many years of mentoring and training traders, I've noticed that most beginning traders have the complete wrong mindset throughout the life of a trade. From the beginning, the middle and after the end of a trade, most people have their mind and focus on the wrong things.
Today's lesson will be a mini-tutorial on how you should be thinking and what you should do before, during and after an operation. Hopefully, this clarifies a lot of questions and confusion you may have had about what exactly what to do in the market and what your routine mental and physical trade should be similar
Before entering a trade
After it detects a high probability trade setup price action in the market, here they are the next steps to take and important points to consider and act accordingly:
Calculate the most logical placement of stop loss - Do not ever put your stop loss based on greed. Meaning, do not place too close to your entry just because you want to operate a size larger position. the need to halt the wider losses is discussed in this article. You should place the stop loss strategically so that trade has adequate space to breathe.
Accepting the possibility of loss - You have to mentally accept that any trade can lose. No matter how good it looks a configuration trading or trust that you are, you can still become a loser. If you really this fact is accepted not risk more than you are comfortable with losing on any trade and is not going to do things to try to 'prevent' a loss; as the movement stops at the break, too soon or maybe even trade without a stop loss.
You accept that trade needs time to play out - As I said, 'accept the loss of' mentally before taking it, then it will not be trying to avoid all the time and that does not fit your stop or otherwise interfere with its comercio.Simplemente accept that the market will fluctuate before (if) they finally reach its profit target. If you try to react to every small fluctuation in the market, it will be a disaster and so will your trading account. You have to accept that trade takes time to work alone before entering it, so queestar prepared to do nothing.
During trade it is where most people screw around. They sit for hours watching their trades, viewing graphs, etc. This is not healthy and is not part of proper negotiation or proper trading mentality.
Let the market to prove them wrong - Have a predefined level or places on the list that will show your business idea was wrong if the price moves beyond it, then stick to that level (level stop loss). Its aim is to leave the trade alone and either the market demonstrates its trade idea right or wrong.
As I mentioned earlier, there will be ebbs and flows favor and against their trade, this is normal. But if you sit there watching every small, probably will react by closing the trade early or make some stupid otroerror trade. Once you have decided on a trade setup and have all established parameters, you have to commit to let it play out, and that means you have to 'sit on your hands. The most important thing you can do once your business is all ready, there is nothing.
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The record of their operations once or twice a day is normal and should be done unarutina trading. Remember, however, most often due to nada.Si you find that you're constantly wanting to set profit targets, stop losses or close or add to positions, it is likely that too much thinking and being over-involved.
The key to remember for a trade is that if you do not leave the trade alone and let pass the time, their commercial advantage will not have the opportunity to work for usted.Cualquiera that is the reason I had to trade, let's play out and trust your pre-negotiation logic and make the market prove you wrong.
After The Trade Is Over
The first thing to do after an operation, win, lose or draw, is to relax for a while. Forgetting the market for a while, take a break, etc.
After you finish your last operation, which can be very hard to get back to where you need to be mentally in order to wait for the next high probability trade without trade surplus. the problem of overconfidence after winning trade is discussed in this article, and it is really a big problem for traders. A winning trade is almost worse than a loss of trade due to the fact that can make us overconfident and even 'arrogant' about our trade, which in turn brings us into operations low quality shortly after a winning trade .
After a loss of trade, it is also very tempting to jump back into the market in a trade setup of poor quality, or in any installation, because it feels the need to "bring back" the money they just lost. This is wrong, however, and is not suitable trading psychology. You have to understand and accept that each trade is only real and can potentially lose any trade; and if it is accepted that beforehand as I said above, do not be surprised if the result of the last operation is a loss. It's all about eliminating the feeling of being "surprised" by some trades to come out, because it is the feeling of surprise, either bad or good surprise, we can make emotional about the outcome of a trade.
What should be done after a winner or loser he is to remain disciplined and patient and stick to your trading plan; wait for the next setting high probability trade. For most people, the easiest way to do this is to withdraw from the lists until 'cool' and return to its "baseline" mental state, ie, not overconfident / excited by a winner or excessively angry / frustrated at a loss.
Remember, if you just make money, not lose it - the preservation of capital is crucial to business success! Take some profit off later this month. Removing a portion of its profits each month is a good way to reward yourself for proper business conduct and also ensures some money so you can not lose. After all, making money is the point of negotiation, so it makes no sense that some can not be removed regularly.
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