If you are one of the many traders who find themselves constantly taking their trading account to zero after refinancing, today’s article is for you.
This might be the most important trading article you’ll ever read because I’m about to show you how you can finally stop repeating the same trading mistakes over and over again. Learning from our trading mistakes and actually making constant changes to what we have learned is the key to making money consistently in the markets. If you don’t learn from your mistakes, you will be like a hamster who is constantly spinning on a hamster wheel but is not going anywhere.
Read on to find out how I stopped making the same trading mistakes that are probably hurting you right now…
Table of Contents
Acquire the right trading mindset.
You may have read other articles I have written about the right trading mindset, but its importance cannot be overstated. All trading success begins with acquiring and perhaps more importantly (and more difficultly) MAINTAINING the right trading mindset or trader psychology.
Everyone says that “emotions are the enemy” of trading success and similar jokes. But I feel this is too general, let me explain why I think so…
First, emotions are Everybody bad in the field of trading, in fact they can be useful and sometimes very pleasant. For example, once you develop a strong sense of trading with intuition, you will eventually develop a kind of internal “early warning” system for when the trade is wrong, in other words, your fear works in a good and useful way. . However, fear can also hurt you if you become afraid to take a perfectly good trade setup, etc. So as we can see, you can’t just say “emotions are all bad” when it comes to trading.
Whether or not you allow your emotions to affect you in a negative way can make them dangerous, not the emotion itself; in an important distinction to make. Being aware and aware of your emotions while trading will allow you to make adjustments and control your actions in the market, and this is probably the most important thing you can do to help yourself stop making the same trading mistakes over and over again. Most trading mistakes come from allowing our emotions to negatively influence us, so if we become more aware of our emotions while trading, we can work on making sure they don’t influence us to deviate from our trading plan.
Learn how to properly manage money.
If you are constantly risking too much on every trade, your emotions and mindset will constantly harm rather than help your trading performance. Indeed, money management is one of the most important keys to staying calm and collected and not allowing emotions to negatively influence us while trading.
In my opinion, controlling yourself in the market begins with proper management of trading funds. As a result, I see money management as the foundation of good trading thinking, because if you’re not always worried about how much you “might” lose on a trade, you won’t let your emotions get in the way.
You must risk an amount per trade that will not cause you emotional “pain” if the trade loses, this is the only way to survive a losing trade. If you risk too much on each trade, you risk making the same trading mistake again; because you will feel frustrated and angry about losing too much money, you will feel the urge to get back into the market and try to get that money back. This is a vicious cycle that will continue until you figure out how much dollar you can comfortably risk on each trade.
Change your attitude towards trading.
Once I began to change my definition and idea of ”success in trading”, it became much easier to achieve it. Most beginner traders believe that trading will change their lives very quickly. Unfortunately, this is simply not realistic, especially if you don’t have much money to trade, and it also keeps you on a hamster wheel of trading mistakes.
You must take a slow and long-term approach to trading and what you consider to be “successful trading”. Let me ask you this: if you had only one or two profitable trades per month and, say, one loss (3 trades in total), instead of 30 trades, of which more than half would be losses, and some of your winnings were small, insignificant, the result would you consider “successful”? Probably the first? Well, that’s right, this will be the first trade, because if you made only three trades a month, and not 30, it tells me that you were patient, disciplined and strategic in your trading, and not impulsive and random.
What most traders get stuck on is that if they trade LESS, they only see it as “making less money”, but THIS is the wrong way to look at trading.
You see, as I explained in an article I wrote about high and low frequency trading, YOU DO NOT NEED TO TRADE MUCH to make money. Remember, EARNING MONEY is better than losing money, even if you can’t risk much on every trade because you have a small account. You must trade as if you are already a wealthy successful trader, because that is how you become one.
A wealthy, successful trader who can take a big position in every trade he or she makes will naturally be much more interested in finding one or two very likely and obvious trading signals per month rather than trading every day. Why? Well, since they know that they will make a lot of money from the large position sizes they can trade, they know that one or two good wins a month is all they need to make a lot of money, so they are not interested in trading. a lot, just looking for good deals. Here is how you SHOULD think and what you SHOULD DO in the market, even if you have a small account.
You should do this because trading less often, but more accurately like the pros do, is the only real way to avoid losing money from overtrading, which causes your trading account to go to zero. You have to keep in mind that correct trading is the goal… that is successful trading EVEN IF you are not currently trading large enough amounts to make “a lot” of money. I promise you, if you trade correctly for long enough, you will gradually build up your account, which means that you will gradually increase your position size and eventually you will make “a lot” of money trading and you will not return them. because you have built your trading approach on a solid foundation of good trading habits.
Make a plan and stick to it.
Finally, learning from your trading mistakes is one thing, but you have to actually USE what you’ve learned, and by “using what you’ve learned” I mean a conscious effort to avoid those mistakes in your next trade. . Take what you have learned and put it into your trading plan and read that plan every day. Often the only way to get rid of the “hamster wheel” of trading mistakes is to constantly be aware and control yourself so as not to repeat these mistakes again. Trading is a mentally demanding business, if you don’t have a trading strategy and a trading plan, you are likely to let your emotions get the better of you.
