Trading Psychology : Lesson No . 1 ---- Ask Questions !!!!!!

Dear All, 

One of the most important factor  in Trading is Trading  psychology , Which  is also least addressed by trader’s , mainly traders  focus on news , trading methods e.g.  Elliot wave , trend following , counter trend trading, which Oscillator to use Rsi or Macd ?? etc. 

I am starting a series on Trading Psychology , so lets start

Why Trading psychology is the most important part for trading success ??  we will tell you  why ??

Trading is a Emotional / Mental  game quite similar to any professional sport e.g. Chess , Cricket , golf , boxing or wrestling . Which requires continous practice and positive mental frame work.

How you can improve as Trader ??

My first suggestion is  Ask Questions  or start talking to your self

People love to talk , to talk about mistakes of others or commenting on any financial news giving verdict that market will now go down, discussing economy ( though they didn’t undertand even abc of real economics ) , people become analyst in fraction of a week time ….i have seen new traders who are not having  more than 10 days of experience start recommending stocks to others.

 When u have spoken to yourself last time   ???

In context of trading inner dialogue of traders will eliminate most of the problem that trader face

Some of the question you “ Need “ TO ASK

Why you want to trade ???

How much return do you expect to achieve in a month / year ??

Have you ever ask why you have taken the trade ??

How much capital you are willing to loose if trade not goes in your favour ??

Is the trade you traded  was according to your trading plan ( I Bet most of the people who are reading  this post are not having any written trading plan ) ???

What kind of trading style you like to trade intra day / swing / positional ???

Are you a trend following or counter trend trader ???

What will you do if  6 trades back to back result in loss ???

Will you buy or sell your positions on recommendation by your friend or broker ???

What will you do if stoploss hits your positions  , cut your loss else hold your position in anticipation that you recover your loss ??

If you ask questions to you self and you have adequate answers  to it then you are in a process of becoming a consistent profitable trader over a long period of time .

But if you not been able to answers these questions , I think there is problem within you .

And you are trying to seek answer outside by watching Business channel, reading business newspaper , looking for trading tips from friend / broker / analyst

Trading is  quite similar to chess , after each move grand masters ask questions to himself, what risk I will be in if I take this move , they analyse multiple moves access risk reward to it and then they execute there move. So after self dialogue they execute there moves .

Trading is very similar to high performance sports , for example in cricket a batsman  make a game plan after juding what it the pitch look like , what kind of field placement is there , who is the bowler, whats the run rate  ..over here also he is continuously asking question to himself .

Much similar to trading  where trader can ask himself  , what market most likely to behave , which are sectors that are going up or down as per current price action , should I buy dips or buy at market price .

Trading lesson One : The more question you ask to yourself and if have answers to those questions as well  then only you will be successful in Trading .

I have started a New course On Trading Psychology  mail me @ abhaycfa10@yahoo.co.in else can call me 9873511276 to know more about it .

Thanks & Regards

Abhay Mehrotra