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Trading Psychology

Educational 21: Importance of Closing Price In the above chart, I have a drawn a closing price resistance line in blue indicating a highest candle close on the chart, now the price action needs to close above that previous resistance to indicate further upside movement in the stock therefore we need to wait for the daily price closing in order to determine and confirm the further movement. In this chart, the price action did go above the marked resistance level (in blue horizontal line) but failed to close above it which indicated selling pressure at higher levels and eventually if it failed to close above the resistance zone then it came down sharply. Therefore, a trader must wait for the closing of a candlestick in order to determine and confirm the big players further movement in the market. Lesson: Trade with the confirmation of closing price or candlesticks. Regards
BSE:RELCAPITALEducation
by NeeteshJain
4
What makes a trader Special?What makes a trader special? Is it money? fame? Discipline? When a person is successful in trading he will get money and fame. To be successful discipline is needed. And how to develop discipline? When a person is confused and stressed, he cant trade well. A calm mind brings stable mindset.And stable mindset brings discipline. A trader's mind will be calm when he has a good trading strategy and trading plan. There is no 100% successful strategy. Every strategy has its own time and drawbacks. Instead of searching for a 100% sure strategy, trust the strategy you already have, fine tune it and use. A calm mindset makes the trader "Special".
NSE:NIFTYEducation
by vanathi
28
Trader's Queries - Trading Psychology Part 11Query : "Will this stock go up? I have bought it at this price." Most of the days I get this question in different form. Answer : Not only newbie's, but also traders face this uncertainty. After buying or selling the stock they get anxious whether the price will move as per their expectation. Unless we learn to deal with uncertainty, we cant develop trading discipline which is very important for a successful trader. 1. Plan your trade and have it in written form. 2. The written plan should have proper entry, exit and stoploss. 3. When you feel uncertain, check your trading plan. See what it says. 4. You can not control price, but you can control your uncertainty feeling. Be aware of it. 5. Say to yourself, "I have a solid plan. If price moves against my plan I have stoploss to save me". 6. Dont run away from uncertainty, face it with certain trading strategy and plan.
NSE:CNXAUTOEducation
by vanathi
6
Trader's Queries - Trading Psychology Part 10Most people think analysing and planning the trade is important and tough. After getting experience as a trader we realise trading discipline is the most important thing which brings success/money to the trader. Discipline prevents a trader not to act because of greed and fear. It controls random and impulsive trades too. After few good trades, a trader develops the mindset that his methods are correct and gets over confidence. It makes him to trade as per his wish. Failure trades makes a trader to think his methods are wrong and makes him to avoid trading. But in reality no trader can be 100% right or wrong in his analysis. Trading discipline can not be developed in few days. It takes more practise and determination. Analysis and trading plan is of no use if you dont have trading discipline. Make a habit of evaluating your trades based on trading discipline irrespective of profit or loss. There is no game in this world with out rules. Without following the game's rules a player wont be qualified to play the game. Same way if you dont follow your trading rules with discipline, you cant survive in trading for long term.
NSE:NIFTYEducation
by vanathi
5
DECISION FATIGUE & TRADINGHi guys, today I am sharing a valuable concept which helps us trade better with efficiency. I promise your trading results will improve if you follow this. It is the concept of decision fatigue. So, let's see what we can learn from it : To put it simply, decision fatigue is when you get mentally tired from taking decisions. The more number/harder the decisions are, the lesser brain power you will have to take the next one which leads to poor decision making in the later stages. Most notable example being that judges in courts have have been shown to make favourable decisions in the morning. So, how does it matter to us traders ? As you know, the market is so dynamic with constant fluctuation of prices which can be quite demanding on the brain. And as we process so much data and make multiple trades, there are high chances of less than optimal performance after a point of time. Haven't we all regretted trades where later we thought "how and why did I do that ?" Therefore, to tackle this and be in optimal capacity, One should make most of the decisions before the market opens. That includes, which stocks are you going to follow, what strategy you are going to use, what are the possible scenarios, what will you do when this or that happens; basically, be fully prepared and for every contingency, keep a plan. So, when the market opens and you are doing live trading, you don't have to be a juggler and handle so many decisions. Then, you will have to only follow your plan and make much lesser number of decisions leading to better quality. If you want to take it too far, then like Jobs and Zuckerberg, you can pre-decide your clothes, breakfast, etc previous night; so that you can go to extreme levels of optimal performance by using all your brain power in only the most important decisions. I'd leave you with one of my favourite quotes : " The more you sweat in peace, the less you bleed in war. " ' put a thumbs up if you liked it. comment for any feedback ' Thanks.
