With the recent turmoil of events such as the US Election followed by Donald Trump as the next US President, we thought this article would help traders look to the future with a steadfast resolve when trading.
Psychology of Trading
What role does psychology play in trading?
The typical day for a trader involves making swift decisions and getting in and out trades. Such decisions must not be influenced by emotions. Thorough planning using strategies, sticking to the plan and knowing when to stop with profits and losses is required for success.
Forex trading is not a complex business, but one that needs to be tackled with a lot of wits. Most Forex knowledge bases in the market teach you on how to cope with losses but in my view, it is equally important to be able to cope with profits as well. With winning the mental state of mind becomes that of Hercules and this is where we must say stop.
Emotions must be controlled in all three events of loss, profits and non-trading days. Most traders end up losing their profits within a matter of days and this often results in the negative revenge reactions.
Let’s look at how the typical mindsets of an emotional trader react with winning and losing trades compared to a Platinum Educated Trader.
The Emotional Way
- Egotistic: I am the best trader in the world.I will not follow any rules as I know what is right. Even the dog moves out of the way when I walk.
- Daydreaming: Today, I made 100 Pips and if I carry on like this, I will be a millionaire within a year. I will plan way ahead of time that I can take an early retirement and move to the Bahamas.
- Greedy: I should get some more funds from somewhere and make more profit and risk it as I am a very successful trader. I will buy anything I want as I know my trading income will easily allow me to pay for it all. I am going to convince the whole world that trading is the best thing since a slice of bread.
- In denial: It is not my fault; it is the system.My broker slipped me this trade and I lost. Let me call the broker.
- Depressed: I am very unlucky and it’s just the way it is.
- Desperate: I have some money left. I am going to go all in what does it matter. I have lost most of my money anyway just going to trade this late and then it’s over.
- Hopeful: I am going to give up trading but I need to get some money to beat the market first. I must try this another trading platform that makes 99% gains a year. Over leverage is a normal practice and I will make back all my money today.
Unbeatable, revengeful, frustrated, lost and the list of emotions goes on and on. Traders with all levels of experience from beginner to advanced go through these emotions.
If any of the above emotions resonate with you, a team of Platinum mentors is here to help.
The Platinum Way
At Platinum Trading Academy, we educate our members the Institutional Way. The mindset of an Institutional trader is different: “Plan Your Trades and Trade Your Plan”.
It is important for a trader to be able to read a chart and have access to the right trading platform. Setting trading rules, building a trading plan and sticking to the plan are steps that can help a trader overcome emotions.
The secret weapon of a successful trader is this educated, disciplined and emotionless mindset which is crucial to long-term profitability and consistency.
We arm our clients with:
- Knowledge and understanding of various asset classes.
- The Institutional approach and key trading strategies.
- State of the art Trading Platform.
- Fundamental news events and understanding of how fundamentals affect markets, what makes markets move, important releases and central bank monetary policies.
- Daily and Weekly trading round-ups.
- Key bank trading levels.
- Live Trading Bulletins and Webinars.
- Technical analysis techniques to determine market moves before they happen.
- Guidance and tools to master emotions.
- Money Management & Risk Management techniques.
Beginner level traders must accept the fact that they may make numerous losses. At Platinum Trading Academy, we understand these issues and guide all our members with 1-2-1 support from a Trading Mentor to master and dominate this aspect of trading.
It is also known that individuals who are into trading usually come from very successful lives where they are not accustomed to failure and therefore may not know how to deal with it. A trader who is educated the Platinum Way always knows when it is the right time to exit a position when the losses are mounting or even when the profits are soaring.
Few of the sentences that Platinum mentors use repeatedly are:
- Know your own risk.
- If you made very good profits today, spend quality time with the family and forget about trading more for the day.
- If you suffered loss, take a break, revisit the trading plan and commence work the next day.
- Enjoy the excitement of work tomorrow.
- Be ready to deal with the consequences of pulling the trigger for a trade.
- Be patient and take action at the right time.
Our aim is to help you succeed and achieve your goals, whether your aim is to become a full-time trader, to earn a secondary income, to boost your retirement fund or to achieve full financial freedom.Please get in touch with one our mentors and let us help you become a consistently profitable trader.
“Success is not final, failure is not fatal, it is the courage to continue that counts.” ~Winston Churchill
Have a beautiful day and an even wonderful week!
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The information you’ll find in this article is for educational purpose only. We make no promise or guarantee of income or earnings. You have to do some work, use your best judgement and perform due diligence before using the information in this article. Your success is still up to you. Nothing in this article is intended to be professional, legal, financial and/or accounting advice. Always seek competent advice from professionals in these matters. If you break the city or other local laws, we will not be held liable for any damages you incur.