIEVE before every study session that I COULD DO THIS! I used to try to have my math students go through the same mental exercise before any homework or exam. This space in my psychology was the most productive with regards to the times when I absorbed the most material.”

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• Always know the risk/reward ratio of every trade. If a trade doesn’t have adecent ratio, then that trade isn’t worth pursuing.

• Never make a trade where the loss (risk) is too big to stomach.• Place your stop-loss at technically validated levels (below the swing low/

above swing high), don’t use a predetermined number of pips for your stop.• Never go all-in on a trade.• Don’t enter a position because you feel like you must trade something.

Trading is about patience and should be done on purpose.• Only trade with a planned strategy.• Always stick to your stop-loss! When a trade is going against you, never

touch your stop-loss, it is okay to take a loss. There’s always another trade.• Look at losing trades as a cost of doing business, study your losses and learn

from them.• Never feel emotional about your trades – you’re not married to them. When

you are feeling overly bullish or bearish, take a step back and re-analyze thesituation from the opposite perspective.

• Avoid over-trading.• After closing an extremely profitable or unprofitable trade, take a break

and clear your head before returning.• After a loss, avoid going into the next trade expecting to make that loss

back, plus this expected gain. Leave past trades there.

HOW TO DEAL WITH FEAR OF MISSING OUT (FOMO) Controlling emotions in trading has always been difficult. We all know what we SHOULD do, but as human beings, we typically do what we WANT to do, or what comes more naturally. Remember the time when you waited for the price to come to your support level to go long? Somehow, price always seems to reverse a few pips before your entry point. You’re nervous, scared, not thinking properly. In the heat of the moment, you go long at a price point 10 pips above your original entry level. After you have entered, you tell yourself: ‘Instead of risking 10 pips on this trade I now risk 20…’. Then what almost always happens? The price ends up reaching your original entry goal after all and now you’re sad that you lacked the discipline to wait.

TRADING PSYCHOLOGY GUIDELINES Personal guidelines that I stick to while trading – feel free to add, subtract or edit:

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DISCIPLINES TO FOLLOW FOR SUCCESSFUL TRADING: • Educate yourself on

how the marketworks andthoroughly analyzeand plan your trades.

• Create a trading planand trade that plan.

• Do not deviate fromyour plan withoutdeveloping anothercomprehensivetrading plan.

• Quantify any potential loss.• Don’t risk everything on one trade and do not overtrade your account.• Remain focused and do not marry a trade.• Be quick to change directions if that is what the chart is dictating.• When in doubt… Stay Out! A common problem that most traders face is

trying to force the market to move in their personal direction. This is a veryunsuccessful and devastating strategy. Never try to force the market to dowhat you want it to do. Recognize how the market is moving and trade inthat direction.

• Create a trading plan and trade your plan! It’s not about what youwant. You must learn to want what the market wants, then trade in thatdirection. Want what the market wants, not what you want.

Great Traders win their trade first and then enter the market. Defeated traders enter the market and then seek to win.

WHEN TO PASS ON THE TRADE: You should pass on the trade when:

• You are tempted to get in for whatever reason NOT in you Plan.• It requires a stop-loss order that does not meet your risk management

protocol.• If you have not had the time to make a trading plan that includes:

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1. A clear entry point 2. A stop-loss order 3. A reasonable target; but remember, price action trumps any target theory.

• If for any reason you feel uncomfortable. • If you are not clear in what you are doing. • If you feel you are being emotionally self-forced into making the trade or, • If someone else is forcing you. • If you cannot afford the loss.

RISK VS REWARD Example: Profit Factor of 1.0, in order to net 100 pips you need:

With 50 pips at risk per trade over 10 trades, you need a W/L ratio of 60%.

WINNING TRADES 6 6 X 50 = +300 pips LOSING TRADES 4 4 X 50 = - 200 pips NET PROFIT +100 pips

Example: Profit Factor of 2.0 in order to net 100 pips you need:

With 50 pips at risk per trade over 10 trades, you need a W/L ratio of 40%.

WINNING TRADES 4 6 X 50 = +400 pips LOSING TRADES 6 4 X 50 = - 300 pips NET PROFIT +100 pips

Example: Profit Factor of 3.0 in order to net 100 pips you need:

With 50 pips at risk per trade over 10 trades, you need a W/L ratio of 30%.

WINNING TRADES 3 6 X 50 = +450 pips LOSING TRADES 7 4 X 50 = - 350 pips NET PROFIT +100 pips

Obviously, the lesson here is to make the trades with a higher reward to risk potential.