NSE:NIFTYEducation
by dravya
13
Trader's Queries - Trading Psychology Part 9Query : I learnt trading myself. Initially I got profit. I started to lose money when I increased my position size. What should I do now? Have you seen any one who learnt to drive car themselves? If you want to learn driving from whom you will learn? Not from race car drivers. Right? I interact with people who want to become traders. They all have this mindset 1. Trading is easy 2. I can learn trading by browsing or studying from internet. 3. I can earn jackpot money from trading daily. 4. If I attend some workshop by a famous trader, next day I can trade. Always remember theory is different from real time. In internet you will find articles saying "over bought/over sold" levels are this one and when an indicator reaches this level you can reverse your trade. And after becoming a trader only you will realise price action wont reverse in overbought/oversold conditions. We have to check other conditions to find the reversal. A person who truly wants to become trader wont think he can read the theory from net and become trader at once. World's sharphest minds/brains are trading in share market and to save your money from them you need lot of practise. And after that only you can think about earning money. Trading is a serious game and dont do experiments in it. Being over confident about one's own self wont help in trading. Note : I cant teach trading to everybody who ask me to teach them trading. I expect certain qualities from a person to become a trader. And to them only I will teach. I know human psychology and I can assess a person's mind set easily.
NSE:NIFTYEducation
by vanathi
23
Trader's Queries - Trading Psychology Part 8How many of us go to the movie for the first show on the release day itself? How many of us buy a new brand mobile when it comes to the market at once? When we develop a character based on impulsive actions, it creates a lot of reactions. On the other hand rich people wont jump in to the market when the price moves. They enter at the price which suits their trading plan. Rich people wont buy a thing without knowing its advantage/disadvantage. For example let us say Trader Mr. ImpulsiveAct has 10 stocks in his portfolio. He have trading plan for 6 stocks. One of the stock which he dont have trading plan start to move fast. He enters trade. But he dont have a clue about entry, exit or targets. Obviously he exit the trade with loss. On the other hand Mr. Cool enters a trade when price is moving as per his trading plan. Now its very clear why Mr. ImpulsiveAct lost money and why Mr. Cool gained money. When we learn trading we dont know how traders trade based on impulsive thoughts. After entering to trading only we experience about it. Discipline yourself not to trade/act based on impulsive thought.
NSE:NIFTYEducation
by vanathi
20
Trader's Queries - Trading Psychology Part 6Lot of people are coming to trading field with the thought that we can make easy money. Making money is easy once you know how to make money. And to know how to make money is not an easy process. The decisions we take in our life defines our destiny. When a person decides to master the art of trading, next thing he have to do is to take action about how to learn trading. Check whether your actions are working well to master the art of trading. Change your actions till it is working well. Repeat the process till you become the master in trading. During the whole process keeping the momentum is important. As traders we know how much importance the momentum has. Anything we decide depends on our 1. belief 2. subconscious mind 3. influences 4. values 5. emotions 6. habits. Changing any one thing will create a difference. When a person loss money in trading for years, he have to remember "loss is an experience and result of his trading actions, but he is not a faliure". Failure wont happen in over night. It is the consequence of long term actions. To change failure to success make commitment with the decisions you make.It may seem impossible to get success, but if you persist with commitment and discipline, in long term you will be successful. Dont expect others to help you, its your life, your decisions, your destiny and you have to create it, not others.
