Hi pros! today we will make the balance sheet of all the lessons we got through the 1000$ to 20K challenge. This is important because I think they already said to you :
"trading is 90% psychology and 10% Technical analysis" , indeed it is. Because a trader with the best technical analysis but poor trading psychology and mechanism will got very low performance or will stay a break even trader or even worst ! a loser :(
Why do you need psychology and mechanism to trade well? because it's like if you are in a car but you don't have break, or it's like jumping from an helicopter without parachute. You are going
to a complete disaster. Market psychology is essential for the good health of your trading account and also your physical/mental health (yes to keep losing and losing put you in a very bad mood and
can be potentially)
I will resume all and go deeper on psychology and mechanism on this text to get the best potential of this lesson, the chart is only partial. It's good to print them and have them always
on your desk while your trade
So lets begin !
1) maximum % loss reached per day = no more trade
Taking losses put you angry, emotionally weak and provoke reaction most of the time. you will be in a mind to recover your losses. But learn when to stop is the best thing to do if you want to survive. You'll have to deal with losses literally everyday of your trading career. learn to tame/manage them and you'll be always safe.
tips: cover your losses with your winning trade (by taking half) when you can. If you can't wait for the next day to trade.
2) adding to winners and don't touching at losers
This is the simplified sentence of "let run your winning trade and cut your losses". this mean don't cut your loss manually because you'll always use SL. This means don't bother you with losses (again), just try to add some trade on your winning trade when you already took half. This is a good potential wealth accident
3) dont look at the price when you take a trade
Don't stay blocked in front of your pc, go for other activity and keep an eye on the trade but not every seconds of every minutes of every hours ;)
4) don't chase the price (wait for a real opportunity, a real good plan), including fight the trend (don't force the market)
High quality trade gives you High quality potential of win. Focus on the quality of your setup and then market will surely give you your wage.
5) Find the most profitable SL on each market
to have a too short SL put you in losses more often, and when you have a too large SL you wait too much to take your win. Find the optimal SL for each market (ex: personally I use around 200 pips SL on each of my forex trade. Sometimes a little less, sometimes a little more but I try to have the optimal SL that gives me the optimal potential of winning rate.
6) no emotions, you win it's good, you lose it's ok
The market isn't your psycholog, you'll trade very bad and make a lot of errors if you have emotions while taking loss and wins (try to avoid them, emotions is human but get outside of the market when you feel your emotion taking control of you trading).
Don't rationalise every losses. (try to find the errors to upgrade your trading style but understand that sometimes market is simply irrational)
7) don't take a trade on the same market immediatly after taking some loss.
refers to rule 2 and 4. wait some hours or some days. Focus on finding other opportunities,you'll always find opportunity on the market. don't torture yourself if you don't took a trade at time or if you lose it and can't retry
8) avoid following other ideas
ideally make yours to become a better trader.
9) trade like a robot (no bad / sad moon, no angry, no revenge trade)
refers to rule 6. Even a small thing (like a dispute with a friend) can make you sink into the wall. Be totally calm and without aftertoughts
10)stay humble or the market will humble you
be satisfied with what you got by the market. if you did your average weekly performance be satisfied, if you make more be satisfied, if you make less be satisfied.
11)Make the choice to don't trade is also trading
when you feel bad about a trade (not sure) and you don't take it you preserve your capital. so you avoid loss. but don't be extreme and avoid every trade. it's exceptional
12) follow the trend
trend continuation trader have best result then countertrend traders. refers to rule 4, don't try to find every tops and bottom, If you found a reversal it's ok but don't focus on them.
principally use trend continuation method.
If you have something to add on this chart tell me and i'll be glad to add it. comment if you have some question, i'll be happy to answer with my little experience
"trading is 90% psychology and 10% Technical analysis" , indeed it is. Because a trader with the best technical analysis but poor trading psychology and mechanism will got very low performance or will stay a break even trader or even worst ! a loser :(
Why do you need psychology and mechanism to trade well? because it's like if you are in a car but you don't have break, or it's like jumping from an helicopter without parachute. You are going
to a complete disaster. Market psychology is essential for the good health of your trading account and also your physical/mental health (yes to keep losing and losing put you in a very bad mood and
can be potentially)
I will resume all and go deeper on psychology and mechanism on this text to get the best potential of this lesson, the chart is only partial. It's good to print them and have them always
on your desk while your trade
So lets begin !
1) maximum % loss reached per day = no more trade
Taking losses put you angry, emotionally weak and provoke reaction most of the time. you will be in a mind to recover your losses. But learn when to stop is the best thing to do if you want to survive. You'll have to deal with losses literally everyday of your trading career. learn to tame/manage them and you'll be always safe.
tips: cover your losses with your winning trade (by taking half) when you can. If you can't wait for the next day to trade.
2) adding to winners and don't touching at losers
This is the simplified sentence of "let run your winning trade and cut your losses". this mean don't cut your loss manually because you'll always use SL. This means don't bother you with losses (again), just try to add some trade on your winning trade when you already took half. This is a good potential wealth accident
3) dont look at the price when you take a trade
Don't stay blocked in front of your pc, go for other activity and keep an eye on the trade but not every seconds of every minutes of every hours ;)
4) don't chase the price (wait for a real opportunity, a real good plan), including fight the trend (don't force the market)
High quality trade gives you High quality potential of win. Focus on the quality of your setup and then market will surely give you your wage.
5) Find the most profitable SL on each market
to have a too short SL put you in losses more often, and when you have a too large SL you wait too much to take your win. Find the optimal SL for each market (ex: personally I use around 200 pips SL on each of my forex trade. Sometimes a little less, sometimes a little more but I try to have the optimal SL that gives me the optimal potential of winning rate.
6) no emotions, you win it's good, you lose it's ok
The market isn't your psycholog, you'll trade very bad and make a lot of errors if you have emotions while taking loss and wins (try to avoid them, emotions is human but get outside of the market when you feel your emotion taking control of you trading).
Don't rationalise every losses. (try to find the errors to upgrade your trading style but understand that sometimes market is simply irrational)
7) don't take a trade on the same market immediatly after taking some loss.
refers to rule 2 and 4. wait some hours or some days. Focus on finding other opportunities,you'll always find opportunity on the market. don't torture yourself if you don't took a trade at time or if you lose it and can't retry
8) avoid following other ideas
ideally make yours to become a better trader.
9) trade like a robot (no bad / sad moon, no angry, no revenge trade)
refers to rule 6. Even a small thing (like a dispute with a friend) can make you sink into the wall. Be totally calm and without aftertoughts
10)stay humble or the market will humble you
be satisfied with what you got by the market. if you did your average weekly performance be satisfied, if you make more be satisfied, if you make less be satisfied.
11)Make the choice to don't trade is also trading
when you feel bad about a trade (not sure) and you don't take it you preserve your capital. so you avoid loss. but don't be extreme and avoid every trade. it's exceptional
12) follow the trend
trend continuation trader have best result then countertrend traders. refers to rule 4, don't try to find every tops and bottom, If you found a reversal it's ok but don't focus on them.
principally use trend continuation method.
If you have something to add on this chart tell me and i'll be glad to add it. comment if you have some question, i'll be happy to answer with my little experience
when you find a setup don't change it, into the other side. avoid this comportment it's more negative for you than positive.
Instead of this learn from your errors