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Psychology

How to fail as a traderHey Everyone! 👋 Over the last few months, we've looked at a couple of the best ways to improve your trading, including learning to adjust to market conditions, building a proper trading mindset, and more. Today, we thought it would be fun to do the opposite. Instead of trying to help the community build up solid, professional trading practices, let's design a losing trader from the ground up! What attributes/decisions will we have to encourage to get a losing result? Theoretically, the market is just a game of probabilities. How can we guarantee that our trader will lose? As it turns out, there are a couple of easy behaviours we can combine to ensure that a losing outcome is a foregone conclusion. Number 1: They never define risk 🤷🏼‍♂️ In trading, people often say things about "Risk management" , "Defining your risk" or "Defining your out", but it can sometimes be difficult to determine, as a new trader, what the heck people are talking about. Define my risk? How? What are you talking about? What does this actually mean? Put simply, defining your risk is figuring out *where* you are wrong on a trade/investment. 👉 For active traders, it can be as simple as picking a recent low or high and saying "If this price is hit, then I'm exiting the trade. The short-term read I had on this asset is no longer valid. I don't think I know what's going to happen next." 👉 For someone who is more of a position trader, it can be as simple as saying "I don't want to lose more than 10% (or some percent) of my capital at any point when I am in this position. I think that I have selected my entry well enough that a 10% drop (or x%) would mean that, for some reason or another, my thesis is no longer valid." 👉 From a cash management/portfolio management perspective, defining your risk has another dimension: How much of your total capital do you want to potentially lose in a worst-case scenario? Should each trade risk 50% of your capital? 20%? 5%? 1%? How much of your total bankroll will you lose before you stop? In order to ensure that we have a losing trader, it's important that they don't have a plan for position sizing, setting stop losses, or setting account stop losses. This way, they won't have any consistency and will inevitably take a few big losses that knock the out of the game forever. Number 2: They use lots of leverage 🍋 👉 When combined with Number 1, using lots of leverage is a great way to accelerate the process of losing money. Given that a strategy that wins 50% of the time will statistically face a 7-trade losing streak in the next 100 trades, sizing up and using leverage is a great way to ensure that when a rough patch strikes, you lose all your capital. 👉 Letting trades go past how much you expected to lose is a great way to speed this process because, with the addition of leverage, things only need to go against you 50%, 20%, 10%, etc, before you're wiped out. You can't risk to zero. Considering that the most aggressive hedge funds in the world typically don't use an excess of 5-8x leverage, even in FX trading, we will need our losing trader to use at least 10-20x leverage in order to speed up their demise. Number 3: They hop from strategy to strategy 🐰 Bruce lee once said, “I fear not the man who has practised 10,000 kicks once, but I fear the man who has practised one kick 10,000 times.” 👉 In this example, sticking to one strategy, even if suboptimal, is the man who has practised one kick many many times. The trader who strategy hops is the one who has tried almost every kick out there but mastered none. In order to ensure that our trader is a losing trader, we need to ensure that they never develop any mastery and keep switching from strategy to strategy. 👉 We need to constantly dangle a new strategy, indicator, or trading style constantly in front of our traders. Thus, no matter what strategy the trader picks, they will lack the hours necessary to have anything but suboptimal trade execution, poor overall market sense, and a general lack of nuance & understanding. Combined with number 1 and number 2, it's going to be nearly impossible for this trader to be profitable. -- So there you have it; 3 ways to ensure that the trader will fail. Recognize any of them? Our hope in writing this is not to discourage anyone from getting involved in the markets, but rather to continually shine a light on some of the bad habits we can get into when starting out. Avoiding rookie mistakes and bad practices that can stunt a career as a trader & create bad habits! Let us know if you enjoyed it, and we will continue to make more of these posts that go through some trading "best practices" . Have a great week! -Team TradingView ❤️ Do check us out on Instagram , and YouTube for more awesome content! 💘
NSE:ADANIENTEducation
by TradingView
18
Why Traders Fail: Need for a Balanced ApproachWhy do people fail at trading? It is true that the success rate in trading is very less. You will find only a couple of good traders in a city. In my opinion it is due to the imbalance between two extreme emotions or personalities. One cannot understand or succeed unless a balance is created between them. All that is needed to create the balance throughout this adventure is your Time and meaningful effort. Here are some of those extremities that need to be recognized and balanced. 🚀 Lack of awareness Vs Hyperawareness There are people who enter in trading without knowing this business. They would throw their hard-earned money in the market just because someone else is making money here. These people have very short trading career as they lose all their money in a couple of trades. At least knowing about trading will make them shy away from high risk scenarios and hence help in surviving for long. On the other hand, there are people who have acquainted themselves to the markets to such a level that they want to know everything. They would like to learn each and every indicator and apply it on their charts, until they are left with a chaotic system which is bound to fail. Market is an ocean. You can’t know everything but can try to master a few things. 🚀 Fear of Loss Vs Greed Let me say that most of the people entering this business belong somewhere in the middle class. They always have dearth of money. So, they trade with less money and are afraid of losing it. They would either book very small profits or exit too early from good trades. But unfortunately, they won’t show this haste in losing trades. So, they book 1 point and lose 2. On the other hand, there are risk takers who have money but they are greedy. They would often book heavy losses or do not book healthy profits on time. They would only fume when their profitable trades turn into losses. Having less or more is not the question but discipline of booking profits and losses is the answer. 🚀 Stubbornness Vs Springy People would hold on to a trade or system infinitely. They would not believe in cutting small losses or mend their system for improvements. On the contrary, there are those who would keep on hopping on to one system or the other like a spring . They would book small profit/loss in one stock and buy another with higher risk. Improvement and patience are the key to success in trading. 🚀 Dependent Vs Egoist Each one of us would have bought stocks on the basis of tips from our broker, business channels or friends. Some of us would have moved on knowing the reality of tipsters while the others would still be clinging on to them. The latter would never learn a lesson before losing their entire capital. On the contrary, an egoist would only be overconfident in what he is doing. Having your ears closed in trading is a great thing but lack of flexibility is another. If the whole world says that the ship is going to sink, you can not just sit on its deck waiting for a miracle. Be an independent but flexible thinker. Thanks for reading.
