Trading psychology

[Sanitough]

You can be a trader that has a good strategy and all but at the end of the day you might still end up incurring losses that are more significant than the profits you make from trading in the long run. Trading psychology is about 60 percent of trading, this tells you the importance of it. Trading psychology is a course on its own that a lot of traders need to master before they can start thinking about making profits. This is what puts you in control of your emotions and helps you maintain a healthy balance so you don't become indisciplined.

Losses are already part of trading, but its up to you how you will control and minimize your losses so that your significant income will still remain higher than your losses. Traders should not just focus on its fundamental and technical aspects, but also incur positive traits and attitudes that could pave way for a more successful and profitable trade.

Greed and fear are undeniably what most motivated traders, with trading psychology these two should stop existing but discipline, strict risk management, and emotional control should take charge of trading.

[Questat]

The thing is, not every trader who decides to trade in the market knows much about position entry and closure. They just trade because they feel positive vibes on it, and they think profits are coming their way, so they start trading without much knowledge on how to timing the market, and have no clues that patience, risk management, self-discipline and control are what makes trading highly successful.

Trading psychology should be learned prior to trading. Not really compulsory, but if you aim for a bigger success, one should see this as highly important.

[Finebone]

What is you take on this? Do you have good trading psychology? Permit me to use good so that you can understand my question easily. If you are only scalping or day trading and using stop loss, I always think such people trading psychology is poor. A professional trader will scalp, day and be a swing trader when he sees the opportunity, but using low amount of money that fit each category.

One important skill in trading is knowing when to be pragmatic depending on the opportunity in the market, because each trade have their own level of risk, so a good trader will always risk according. In the past when I was not that informed while trading, I use $30 with 5x leverage to take every trade opportunity I see, even though it's a very high risk trade, and it cost me a lot, but with more knowledge and experience, I started venturing into the market with a margin and less or more leverage according to the situation at hand, which have saved me a lot from troubles.

When you enter the market without a proper mindset, the chances of making a quality and informed decisions are very low, that is why for any trader to be successful, he first needs to master controlling his emotions, because it's only when your emotions is right, you can think and act right.

[The Cryptovator]

What is you take on this? Do you have good trading psychology? Permit me to use good so that you can understand my question easily. If you are only scalping or day trading and using stop loss, I always think such people trading psychology is poor. A professional trader will scalp, day and be a swing trader when he sees the opportunity, but using low amount of money that fit each category.

Each of us would have a different psychological pattern for the trading. If the same strategy is followed by everyone, then we are all here to make money. Don't forget when you are buying, someone is selling on the other end; the same is true when you are selling, and someone is buying. So for each of us, we have different psychological patterns for trading.

Usually I don't do day trading; most of the time I like to hold a little bit longer to get good profits. Otherwise, I do scalp trading sometimes; if it does go wrong, then I consider it my holding. My psychology is not to sell at a loss. Rather, I like to wait until the price recovers. That's how most of my holdings recover, except some shitcoins. The market gives me chances always to take out the profits, though sometimes I miss the train.

[Junii]

Actually trading psychology is the backbone of trading. Many people works on technical and fundamental and ignore psychology but it is the psychology that stays you in the market when everyone panics and stops u from buying when everyone is greedy. By improving trading psychology a person learns to control FOMO and greed also fear and revenge trading. Once these emotions are under control decision making becomes much more logical which naturally leads to better entries and exits. Also OP mentioned stop loss. I believe stop loss is not a sign of poor trading psychology. It is a risk management tool that protects your capital when the market moves against your analysis. Even the best traders are wrong sometimes so accepting a small planned loss is far better than holding a losing position and hoping the market will reverse.

[Jatiluhung]

A professional trader who focuses their time on trading will certainly always trade when a good opportunity arises. However, a professional trader always knows when to stop trading and when to re-enter the market. Clearly, trading psychology is really more about self control or managing one’s ego and emotions, when facing the market. And even professional traders sometimes struggle to control these aspects effectively. However, they do maintain a strict schedule and time management routine to prevent themselves from trading excessively and to keep their mental state healthy.

[Catenaccio]

A professional trader who focuses their time on trading will certainly always trade when a good opportunity arises. However, a professional trader always knows when to stop trading and when to re-enter the market. Clearly, trading psychology is really more about self control or managing one’s ego and emotions, when facing the market. And even professional traders sometimes struggle to control these aspects effectively. However, they do maintain a strict schedule and time management routine to prevent themselves from trading excessively and to keep their mental state healthy.

A professional trader does not force himself to trade anytime especially when the market is not good and safe enough, I agree with you, whereas it's not like mandatory that professional trader must always trade whenever there is a good opportunity. Because the market always has chances for traders, and a professional trader might miss a good opportunity while it's not a big regret at all.

It's because professional traders know that there will be other opportunities appear in the future. Missing one good opportunity, it's not big issue, other opportunities will come and professional traders will be able to join the market with one of many good chances.