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ARE YOU MOTIVATED IN TRADING? Working on your motivation in trading is a very important part of mastering trading psychology. Setting up achievable trading goals will help you stay motivated and bring much better results. Additionally, I found that having interactive sessions with my coaches helped recharge the ‘motivation batteries’.

REFLECT ON AND ANSWER THE FOLLOWING QUESTIONS: • What are the latest achievements I am proud of?• What drives me most in my life?• What is the missing part to achieve my goals?• When I go to bed in the evening, am I looking forward to the next day?

Let’s start with the definition of motivation. Motivation is the driving force of a psychic character that sets human behavior and activity in motion. It’s the force that makes us get out of bed in the morning, what drives us in our daily life. The force that helps us to chase our dreams. We are almost never motivated by a single motive but always by an array of motives.

So, when exactly is a motivated behavior activated? When the motive is strong enough? When the probability of reaching the goal is high and when the value of the goal is satisfactory.

What happens when the motivation is low?

Some of the underlying causes include poor goal setting that doesn’t inspire us enough and low self-esteem that follows after several losing trades. Let’s first discuss proper goal setting.

Think about your goals, whether you have just one ‘ultimate goal’ or several short-time goals. If they are not written down in your Trading Plan, let’s get them in there. It is important to have challenging yet realistic goals. The best goals are those that are slightly higher than your current level – they inspire hard work and if you constantly pursue them, they are achievable.

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Every goal needs to be written down. By writing something down, a thought changes into a specific wording and there is no danger that this thought will disappear seconds or minutes later. Go one step further and pin your written goals somewhere where you can see them, it will motivate you more to accomplish them. Continuous evaluation and feedback are also easier for written goals.

Goals should be divided into daily, monthly, and annual targets. It is important to distinguish between progress, performance, and outcome goals. Progress goals focus on improving technique, strategy; thus, how much time we spend educating ourselves, how much we think about the process and details involved in our chosen strategy.

Performance goals focus on – you guessed it – performance: how we act, how we think, how we can handle the technical and psychological aspects of trading, while trading.

Outcome goals place emphasis on the outcome, on what we want to achieve. They focus on long-term profitability. They can increase short-term motivation when a person is not actively trading. However, focusing on the outcome goals before or during trading often leads to increased anxiety and insignificant distracting thoughts. Progressive and performance goals are important as they can be set and adjusted more accurately than outcome goals. Nevertheless, the combination of all of these goals (progressive, performance, outcome, short-term, long-term) can bring better results than just setting one type of goal.

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Every goal, whether progressive, performance or outcome should be determined according to SMARTER principle. Many of you certainly know SMART goals, but in the last few years, two more principles have been added. So, what exactly do these letters mean:

Goals should be recorded in a systematic manner, kept in a visible place, and continuously evaluated and adjusted. Never forget to reward yourself for the effort and energy you put into accomplishing your goals. I remember my initial goal was ‘never withdraw funds from the trading account’. Then I made a massive gain on a trade in a matter of 30 minutes. I decided to ‘make the gain real’ by rewarding myself. Best decision I could have made. I am reminded of that achievement every time I drive now, and it helps me stay motivated.

TRADING WITH LEVERAGE AND ITS IMPACT OF TRADING PSYCHOLOGY I think leverage is quite possibly the most important factor in all of trading. It controls everything about your trading career. Think about it. When we overleverage, there is a little part inside of us that makes us feel we are doing something wrong. A survival instinct that we’ve made a mistake and/or are in danger. This feeling is absolutely happening for a reason and is valid. We are, in

A – achievable/acceptable R – realistic T – timely/trackable E – evaluated R – rewarded

S – specific M – measurable

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fact, in danger. We have risked too much equity and it could become an awfully bad day.

TRADING IS A % BASED GAME. Yes, you may have a percentage-based chance, hit a huge trade and make an incredible return. But how long can that trading system last until it does more harm than good? That is why that one ‘perfect’ trade, isn’t always so perfect. I can personally say that I have done that exact thing only to keep trying it and wiping out my account. Luck is not a sustainable equation. That post account depletion moment is terrible, yet completely avoidable. The first step is that feeling, the second is the psychological attack. We all know that feeling of not being able to leave the screen in fear of what may come. At that point, we have totally lost. The money is now controlling us rather than the appropriate relationship. Once again, that is not trading. It is high-class gambling, which is why it is so important to leverage properly.