NSE:NIFTYEducation
by Bravetotrade
29
Trading is a waste of time Trading is a waste of time - until you do this! Welcome back for another exciting video, an educational video, and an eye-opening video for a lot of traders, and I have given it a very, very interesting title that is Trading a Waste of Time. Let's find out in this short video. Recently reading a book called The Best Loser Wins. It's written by Tom Hoggard , he goes by the name of Trader Tom on YouTube .And I urge you to check him out. There are some things that I have learned from his book and I'd like to share it with you. The particular data is of 2019 and these brokers are all located in European Union and, by law they are required to post the failure rates , how many clients are losing money in their market in their accounts. Out of a hundred clients, 89 clients were in a loss. And the situation is same for almost each and every broking houses. So eventually the brokers are making money, but the clients are not. Whenever as a beginner or even a seasoned trader, we are looking at these data and we believe that we are not in this statistical data. We are in the winning percentage in the remaining 10%, but it's not like that for the markets. We are just a statistic. Right? And even if you look at the top 10 broking forms in the world, the majority of people are in a loss. So that really makes us ask this question. Is trading really a waste of time? Are we just wasting our time in trading? And a lot of people, it's a very fine detail and a lot of people might agree with me that, in the initial stages it's really hard to be consistent in making money, right? And I'll discuss the reason with you because this particular reason is not discussed. The social media of Twitter, YouTube, it has all created an image where if you're not doubling your money every month, then you are a loser in the market. But in fact, trading is a very tough profession and it's really hard to make money and initial days protecting your money is one of the biggest tasks in surviving in the market. Protecting yourself from ruin is one of the biggest achievements in trading. So whenever we are starting our journey as a trader, where is our focus? What are the questions we are looking for? What are the things we are usually focused on? , we are on the internet looking for strategies, how to do scalping, how to do seing trading, how to use the indicators, the MACD and RSI, and how we can use different types of breakout indicators, right? These are the focal points of. I remember when I started trading, these are the things I was looking for. A hundred percent strategy, no loss strategy. These are the things that I was looking for initially, but these are usually the wrong answers. You know, in an area where 90% people are in a loss, then you need to ask yourself that. Because it has never been easier to trade because you go back 10 to 15 years, it was not easy to trade. You had to call your broker. And now we have an online trading system where we can just buy and sell stocks at an instant, right? That leads to high liquidity. And high liquidity usually means you can enter and. Very fast and you don't have to pay much for it. And you have all the tools available, especially a tool like Trading View, where you get each and every trading charts, indicators without paying a single penny. So it has never ever been easier to trade. So why are we all still losing money? We are only creating brokerage for our broking firm. This takes us to another and final topic is that in the year 2019, one Forex brokerage firm did an analysis of over 25,000 traders. And over a span of 15 months or 16 months. So that is a long period of time and over five crore trades were analyzed. So it was a very big data to analyze and that would give us a clear picture. So in that analysis it was recorded that out of hundred. , the traders were profitable in 60 of them and they lost money in 40 of them. So this is a very good data, right? Your win, your hit ratio is very high in the total amount of trades. So eventually the data is in your favor, but there's a small catch . When the traders are winning, they're winning 40 points. And when they lose, they lose around 75 points. This is a recipe for disaster. This particular thing created a lot of problems for me in the initial trades during my initial career. And this might be creating a lot of problems for people who are trading for the past one or two years in this high VIX environment because, you know, on paper, on week to week basis, you are winning And, and suddenly there's one particular day when you lose it all and that is the day when it drags your capital back to square one. So this is the biggest reason why it's very difficult for people to manage their trades. Cause it all comes down to how much you win when you win, and how much you lose when you lose. This brings us to the concept of risk . right in this modern area, uh, where option selling and creating spreads and selling naked options has been a very famous thing to do for the past couple of years. That is what happens whenever you're selling options, you have a probability of one 68%. That is a one standard deviation, right? So out of hundred trades you are going to win in 68% of them. But what you do and how you come out of the remaining 30 trades when the situation is not going to go in your favor, that is all going to matter. And that is the crux of thing that makes your journey as a successful trader. Our position in the market is very, very small for the market to know that we even exist or not. If you look at the data, if you just reverse the win and the loss points, even if you're winning only 50% of the times, then also your position is going to be in a net profit. So that's it for the guys. That makes this particular question really interesting. Is trading a waste of time? You're wasting of time, or are you smart enough to realize this thing that the other traders are doing and are in a loss? And what are you doing to improve this position and to improve your survival In this market. So that's it for you guys. I hope I have provided some value in this video, and if you found the video helpful, don't forget to follow me @piyushrawtani Trading View. And if you have any queries, feel free to post it in the comments section. Thank you very much and good night.