NSE:BANKNIFTYEducation
by vanathi
12
Trader's Queries - Trading Pshychology - Part 5Persistence in doing something without stopping the efforts despite the problems or delay in achieving success. How many of us try to become a better trader inspite of the difficulties? Learning about trading, finding the trading set up and training our mind to trade better need perseverance. Determination can move the mountains. I remember a story about the king Robert Bruce. Once there lived a king Robert Bruce who ruled Scotland. During a fight with England he was defeated. The king and his soldiers hid among the mountains. He made many attempts to defeat England but failed. He decided to stop his attempts. One day he saw a spider trying to build a web in the cave. It fell down so many times but it didnt quit. The spider did not stop its efforts till it build the web completely. This incident made king Robert to have new hope. Once again he gathered his soldiers, fight with his enemies and won. One of the important thing a trader should have is determination. The journey of trading is tough. Only determination will make us to travel till we reach the destination. We have to try till we succeed as we only create our own destiny.
NSE:NIFTYEducation
by vanathi
11
Trader's Queries - Trading Psychology Part - 4We keep our home, working environment clean. And we keep ourselves clean. Do we clean our mind? Do we remove the dirts from it? Read the post to understand how it is related to trading as I am not talking about philosophy or health. Every thought comes in our mind forms a pattern. These patterns form as habits. And these habits define us. Similar way every trade create a ripple in our thoughts. For example when a trader get few consecutive successful scalping trades which has the trading duration as few minutes starts to think I can make money if the trading duration is few minutes. This thought creates an insecured feeling when the trade is not getting over in few minutes. It prevents to enter a lengthy trade. I have seen people who scold the scripts when the price action is not moving in their expected direction. This hate, anger and frustration makes us unstable when entering next trade in the same script. During and after a trade we should not feel any emotion towards the script. Check your thoughts during and after trade. If there is no emotional burst, it means you are the master trader(infact a monk). Remove the emotions from your mind after every trade. Clear your mind after every trading day. Review your mind at the weekend. Make the necessary changes and evolve. We have the power to create our destiny, our career and our trades!!!
NSE:NIFTYEducation
by vanathi
18
How thoughts affect out trade?Many people think trading depends on technical analysis. From my experience I can tell it needs planning, executing the plan and thought control. We all have trading plan. Lot of trading strategies are available in net and we can choose one as per our risk tolerance. The real challenge comes when the market opens. Ask/bid rate flashes infront of our eyes and at that moment most people start to think "Can I buy/sell". If they think with clear mind and see the price, then they know it clearly whether it is buy/sell.This confusion comes when there is lack of confidence. Nobody knows whether their trading will go as per their plan or not. We can not control the price action. What we can do is planning entry, targets and stoploss. And we can control our emotions. After entering a trade just check how your mind behaves. Emotions go along with the price and makes the mind to feel miserable or happy. We can overcome this by channelling our thoughts. In the war zone if the soldier start to think whether he can go home alive or not, for sure he cant win the war. If he remembers he have to win the war and concerate on fighting, rather than concentrating on his emotions he can win. Emotions creates blockage in trading. And emotions cant control the price action.
