What is trading psychology in the stock market and what you should keep in mind while trading them?
Find a trading style that suits you
The best way to find out is, to read Market Wizards, by Jack Schwager or there are many other books to go for. You’ll be exposed to different trading styles by successful traders, and learn the essentials of what it takes to be a, consistently profitable trader.
Once you find a trading style that resonates with you, go all out and learn everything you can about it.
How to develop your trading plan
A trading plan is a set of guidelines that define your trading.
The benefits of a trading plan:
- Removes subjectivity in your trading
- Reduce “roller coaster” experiences
- Keeps you focus on your trading goals
- Allows you to identify “problems” to work on
- Prepares you for the “worst” possible scenario
Execute your trading plan to be a consistent trader once you’ve completed your trading plan, it’s time to take it to the markets.
I would suggest starting really small on a live account because you’re going to suck, really bad.
And if that’s the case, why not pay lesser in “tuition fees”, to Mr. Market?
When you execute your trades, 1 of 5 things can happen.
- Break even
- A small win
- A big win
- A small loss
- A big loss
If you eliminate #5, you are much closer to being a profitable trader.