NSE:BANKNIFTYEducation
by piyushrawtani
13
Experience vs Time Curve of a Traders life My agenda for this video: I wanted to portray how Experience and Profits are not directly proportional to each other, but the process gives us strength to create an edge in the stock market, not become a gambler and follow something of our creation. This creation leads us to profitability as well as experience. A trader Experiences many things in life; I have demonstrated my journey in simple terms here. It's a motivational video / a road map for those blinded by call providers and tip sellers. One you should never rely on, the only person you can rely on in the stock market is not even yourself but your setup. This video contains differences between experience time and Profit Loss curves. I have converted the IDBI bank chart (it looked suitable as per the uptrend I wanted to portray in terms of experience vs. time curve ) Directions: Upside movement for this stock in this video does not mean you are profitable; it means you are gaining experience; in the start of the video, I have explained how one confuses lady luck profits with increasing experiences Purpose of this video: the sole purpose is to motivate my fellow traders to rise and learn to use the trading view community and tools and move above the infraction point in their trading life. I hope you will enjoy this video. Comment your Thoughts on improvement
NSE:IDBILong
by Averoy_Apoorv_Analysis
5
Long on "Larsen & Toubro Infotech Ltd."Logic behind the Trade 1. This scrip has bottomed out after staying there for a long time and in recent trading days it has started an upward movement 2. Recent bullish momentum was seen and after a small retracement & it was followed by a bullish engulfing candle which shows a further bullish momentum continuation 3. RSI above 50 now thus showing strength buildup 4. Gap between 200 EMA and 50 EMA has started to narrow down and also candles are closed above both EMA's
LLong
by Finntastic
Indus IND bankLogics behind the analysis 1. Bank Nifty is in strong bullish momentum 2. This scrip has shown strong bullish run in recent times thus it's a momentum based trade (just like in traders language "Trend is your friend") 3. Post strong bullish run it's in a rest mode now (profit booking) and therefore it's ranging/consolodating 4. Bigger the consolidation breakout with a bullish engulfing candle higher the chances of further bullish run Now, for conservative traders - they can book their profit at Tgt level 1 and those who wish to continue further long can keep trailing stop loss at the entry point SL level - below bullish engulfing candle (just below the wick) Impt remark - Dont risk more than 2-3% of your fund in a single trade and don't let emotions takeover your logical mindset, remember "cut the losses short" Thank you Finntastic Trades
NSE:INDUSINDBKLong
by Finntastic
Nifty and B-Nifty both are at Major psychology resistance Healthy Correction must come at this level. Nifty and B-Nifty both are at Major psychology resistance 18000 and 39770-40000. On Friday both make bearish engulfing candle with heavy selling from over bought zone. we are expected still more correction up to 17300 and 38220. Next up move will come when both index close above these psychology levels till stay short. If market rise again and give chance to short near 17800-870 and 39200-450 must short or buy position in Put for 2-7 days
NSE:BANKNIFTYShort
by tradetechnicalanalyst
Trading: Ideal Patterns and Behavior✅Almost all traders read books and tutorial over the internet regarding technical analysis and patterns. After reading a lot of literature, traders start believing that some patterns ought to work 100% of the times. But according to my personal experience, this is just a mistaken belief. ✅The chart patterns are based upon human psychology, which the pioneers of technical analysis claim that never changes. But in my humble opinion, different human beings have different psychology in life as well as in trading. Not only that, the trading behavior of one particular trader might be different at different occasions. ✅But does that means we should not rely upon technical analysis at all? ✅In order to settle this dilemma, I must say that 'adaptation' is the best strategy one can add in his/her quiver. Seeking ideal behavior is perfectly fine but when things deviate from theory, we must adapt to the psychological behavior of the traders/investors. ✅Yes, this puts into practice a widely accepted truth that trading is more than 70% psychology. ✅As as example, the stock above never retested the resistance zone, which was an ideal behavior to test buyers at a level which once was a resistance. But it never happened and the stock gave a very strong move after the breakout. ✅A stubborn pullback trader would miss a nice 25% leg in this case. But if he adapts to the buyers' psychology, who were so eager to buy this stock, he would look for opportunities on smaller timeframes with minimum risk and huge potential for momentum. Determination is a wonderful disposition but obstinate determination may hurt, both in trading or in life too. I hope it was useful. Thanks for reading. Keep liking for more educational stuff in coming days. JJSingh (@Bravetotrade)
NSE:CUBEducation
by Bravetotrade
13
Trading Decision Flowchart - Checklist Before placing tradeTrading Decision - Checklist Before placing trade Traders always encounter a thought when analyzing their trade history - I would have been in this much profit if I had avoided this particularly trade/trades(mostly losing trades). There are many reasons behind why traders take up some trades which they should not be taking - reason could be fear of missing out, recovering losses, revenge trading or simply boredom trade. One of the essential thing needed to become a good successful trader is to avoid certain trades where - You don't have conviction - You are Over-trading/Revenge trading - You have already lost your day's worth of losing limit you have set for yourself - You don't have proper setup - You don't have a Good Risk Reward Ratio - Target does not look easy - Trade does not fit on your trading rules - and so on. Traders should try to avoid these trades- one such tool which will be useful will be a trading checklist - which should be checked before placing any trade. This idea is to share one such checklist that I use for trading NIFTY/BANKNIFTY options.I hope this is useful to some folks out here. Cheers, Santosh
NSE:NIFTYEducation
by Santosh_A_Chavan
3