NSE:NIFTYEducation
by vanathi
30
TRADER AND TRADING PSYCHOLOGY1 Decide that you are in markets for long haul. that is you want to be a trader\investor even 20 years from now 2 learn as much as you can. read and listen to experts but keep a degree of healthy skepticism about everything ask questions and do not accept expects at their words 3 Do not get greedy and rush to trade take your time to learn, markets will be there with more good opportunities in the months and years ahead 4 develop a method for analyzing the markets 5 develop a money management plan goal must be long term survival a steady growth of capital and in due course making high profits most traders put the last one first 6 be aware that a trader is the weakest link in trading system 7 winners feel think and act differently than losers you must look within yourself strip away your illusions and change your old ways of being, thinking, and acting. change is hard if we want to be a professional trader\investor we have to work on changing
NSE:BANKBARODAEducation
by bearishbull1968
11
Trader's Queries : How to learn trading?An important query from the traders to me is how to learn trading? Is there any course or books available? Courses I dont know. Books I can refer a few. Technical Analysis Explained by Martin Pring. A Complete guide to volume price analysis by Anna Coulling. Japanese candlestick charting techniques by Steve Nison. After reading these books, when reading the ideas in trading view we can relate what we studied in the book with charts. In any profession, we can achieve what we want when we are passionate about it. And trading needs more passionate efforts. Learning, studying, analysing charts, training your eyes and brain to find patterns, training your mind to be balanced needs consistent efforts. It wont come in a single day. It takes time. When you trade using your hard earned money, you automatically take more efforts to be an efficient trader. I always have this thought in my mind. "I am from the society where people are illeterate about trading and they view it as gambling. If I waste a single second in my life with out learning about trading, it makes them easy to seal me as a gambler". This thought motivates me always. What motivates you?
NSE:CNXITEducation
by vanathi
35
9 Smart Money Habits of Warren Buffett That We Should All Learn 9 Smart Money Habits of Warren Buffett That We Should All Learn From How to be like Buffett How did the investor become the third-richest man on earth? With very a disciplined approach to money. Here's what we can all learn from the Oracle of Omaha. 1. Think like an entrepreneur Buffett filed his first tax return at 13. Even as a child, he was always looking for opportunities to earn, beginning with a paper route and selling soda and gum door-to-door. 2. Live below your means When he's "not feeling prosperous," Buffett chooses a $2.95 McDonald's breakfast instead of a $3.17 one. You don't have to go that far, but spending less than you earn is a really good idea, if you can manage it. 3. Love compounding Buffett tells the story of a man who bankrupts a king by asking for one grain of wheat on the first square of a chessboard, 2 on the second, 4 on the third, and so on. Buffett loves the way compounding makes investments grow exponentially. 4. Learn all you can He spends most of his time reading, learning everything there is to know about the markets and companies he invests in. The more you know, the smarter choices you can make. 5. Look for bargains He built wealth by finding companies that were undervalued by the market. Buying assets for less than they're worth and holding on to them until prices rise is a great way to get rich. But it takes study to spot these gems. 6. Think (very) long term One rarely discussed secret to Buffett's success is that he buys quality stocks and holds them for a l-o-o-o-n-g time. He still hasn't sold the stake in American Express he acquired in the 1960s, for example. 7. Don't buy until you're sure Unlike baseball, in which a strike may be called even if you don't swing, investing is a "zero forced strike" game, Buffett says. So don't get pushed into making an investment before you're really sure it's right. 8. Don't follow the herd If you do what everyone else does, you'll get the same results they do. Buffett tells investors to be "fearful when others are greedy and greedy when others are fearful." In other words, the day after a stock market crash is a smart time to buy. 9. Safety first Buffett's investing Rule No. 1 is "Never lose money." No. 2 is "Never forget rule No. 1." He means: Don't take big risks looking for big rewards. Pick sound investments, and hold them long term. That's what made him a billionaire.
NSE:NIFTYEducation
by AshishChauhan_AlgoTrader
6
Common mistakes done by traders!When some one enters to the trading field, they usually do this mistake. They plan for the trade and enter it as intraday trade. They don't respect the stoploss and think price will move according to their wish. Before the end of trading day they decide to change it to positional or investment. This is a wrong attitude as intraday, positional and investment differs in termes of stoploss, target and brokerage. Trading is like flying in a parachute There are lot of people who trade well You will think why cant I trade well? I have the high IQ, money, everything You can trade well Only if you overcome fear, greed and ego You will think you are going to be a failure But you won't You have to get in to trading To trade well Do you know whether this trade is going to be profit? Ofcourse not. You have to shed tears, go through pain, doubts, hurt But eventually parachute will fly after going through this And your trades will bring profit. Nothing worth comes that easy in life! Plan and excute your trades properly.
NSE:CNXITEducation
by vanathi
14