FOCUS ON TRADING, NOT MONEY. The vision of money is the main driver for most of the traders in trading, but it does not bring anything good. It seems that when we focus on money, emotions enter trading much more prevalently. Try to start focusing on trading for pips instead. If you must, set up the display of profits and losses in pips instead of in dollars. Looking at pips instead of money might help your emotional attachment to money in case you are in a floating loss. Focus only on the number of pips, not on the money. You will appreciate this idea as your account gets larger and larger, and the dollar figures become daunting.

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90% of traders I coach come to me asking how they can defeat it. Wrestling again and again with their trading, they come out of the fight with a blood nose and a lowered self-esteem. Try to think in the following terms:

EMOTIONS How do we get rid of emotions? This is a tough question because nobody likes the answer. We don’t. Emotions are scientifically impossible to get rid of, but they can be regulated. What I really believe is the problem with a trader is not the emotions they feel, but another “E” word.

EXPECTATIONS Expectations in their performance, expectations from the market, and expectations of how their life should pan out. It is with this Expectation that another detrimental E word comes in.

EGO With Ego and Expectations, a trader will defy what is clearly right before their very eyes to prove to protect their self-identity at the expense of their performance. Emotions get a bad rap. Traders forget that emotions are what their very character and strength. Emotions are what got them into trading. It is emotions of hope that got them thinking about a better life. Emotions of courage that made them decide to take this path. In fact, it is emotions too that nag us to keep our risk exposure in check for fear of overleveraging and getting a margin call.

Life, in general, must have a healthy balance of each. Ego, Expectations, and Emotions. In fact, a healthy ego will tell the trader that he can beat the odds and become one of the coveted profitable Trading Rock Stars. A healthy amount of expectation tells us the reward is worth it if we manage the risk. A healthy amount of expectation that revolves around how we expect ourselves to do our best but anticipate bumps along the way. A healthy amount of emotions give us data on what our intuition is telling us about trade and pulls us out of funk once again after a drawdown.

The expectation that traders MUST be emotionless sets them up for failure because it’s an impossible objective to attain. What we need is an acceptance of what can happen and to learn how to use the norm to our advantage. After all, “Every battle is won before it is fought” and denying what can happen during the

THE DETRIMENTAL “E” THAT SABOTAGES YOUR TRADING

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encounter is a surefire way to lose. Instead of asking our traders to ignore their emotions, we believe it is better to instruct how to face them.

PLAY THE TRADING GAME Every now and then, a trader ping pongs between two spectrums. Since trading is mostly about problem-solving of the self, when we “fix” an issue, we often wonder if we created another issue in our trading system.

I would say that a huge number of traders have a problem with overtrading. Trigger happy with their portfolio, jumping in and out to feel the rush of the craft only to crash down with losses. The mistake is evident. Greed and impatience.

However, another camp has the exact opposite problem. Their issue is a sneaky one that often disguises itself as well. Paralysis by analysis. As much as it is easy to overtrade, the tendency to stay paralyzed can be a sweet slippery trap too. The abundance of information on YouTube, Twitter, countless books, articles, and the rest assists in masking this paralysis as hard work. Don’t be fooled. Too much analysis functions as an overcompensation for the insecurity a trader gets from the uncertainties of the market. Instead of looking inward at what they can do to get them ready to sail their ship, paralyzed traders want to find a way to control the tides. Yet, just like any man who knows sports, sitting on the couch watching hundreds of hours of ball games will not make them a better athlete. Trading is a performance activity, just like athletics, and to be a part of the game, you need to perform. “The only way to learn how to play the game is to play the game.”

There are many things that books, videos, or white papers like this one cannot teach a trader. We know more than most that theoretical discussions at school did not translate to real-life skills. It is no different in trading.

For our knowledge to become our skills, there must be a lot of practice. Fear of losses cannot be defeated by more time away from the action. It is only when we are faced with it and when we have dealt with it that we’ll learn that it was not as world-shattering as we’d imagined. If our risk management is intact, there is nothing to lose, but everything to gain. A gain of either profits or a gain of a better experience. Either way, the only way to roll with the punches is by getting in the ring.

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HERE ARE A FEW TIPS: • Have a limit. Before you begin back testing, decide on how much you need

before you can jump in and apply what you’ve learned.• Visualize all scenarios. When you enter a trade, it helps to accept that a loss

can happen. Visualizing and preparing for this will stop catching a traderoff-guard and will instead transform the trader into someone who canadapt.