How Resistance Turns into A Support?Hi You must have often heard that a resistance once taken out could act as a potential support level. Let us see through this chart how this happens. Firstly there is a strong resistance zone on the left bottom of the chart, which is also 2019 high. Price took a knee jerk reaction from that level. Many traders would have bought near the highs in a bull market but now they are sitting in a loss. They would be thinking that as soon as the price comes back to their average price or cost, they would exit/sell. 1. Finally after the sharp bear phase, price rallies back to the 2019 highs. Now the above traders/investors would start selling at cost. Many new traders who think that price is at resistance would also start shorting (selling). Those who bought at lower prices would also try to book profits. So there is a flux of sell orders at that level. But wait! is that true? 2. Selling is there but buy orders are just overwhelming. Buyers are absorbing all the supply and managed to hold the reaction of selling. Or you can say that seller were not strong enough or buyers were stronger. If sellers are not strong and buyers are strong then what would happen? Tell me..... Yes you are right, the price would rally higher. And it did. 3. Now all those seller who acted at stage 1 would be shocked and want to book their loss at a better lower price. There are others who still think that this stock is weak and the BO is fake, so they start shorting. Price pulls back to the 2019 highs. 4. Now stage 1 sellers have a better opportunity to cover their loss, so they start buying. Left out buyers also start buying due to better bargain. Pullback buyers enter the market. This large flux of buying orders pushes the price higher and the rally resumes. 5. In this way, the prior resistance turns out to be a support for the stock. This same psychology repeats at 6&7 where price holds previous resistance as a support. Imho, Its always beneficial to see any market or chart from psychological point of view rather than merely patterns and signals. The same market psychology is true for how a support once broken, turns into a resistance. Thanks for reading. I hope it would be useful. Regards
NSE:TCSEducation
by Bravetotrade
6
Why It Is Hard To Hold A Winning Position. ?Why It is hard to Hold a winning position. ? ---------------------------------------- Suppose You took a trade ,bought 100 quantity at price 100 , with a SL : 80, and Potential target of 120, Now what happens it goes up to 105 (you think your analysis is good let us wait) Then it come back to 100 went further down till 90 (you thinks it is ok we have to give it room) Then it went up above your buying level till 115 (now your target is 120 you are just 5 points away, what will come into your mind?) Then suddenly sharp selling starts and you got your SL triggered. More or less the PnL whipsaw, take you to the moon and within seconds, it drop you down. The PnL whipsaw creates dynamic changing emotions into your mind. Am I correct or not till now, feel free to comment. ? --------------------------------------------- Let us more about some pre-set emotions which comes out and affect our decision making with open position. 1) Fear of Losing the open position’s profit : See everybody want to win nobody want to see himself of herself as a Loser in the mirror , when you take a trade you always think that it is going to give you profit (subconsciously), with such a biased mind the open position PnL affect your decision making. You get so much attached with the running profit that you start thinking like that it the profit you have already booked and feeling that it is your released profit, now you are “not willing to let it go” because you now attached to it emotionally (psychologically). This type of fear arises from our belief system and past experience developed over previous trades. The social culture, family atmosphere also can be the reasons. “If You think you are a risk taker than you must thanks God , because everybody do not have such brave heart.” Advice: “Let it go”, the open position’s PnL, is not yours, it is the released one that counts. Believe in your system and let the target hit or trailing SL get triggered (SL according to your strategy). 2) Past Experience (Fear intensifies when have a very bad experience earlier) Students approaching me for learning trading psychology ask me why you ask us about our past experience and track sheet, they do not want to recall, but their past experience and the track record tells their complete story , it tells everything what is the problem with their trading , what need to correct immediately what are the strong weak part of their psychology. But why: Because past experience shapes our psychology. If you have witnessed a series of trade where your target is missed by few ticks and you have to book SL. Then you start thinking about your exit style, you think is there any improvement needed. At this point of time you again shift from this strategy to that strategy. If you are trading from a while then you can understand the gains we make are not smooth sometimes great sometimes they are worse. If you think there is a holy grail strategy you will spent whole life searching it, but still remain empty hand. Advice: You have to realise that having continuous losses in a row can happen frequently as, you cannot avoid losing streak, even the professional traders have their losing streaks going for 2 , 3 weeks. You came here not to trade 1 week , 1 month or 1 year , you must have a long term view. 3) Lack Of Clarity : If you are among those traders who always have a very sceptic view about trading, have knowledge and experience but , do not see it as a sustainable business, thinking that you cannot rely on trading income. You will develop a tendency to book early. Because holding a winning position requires a courage which comes from clarity. I met a research analyst managing his client’s portfolio giving trading and investing recommendations to his clients on regular basis for more than 5 years. I asked him why you selling your valuable advice when you can profit from it. You know what he said to me, it is shocking for me he said , Nobody make money in trading. He do not believe in trading business even though having his bread and butter by selling his advice. It is worst how you can sell your recommendations when you personally feel that nobody can make money. Is it not contradictory? Advice: If you do not have clarity about your trading system, you cannot trade confidently and this one thing alone can derail you from your trading plan. So spent time reading, listening to various successful trader, know their story their style, the more you read listen the more you will get the knowledge and clarity. 4) Complacent with the Current profit : I think this is the worst problem happening with you because if you are very complacent you will end up booking very small and losing big ultimately your equity curve will go down slowly. This happen to novice traders who want to make some extra income, they see that open position profit is enough for their one day or two day expenses they close their positions immediately. Note: Have you seen people doing a mediocre job or their father’s small business even they have the potential for a bigger goals. Booking small profit frequently makes us convinced that what we are doing is great because we see a streak of winning trades. Reason: Simple reason of it is than, we tend to apply our day to day life logics here, we are unable to see the potential and avoid systematic approach. Advice: Your strategy is developed according to the profit potential, risk management not for your day today expenses or complacency level. Stay goal oriented make small, short duration goals and see a series of trade at a time not stuck your mind in single trade. 5) Lack of acceptance: When you do not accept loss you will always try to avoid it this is the main reason why people sit tight will their losing position but cannot hold their wining positions. Reason : Arrogance, Confusion, less belief. Advice : You can make profit or loss on a particular trade depends on market situations. Recall this before creating every new position. Just follow you system.
