I vividly remember how I started to trade 8 years ago, how I was learning, and the things that I was doing. Contemplating my old self, I notice a dramatic shift in my mindset in regard to trading. Staring at the charts and desiring to make money on price action, I wanted to become a consistently profitable trader. Making the priorities, I decided to sacrifice my time on studying technical analysis, totally neglecting trading psychology and risk management. Learning different trading strategies, I always came to the same result: the account went blown and nothing seemed to work. Strategies of fancy traders on YouTube, strategies from best-selling books on Amazon, nothing could produce any penny.
Not giving up and pursuing my ultimate goal, I came to the conclusion that I set my priorities absolutely incorrectly. To be honest, I always thought that trading psychology (like psychology in general) is s*cks. Moreover, I considered risk management to be kind of obvious, banal topic not deserving much attention.
Learning risk management techniques, applying them in day trading, I finally saw a glimmer of hope. Reading a dozen of books on trading psychology, contemplating my mistakes, and observing my behavior I noticed so many wrong, incorrect things that I did on a daily basis.
With time and practice, my mindset shifted. I realized that most of the strategies that I applied and that seemed losing to me, in fact, were decent. It turned out that mastery of technical analysis is not enough for profitable trading. Instead, that is just a tiny part of what must be learned.
Now, when my students ask me about the most important things to learn & study in trading, I always say: trading psychology and risk management go first, technical analysis is the secondary.
❗️ Do not neglect these topics and give them due attention. They are an essential part of your success in trading.
any recommendations on the trading psychology reads? its my Achilles heel, im right with direction, most the time, i panic sell (thinking im cutting losses short) and it turns back my way. paper trading monster, but cannot apply the same mentality to my $$
TopTradingSignals
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Yes, same opinion!
zy123
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I really appreciate the insights you've shared. I'll save this fantastic image as a reminder of what is most important in trading.