[CryptopreneurBrainboss]

What is you take on this? Do you have good trading psychology? Permit me to use good so that you can understand my question easily. If you are only scalping or day trading and using stop loss, I always think such people trading psychology is poor. A professional trader will scalp, day and be a swing trader when he sees the opportunity, but using low amount of money that fit each category.

What's the goal in trading, the most important goal here is to make profit, therefore any trading strategy that you use in making profit and it works out for you should be a good trading strategy for you. There isn't no fancy way to do things, I must not necessarily be like the next trader that I have to time the market perfectly, put my stop loss in a certain price range and use a capital that is being portrayed as the best low risk capital to use. We should be able to decide what works best for us and then deploy that strategy on a repetition until you will make profit. There are few common rules and regulation that you should use as it helps you to avoid losses but there isn't any necessarily defined good trading psychology that everyone has to use in order for them to make a profit.

[Royal Cap]

Actually trading psychology is the backbone of trading. Many people works on technical and fundamental and ignore psychology but it is the psychology that stays you in the market when everyone panics and stops u from buying when everyone is greedy. By improving trading psychology a person learns to control FOMO and greed also fear and revenge trading. Once these emotions are under control decision making becomes much more logical which naturally leads to better entries and exits. Also OP mentioned stop loss. I believe stop loss is not a sign of poor trading psychology. It is a risk management tool that protects your capital when the market moves against your analysis. Even the best traders are wrong sometimes so accepting a small planned loss is far better than holding a losing position and hoping the market will reverse.

I would like to add one thing. Many people think that trading psychology is only needed when entering the market, but to me it is more important after a profit or loss. Because most of the wrong decisions come then.  Some people become overconfident after two consecutive wins, while others try to get all their money back in a hurry after a few losses. This is why good psychology means not only controlling emotions but also being honest with your plan. No matter how good your analysis is, if you break your own rules every time because of emotions , it is difficult to achieve consistent results in the long run.

[taufik123]

A professional trader does not force himself to trade anytime especially when the market is not good and safe enough, I agree with you, whereas it's not like mandatory that professional trader must always trade whenever there is a good opportunity. Because the market always has chances for traders, and a professional trader might miss a good opportunity while it's not a big regret at all.
-snip-

If you want to get into trading it is necessary to do an analysis first, if the market is indeed not doing well it is better not to do it because of more declines and negative sentiment,
but if you trade futures and take advantage of every decline for profit, then it will generate a lot of profits, Safe or not? Of course, more risks will occur.

And indeed it is not uncommon for a professional to trade even though the market conditions are good, this depends on the availability of their time to trade or do analysis,
if they do not have time to do it then do not trade even though the market conditions are good.

[Gozie51]

However, I think SL is protective. When you enter a wrong and unprofitable market, it helps you to retain part of your capital.

So you are using stop loss and that is making you not to be losing in trading? Please be real and not just post about what other people are saying. If banks are trading, I do not think they will use stop loss.

What I have said about SL is exactly the role it plays in trading and whether it is working for every other person is relative. If you are using a high leverage then you can be sure that using sl is what you must need. But traders who say they don't use SL depend on very low leverage. However, using low leverage is not a guarantee that you won't lose the trade even when you don't apply it. The market is volatile and to enter a wrong direction trade, you will be surprise that the market can drag your capital down to margin call.

But every trader knows what works for them while hodling is still more guaranteed.

[Gozie51]

Trading is not only riskier than long-term holding but also very time-consuming, especially when one is engaged in day-trading. 

Though you said it that trading is time consuming but if a trader is profiting, he will not reason that way because of the money in it. Every job is time consuming but what keep people engage in it is the salary or payment that they get from it at the end of the week or month. So likewise when you are not making profit in trading, it becomes time consuming.

  Even if one use trading bot, it is still mentally consuming because the time, focus, and thinking of a trader will always be on the item he is trading.  Traders cannot deny that unless the order is fulfilled, their attention is always on the trading platform.

Bots are not totally independent because you also need to set it up and expect it prompts. That is also time consuming like you have rightly pointed out.

[ndutndut]

Yes. Trading psychology isn't just about controlling emotions, but also about the decisions we make in the market encompassing everything. Because having a good trading psychology is more crucial to determining profit or loss than the strategy itself. Many traders have great strategies, but if they lack sound psychology, it can ruin everything in trading. The key to trading is discipline which will create a perfect strategy. Having risk management will help you control your emotions and having strict trading rules will minimize your losses.

Without mastering psychology traders will almost certainly experience repeated losses. Strategy can be learned quickly, especially with the abundance of good trading resources available today, but self control in trading requires time and consistent awareness. In conclusion strategy brings you to the market to trade but psychology determines whether you last long.

[Jegileman]

What is you take on this? Do you have good trading psychology? Permit me to use good so that you can understand my question easily. If you are only scalping or day trading and using stop loss, I always think such people trading psychology is poor. A professional trader will scalp, day and be a swing trader when he sees the opportunity, but using low amount of money that fit each category.