NSE:BANKNIFTYEducation
by TRADEWITHFUN247
26
Which type you belong.?The best way to find the type of trader you are is to see the capital curve,(or equity curve) over time into your trading account. Over time it may increase or decrease depending upon your performance but the way it is increasing and decreasing will give you an idea of where you are going, towards a professional trading or still in the 95% of crowd, who overall lose money. ------------------------------------------------ Type - 1 Big Loss Small Profit You will not believe me I observed ledgers of many traders where I found that this category has the majority. Some lose there entire capital in just 20 to 30 trades their losing trades are so capital disruptive that they soon get out of the game. The reason are many but one common reason I found in such traders that , they do not accept that they are on a path of failure. They always get crazy about their accuracy ,(as if you book small profit and big loss than your accuracy will be excellent) . One more problem is their search for a HOLY GRAIL. My advice: May be this game is not for you. Try something else than trading, (Bitter advice but what can I do the reality is that this game is very hard) ----------------------------------------------- Type - 2 Big Loss Big Profit Now this category is of those traders who enjoys this game, their main reward is not monetary reward the innate thrill of this game, gives them so much pleasure that they can resist themselves. Reasons why they tend to behave like that are many but I think, they play the main role for prices to rally fast they make market uncertain and high volatile. Ultimately they lose money but they are not concerned. My advice: May be you , do not need any advice , You need Introspection ----------------------------------------------- Type – 3 Small Loss Small Profit This type is of that trader who had a bad experience in the market and now they want to improve their trading they read books follow gurus . They always are in a search for holy grail . Though they ultimately lose money but I like this type of trader because they at least accept loses. They at least cut down the main hurdle. They survive long. Advice: You accept small losses but why exiting early manage your emotions follow plane believe in plane, that’s it. Just allow trade to run in profit. ---------------------------------------------- Type – 4 Small Loss Big Profit This type of traders are the pro ones their entry is difficult but exit is marvelous , rest of the traders shuffle a lot while exiting from a trade but this trader they are genius in it. They make plane, execute them, flexible with plane, accept mistakes … etc Advice: Sometime you may feel boring as the trader life is not a social life , after seeing all whipsaws in your trading journey you may feel tired but always remember there is yet many milestone to achieve, this is just a beginning. ---------------------------------------- The trading is a negative sum game , here one's profit is a loss of other. This is like battle where traders fight with their conflicting opinions at the same time simultaneously. So keep your fighting spirit up .
