I have read dozens of trading books. Some helpful and some not so helpful. However, one common theme runs throughout all the books I’ve read on trading: Trading Psychology.
Some trading guru’s say that trading psychology makes up 90% of your trading success whilst your system and rules and money management make up a mere 10%. Whilst this may be a bit drastic, I do believe e https://npfinancials.com.au/that psychology is the area where traders struggle the most. Most beginner traders focus more on buy and sell signals and order execution, while experienced traders will suggest that trading psychology is the area that they should focus on in order to become consistent, profitable traders.
It’s so much harder to look inwards to improve your trading than to focus on external factors. Traders would rather search for that perfect indicator or that Holy Grail system than focus on their own weaknesses and psychological makeup because it’s difficult, really difficult.
As individual traders we have two ways of handling this. Firstly, we can try to overcome our the psychological issues that are holding back our trading or we can automate our trading so that psychology plays no part at all. It’s a choice between overcoming our weaknesses and eliminating them from our trading.
Overcoming psychological issues in trading is a long and hard process that one can improve and control but never eliminate entirely. You could seek the advice of a trading coach or take a course or read books, but ultimately learning to control your emotions and psychological state will be a life long journey of discovery. We are particularly susceptible to psychological weaknesses when we are tired or under stress. Trading under these conditions makes it even more challenging to deal with, however due to the nature of the market we often