• Every time after a trading day, especially a losing one, be completely honestand ask yourself if the good and the bad happened out of your skills orbecause of the market. Everyone can win and lose, but which one is due toluck?

• Just do it. Regrets are more painful than should-haves. Saving yourselffrom potential losses through analysis-paralysis can seem like a goodchoice until you realize you are stopping yourself from opportunities too.There is no way around it. If you want to be a trader… Trade.

SO, WHAT DIFFERENTIATES A PROFESSIONAL FROM AN AMATEUR TRADER? Trading might have a low barrier for entry, but it has one of the highest barriers to profitability. I’ve had experience coaching both professionals and amateurs. It’s safe to say that none of them came into trading with the goal to lose. Obviously, we want to make money, and this has made a professional and an amateur essentially the same. The motivation remains true across all levels of traders. The wide gap between the two, however, is just a minor shift of perspective.

In my view, the top 5 differences between a professional trader and an amateur trader are:

PROFESSIONAL TRADERS RESPECT THE CRAFT Professionals understand that there are people who make a living through trading and give it the respect it entails. It may be a game of probabilities but with a systematic approach, consistency can be achieved. Amateurs are hyper-focused with the easy money, forgetting that this is a professional field. They typically brush off as normal behavior spending money and time for a degree that will take

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years to establish but enter the market as traders expecting to make money with almost zero preparation.

PROFESSIONALS TREAT TRADING AS A BUSINESS, NOT A HOBBY The main difference between a business and hobby is that in a business, you dissect your activity objectively and expect an ROI. Hobbies are things we do just for fun and this is the case for amateurs who come into the financial markets with greed. Professionals, on the other hand, record their transactions, research their ideas, study their results, and execute a well-thought-out system or trading plan.

Another aspect to consider is how deep their interest runs. A business needs commitment, while a hobby is something someone does only when they feel like it and just for the emotional kicks it delivers. This means showing up day in and day out even just for practice and accepting that any business takes the time it needs to grow (just like our portfolio).

PROFESSIONALS ARE PROCESS-FOCUSED, NOT OUTCOME-FOCUSED Since this is a business, professionals use their outcome as a hint on how to improve their process. The end goal is not the end-all-be-all factor of their trading, but an indicator of how their system is currently performing.

Professionals act like professionals every day, they show it through their actions with or without a trade. It is in their preparation, their execution, and post-trade analysis. Like a well-oiled machine, a professional trader does not stop being a trader when the market closes. Their work ethic and pursuit of excellence are what sets them apart when the amateur ‘clock watchers’ leave for the day.

PROFESSIONALS MANAGE RISK, AMATEURS GAMBLE Both professionals and amateurs lose, the difference lies in the amount and the response to that loss. Professionals have accepted how much they are willing to lose even before the trade begins and will ensure that it does not go beyond that. Amateurs rely on luck. To them, the risk is an afterthought, a remote consequence, a factor to be avoided next time. Thinking they can beat the system by finding a Holy Grail of indicators, they are sent on a wild goose chase that never ends. Professionals, on the other hand, focus on a tested and proven system that works and then mitigate

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the inevitable losses that can occur. Losing is not a problem. It’s letting the losses get out of hand that is. And while the amateur is on his 10th brand new system, the professional is quietly and consistently mastering his one and only.

THEIR HORIZONS DIFFER Amateur traders are here for the quick money and it shows in their trades. Every single loss hurts because they’re looking for that one trade that could put them in retirement. Their tactics are hurried, and their goal is to get things done as fast as possible. Professionals have a much longer time horizon. Understanding that this is something they are willing to develop for years puts them at a more objective state. No single trade means too much aside from the lessons it can give, and every loss is a chance to grow rather than a blow to their ego.

With the fresh batch of new traders coming in, the distinction between a professional and an amateur becomes much more apparent. It’s important to note that new traders can act more professional compared to veteran traders who stubbornly refuse to improvise and adapt according to the new market environment. Being a professional and being an amateur is not in the years of trading. It’s in the mindset and in their process that separates them from the rest of the crowd.

IN CONCLUSION Without a doubt, having technical skills to understand charts is critical to success for a Trader; but we should never overlook the psychological aspect of trading. Developing your trading plan, following important trading guidelines, and keeping and referring back to your trading journal are the crucial components of your trading success and your mastery of trading psychology.