NSE:NIFTYEducation
by TRADEWITHFUN247
59
Type: 2 Fear - Fear of Losing (Most Common)Type :2 Fear of losing If you’re going to be a trader, you’re going to lose money at some point, and in case you are still in the phase of trying to avoid all losing trades and searching for a “Holy-grail” trading system with a 75% strike rate, you should forget about all that right now. As cliche as it may sound, losing really is part of winning as a trader; the two are inseparable. If you don’t learn how to lose properly you will never make consistent money as a trader. Reality check… ------------------------- ALL pro traders lose money, and they understand that it’s just part of the “game”. Sadly, for many traders, every trade is accompanied by a tremendous FEAR of losing money and sometimes intense emotional attachment. Some of the key reasons why traders become fearful about losing their money include the following: 1. They don’t understand that mathematically, over a series of trades, a trader can lose a majority of their trades and still be widely profitable, simple math proves this. 2. They are simply fearful of losing money in general. 3. They are trading positions that are too big (risking more than they really should be), causing fear, sleepless nights and huge emotional swings. This is some pretty powerful stuff so make sure you actually read the whole article and re-read it if you have to. What you learn here should give you the power to eliminate your fear of losing money in the markets and will help you develop into a confident and emotionally collected trader. Fear of losing money can be a good, natural emotion, but we need to transform its focus. Fear of losing money is a good emotion to have in many areas of life, if we did not have it there would be evens more chaos in the world and in the markets. Humans are protective of their acquired wealth and property, and rightly so; they worked hard for it. However, in trading, this natural energy to be defensive and emotional with money needs to be transformed and refocused into a different mental state… Instead of being fearful of losing your money when trading, embrace the control you have on each trade; a trader has complete control over the risk management of every trade via stop losses and position sizing, . These risk management tools are your way of being in control of your money/funds, and instead of being “fearful” about losing money, you should feel empowered and confident because you can predetermine how much you are comfortable with potentially losing BEFORE you enter a trade by using these tools. However, just using these tools to control your risk per trade is not quite enough to totally remove the fear of losing. ------------------------- Ask yourself some serious questions If you feel fear or any emotion at all when you place a trade, you need to “slap” yourself in the face and ask yourself 3 big questions (and answer honestly): 1. Do I really have the knowledge and confidence to be trading with real money in the first place? If you’re trading your hard-earned money in the markets but you don’t know what your trading edge is and you don’t have 100% confidence in your ability to analyse and trade the markets…you probably should not be trading. One of the biggest reasons traders become afraid to lose their money is because they aren’t confident in their own ability to trade! It seems silly I know, but it’s very true; many traders simply don’t have a trading strategy mastered, they don’t have a trading plan, trading journal, etc…they simply aren’t prepared to risk real money in the markets yet…thus they feel fear when they trade. 2. Am I trading a position size that’s too large for my personal risk profile / per-trade risk tolerance? If you don’t know what your per-trade risk tolerance is, then you need to figure that out first. It’s basically just the dollar amount that you feel like you are 100% comfortable with potentially losing on any trade; because you CAN lose on any trade…remember that. You have to take into account your overall financial situation and then determine how much money you should realistically and honestly have at risk in the market on any one trade…be honest with yourself here. You’ve got to think of yourself as a risk manager and as someone who is managing funds, rather than just a small-time guy trying to get lucky; your trading mindset will directly influence your trading results. 3. Do I truly understand the maths behind trading? ------------------------- When I say the “maths behind trading” I am mainly referring to risk reward and how it relates to your overall winning percentage. For example, on a series of 20 trades, you are likely to lose at least 35 to 45% of the trades, and most traders who are successful lose anywhere from 40 to 50% of the time, some even up to 60% of the time. But, through the power of risk reward you can lose more than you win and still come out very profitable. We will expand on this below. Embrace the belief that losing is OK Losing is good if you’re cutting your losses quickly and understand that by doing so you’re simply preserving capital and that your winning trades will pay for your losing trades with profit left over. This is the power of your average risk reward ratio over a series of trades coming into play; we will see this in action below… Even very profitable traders typically lose more than they win, to prove this point let’s take a look at a case study showing 14 trades with a just a 43% win rate. To be clear, that means you are losing 57% of the time and winning just 43% of the time. It can be hard to associate “losing” the majority of your trades with making money, but as I discussed in one of my recent articles, you don’t have to be right to make money trading. You can make money with poor accuracy and decent reward to risk ratio.
NSE:NIFTYEducation
by TRADEWITHFUN247
5
Trading Performance PsychologyThe greater the difficulty, the more glory in surmounting it. Skillful pilots gain their reputation from storms and tempests. - Epictetus. Hey everyone! 👋 This week, we thought it would be interesting to dive into a less-commonly discussed topic: performance psychology - and discuss how it relates to Trading. Specifically, we're going to look at the following question: What actually drives outperformance from one trader to the next? From a process standpoint, there are lots of things that aspiring traders can take from other performance disciplines (like sports) in order to better understand the necessary steps to get where they would like to be. Let's jump in! Time is the common element to expertise ⏰ Mastery is built over time. First through exploration, then knowledge building, then well-structured practice. To invest the great amounts of time and effort required for mastery, an individual typically bonds emotionally with the field, creating a long-term relationship. Present in almost all extremely high performing traders is an inherent, intrinsic love of trading itself. This means a love for analyzing charts, working on strategies, looking at markets, and trying to fit the pieces together in one's head. In this frame - Trading isn't a job, it's a CRAFT. If you just love the status, the lifestyle, or the income, then it's likely that you won't reach the true heights of the profession. The highest performing traders spend hours and hours working on their trading; not because they WANT to, but because they LOVE to. Finding a niche ❤️ The greats do not become great by working hard; they work hard because they find a great niche: a field that captures their talents, interests, and imagination. The best pitcher in the world might make a terrible hitter. If you're early on in your journey (or lost), something to consider is trying to find a niche that you truly resonate with. A great deal of importance is placed on niches in other professions and institutionally within finance, as hospitals and banks have rotational programs to expose newcomers to different types of experiences. Why then, don't individual traders do this? A great way to center your thinking is by constructing a rotational program for yourself. Here's a list of the most popular asset classes & trading styles. Give each a google , or look for ideas here on TradingView, and see what you resonate with most strongly. Set yourself up for long term mastery by actually finding something you love doing day in and day out. Liquid Asset Classes: -Stocks -Currencies -Cryptocurrencies -Futures -Fixed Income -Volatility Styles (Timeframe): -Intraday - holding time is seconds to hours -Swing - holding time is days to weeks -Position - holding time is weeks to months Which holding style fits with your temperament? What topics do you like learning about? The Learning Process ✅ In trading and in life, we often hear that "Practice makes perfect". A better saying may be "Perfect practice makes perfect". How practice time is structured makes the difference between a performer who has five years of experience and someone who has one year of experience repeated five times over. So; how should you structure your practice? In performance psychology, there's a concept known as a "learning loop". It has three parts. Performance -> Feedback -> Learning (repeated). This is crucial because feedback is the key to improvement. Trading is a solo sport, which means that figuring out how to incorporate a feedback process that allows for reflection is absolutely critical. P/L is feedback, but there can be some problems with it singularly as your feedback mechanism. Even the best traders who execute the best looking trades can be on the opposite side of variance on given days. The process is king. Get feedback from your performance that doesn't have to do with P/L so you can track the inputs to your decision making. Some traders take copious notes, some record their screens, and some record data points that aren't P/L related (hours slept, hydration, mood, etc). (We have a "notes" feature built into the charts you can use for this purpose.) If you gather up all of these items together to create a long-term blueprint for building mastery, it should look something like this: 1.) Find out what you truly love about trading 2.) Explore it more deeply 3.) Stick with it through time and allow your intrinsic enjoyment to motivate you through the ups and downs 4.) Structure your performance through that time in such a way that you can generate feedback for yourself 5.) Incorporate that feedback to continually improve your process. Allow learning loops to be your engine of long-term performance. Hope you enjoyed reading, and stay safe out there! - Team TradingView
NSE:NIFTYEducation
by TradingView
7
Circadian Rhythm For TradingHello traders 👋 how are you? As we know it is not just chart analysis or strategies that bring success in trading but there are other physical-psychological 🦾 factors also that silently act in the background and can enhance trading efficiency. In this post I have tried to throw some light on the daily schedules ⏰ that can help traders to improve their trading performance ✈ ✅ After-Market Slow Down 😌 >>Traders burn their veins watching every single candle and every tick on the chart. This leads to eye strain as well as brain fatigue. >>A two-hour rest after the market close is essential to rejuvenate yourself for family keeping. ✅ Evening Preparation 👀 >>Its difficult to search and plan your trades during live market. Therefore you need an hour or so to look into your charts, before supper. >>You may take help of screeners or shuffle through every chart on your watchlist to plan your trades. ✅ Deep Slumber 😴 >>Sleeping improves memory, boosts immune system, strengthens heart and increase productivity. >>For having a sound sleep of 7 hours or so, stay away for your mobile and laptop screens after 9 O'clock. Spend quality time with your family and kids. ✅ Overnight Adaptations 🙃 >>Wake up early and move out in the fresh air if possible. >>Do some jogging, stretching, exercising. >>After morning activities, watch out for any change in sentiment that happened overnight due to western markets and see if you need to modify your plans. ✅ Meditation 👼 >>Now that everything is almost done and there are still 15minutes or so in the market open, just sit in a relaxed physical state and concentrate on your breathing. >>Meditating this way for a few minutes may help for more effective execution of your plans. ✅ Plan Execution 🤺 >>The market opens and its now time to put your plan into practice. >>If your analysis was correct, there should not be any hesitation in executing your trades. >>Always mind trade management and risk management. Thanks for reading. Hope this was helpful!! Do like and comment for more such posts in the coming days 🙂 Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
9
Learning Stages in TradingIn my opinion learning in any field is connected to the "Four stages of Competence" and trading is no different. This post also answers why most traders lose in the stock market. Following are the four stages which every trader has to pass before attaining success. Unconscious Incompetence ---------------------------------- This stage belongs to the newbie traders who ignore all the knowledge part. They don't think that they need any kind of knowledge to make money. Their greatest desire is to make money in shortest possible duration so they rely on tips/news for trading. Ultimately they lose and i think more than 50% traders quit at this stage only. Conscious Incompetence -------------------------------- At this stage the trader realizes that ignorance is not a bliss. He has already lost in the markets so he thinks that may be he lacks knowledge. He starts reading books; attends online webinars; and attend courses/classes. Although he is gaining knowledge yet he confused with tons of indicators and strategies etc. He still loses because due to these confusions their is no solidarity in his plans. He has got a poor risk appetite. His ego of being right and urge to win every trade widens his losses. I think less than 30% traders survive up to this stage. Conscious Competence ------------------------------ Finally after so many losses the confusion leads to simplicity. The reader gets more systematic with setups and all, but still struggling with psychological issues like fear, greed, lack of discipline, insufficient capital etc. At this stage, I suppose 85% traders would lose their entire capital and give up scolding themselves for choosing a wrong career. Left with less than 15% traders. Unconscious Competence --------------------------------- A very few who reach at this stage and still left with funds make money from money. Trading selective setups becomes an involuntary action for them. They have realized the hardest truths of trading so psychological hurdles disappear from them. They belong to that <10% successful traders. Which stage do you belong? Do write in the comment section. Keep liking for more interesting stuff in the coming days.
NSE:NIFTYEducation
by Bravetotrade
57
Type: 3 Fear - Fear of Leaving on the table (After taking trade)Believe me there is no such table here .... Jokes apart have you ever thought why we are not what we might be , what is that problem which is creating a difference between our potential and our reality. I think that is our belief system every emotion whether it be of fear, greed, jealousy or any other emotion. Let me explore more on the relation of belief with emotions. Let us consider you live in village where you have Maruti Alto 800 and nobody in the entire village have a car or had a car before, you are the first one ok. You feel good about your car or bad , obviously you will proudly ride your car and may feel elated when people ask help or praise your car. Second scenario: Let us consider you now living in a city where you have Maruti Alto 800 and everybody in your colony , people you work with have Maruti Alto 800 will you feel the same way you felt before in the village about your car. Or what if people around you have more valuable assets than your assets , will you feel the same way. So why our feelings changes , because in depth in our belief we strongly think that having luxurious items which other’s can’t afford is good ,is more appreciable , is respectful , admirable , more acceptable by society. We all are crowd seekers you admit it or not we always feel good when we get accepted by crowd. Let me take another example, suppose you in childhood had a very bad experience with dogs they bitten you they ran after you and all terrible experience you had in the past, will you play with dogs if any playable dog approaches you in a garden probably not, you will see everybody enjoying with dogs but you are fearful of it. Can you control your emotion of fear, probably not so is there any way out there? You just now believe that all dogs are dangerous. What happens when we had several experience with trades where we saw big profit but at the end booked loss. What will happen to your mindset when you seeing that your target is getting missed by just 1 pip or 5 paisa whatever the minimum spread, and at the end you got out on SL.? What if you see series of such trade in a month? Now you doubt on your system, your strategy. Am I right at this point? Let me know in comment. You may think that leaving that open profit for that potential target might be not a good decision. You always think that there is something missing, you have to do something to minimize this losses. Is there any way to not book in a winning open position? Is there anything we can do with those trades where open position profitable at some point of time. I tried back testing of around 15 years on more than 200 scrips spent a lot of money on buying past data.(the data earlier have to be bought ,nowadays it is free of cost) . After that rigorous search for that Holy Grail solution of this terrible problem. Plane and simple thing there is NO SOLUTION at all, trade may go into your favour for some time and suddenly it can go straight to take your SL. Prices are random your part is to execute trades on time according to your plan. That’s it ……. As we can overcome our fear of dogs by starting to spend time with small dogs (puppy) same way we can minimise our risk per trade to a level where we have no fear of losing that on a single trade. Every improvement in your belief system will take time, effort and ACCEPTANCE.
NSE:NIFTYEducation
by TRADEWITHFUN247
LIFE OF A NOOB TRADERHello !! Welcome to the trading psychology of a noob trader. We all know most people lose money in stocks as they do not have a proper idea about investing and invest randomly in any stock without looking technically or fundamentally. In order to stay in the market, one needs to be patient and hold the horses when the market dumps as nothing goes down forever. Most of the new traders buy stocks that are overhyped and when it starts dumping they sell them rather than accumulate more of them. In the long term, the market eventually goes up and one needs to know the law of compounding and invest more when the market dumps but the opposite happens and they lose out on their capital. The poorer get poor and the richer get richer as they have mastered the secret of long-term compounding. Invest Early and slowly !!
NSE:RELIANCEEducation
by ScramblerG
Trading -- Five Common Psycho-HurdlesFear of Missing Out ------------------------ You missed a great opportunity yesterday. You take it as a mistake and don’t want to repeat it. So, today you enter in a hurry, deviating from your edge/strategy thinking that you will nail it this time. But that might not be the case. Missing an opportunity, because it was not in-line with your back tested strategy, was perfectly fine. You were still following the right path. But after missing a couple of rallies, you decided not to miss the next one. This leads to disaster. If you are missing too many opportunities and want to deal with it, then think of modifying and back testing your strategy. Revenge Trading --------------------- You take a long trade in the morning and stopped out in the just 15 minutes. You don’t digest this loss and want to recover quickly. So, you not just reverse your position but also double it. In the next candle market again stops you out, multiplying your losses. Your first loss was still ok to bear with. But reversing and doubling was an absolute blunder. If you enter into a position as, per your edge, and got stopped out then consider it as a drawdown that one can face in any strategies. There are no peak without a valley. If you miss a valley, you will surely miss the peak too. Greed Entering your Mind -------------------------------- “If you do not book profits, you will book loss.” You need to define two things while trading: risk involved and potential gain. If you have taken a trade and its not in favor, just do not average to bring down the cost. This oversize your position and eventually multiplies the risk. Also, if you have set targets (price target or profit amount target), just exit (at least partially) there. Taking out profit from the market is of utmost importance as this is the prime objective of this business. Waiting for too long, when in profit, may bring you back to breakeven in a volatile event. But if your strategy says to trail a profitable position, its perfectly fine to do so as you will be locking your profits. Paper loss is Not Real --------------------------- Suppose you entered a trade at 500 and your stop loss is 490. The stock starts turning down and your PnL is in red. The stock is at 492 but your brain says its loss. This impression is so powerful that you could not stop yourself from closing the trade. You placed the SL as per your plan. Any loss that you see before your SL hits is just a paper loss. You SL defines your real loss. Lack of Discipline ---------------------- All the above hurdles result into lack of discipline, which stops you from being profitable. You have to have a strategy/edge in the market with some back testing. Then you need to strictly follow that edge. You may tinker a bit with your edge if it is needed. Discipline is nothing more than religiously following your plan of action. Putting efforts to train your brain against all the above psychological hurdles can make you a disciplined trader over a period of time. There might be more psychological hurdles but I think these are the crucial ones to deal with. Do like and share for such posts in future.
NSE:NIFTYEducation
by Bravetotrade
48