As much as one may think the other way round, stop loss has really helped a lot of traders not to liquidate their account but to try again. Through stop loss placement, when a market hits stop loss, it gives you the opportunity to go through the market and learn from the mistakes you’ve made from the market in your next trade. Always remember that stop loss is not meant for only swing traders, but it is also usable for day traders and it has also helped them in many ways to still stay intact in the market without losing their trading capital.  This is not about poor psychology, just make sure that you’re doing the right thing and applying the proper risk management required of you in the market.

[Oshosondy]

As much as one may think the other way round, stop loss has really helped a lot of traders not to liquidate their account but to try again.

This is very possible, but if 85% of traders are losing, are you saying that all of them that are losing are not using stop loss? Also are you saying that those that are trying to be safe and trade with low leverage and low amount of money can not make money from trading? Many people will not understand this until they see themselves as one of the 85% of people that are losing. Such people can later be emotional and even get greedy and get their account liquidated after they have used stop loss several time.

[Stepstowealth]

Do you have good trading psychology?

One thing with trading psychology is that it has to be self developed, it can hardly be taught I think. Every trader will only master psychology when they start paying attention to it because it's only when you pay attention to it that you'll be conscious of your emotions and your state of mind when you're about to place a trade that it does not affect your decision making. Mentorship will not bring full knowledge on trading psychology, you can only be introduced to it on what is expected but the rest of the job is something you have to do on your own.

[DanWalker]

It even let traders know how useless stop loss can be.

What is you take on this? Do you have good trading psychology? Permit me to use good so that you can understand my question easily. If you are only scalping or day trading and using stop loss, I always think such people trading psychology is poor. A professional trader will scalp, day and be a swing trader when he sees the opportunity, but using low amount of money that fit each category.

But can we call stop-loss useless?

I have been emotional and stubborn in the past when I traded without stoploss, and I have made my account zero a few times. Good trading psychology does not mean that you will never use stoploss. I would rather advise you to use it wisely. This will at least save you from losing your entire account due to one bad trade.

Actually, the problem is when we surrender ourselves to unnecessary risk management and emotion. I myself used to be a pure day trader. I used to run to catch every move and that completely destroyed my psychology. Now I mix calculated leverage with spot holdings and trade short term. And I hodl a part for long term.

The flexibility you mentioned is the real key. Low leverage and proper position sizing have saved me from big losses many times. I would like to tell beginners that 70% of trading is psychology. If it is not right, even the best strategy in the world will fail.

[Lannakosa]

This is very possible, but if 85% of traders are losing, are you saying that all of them that are losing are not using stop loss? Also are you saying that those that are trying to be safe and trade with low leverage and low amount of money can not make money from trading? Many people will not understand this until they see themselves as one of the 85% of people that are losing. Such people can later be emotional and even get greedy and get their account liquidated after they have used stop loss several time.

Traders who are trading at a loss may believe they're learning now and will eventually make money trading when they gain enough experience. But those who lose more than they make tend to repeat mistakes and are prone to taking excessive risks. This is precisely what prevents them from making changes in their trading, and they don't want to quit because they have losses they want to recoup. It's like a vicious cycle that leads to further losses.

[Karl_3000]

Traders who are trading at a loss may believe they're learning now and will eventually make money trading when they gain enough experience. But those who lose more than they make tend to repeat mistakes and are prone to taking excessive risks. This is precisely what prevents them from making changes in their trading, and they don't want to quit because they have losses they want to recoup. It's like a vicious cycle that leads to further losses.

It is like you have just posted what is in my mind, this is how many people are losing the bull run, they will use all their money for trading, thinking they will make money that they will use to hodl from trading, but trading will take money, time and energy from them. I have lost money in trading before which make me know how risky trading is and I prefer to just hodl my precious money in bitcoin.

[Jatiluhung]

A professional trader who focuses their time on trading will certainly always trade when a good opportunity arises. However, a professional trader always knows when to stop trading and when to re-enter the market. Clearly, trading psychology is really more about self control or managing one’s ego and emotions, when facing the market. And even professional traders sometimes struggle to control these aspects effectively. However, they do maintain a strict schedule and time management routine to prevent themselves from trading excessively and to keep their mental state healthy.

A professional trader does not force himself to trade anytime especially when the market is not good and safe enough, I agree with you, whereas it's not like mandatory that professional trader must always trade whenever there is a good opportunity. Because the market always has chances for traders, and a professional trader might miss a good opportunity while it's not a big regret at all.

It's because professional traders know that there will be other opportunities appear in the future. Missing one good opportunity, it's not big issue, other opportunities will come and professional traders will be able to join the market with one of many good chances.

Of course, this doesn’t mean a trader has to constantly enter the market and open positions whenever an opportunity arises that seems promising. We know that professionals have their own trading schedules. They don’t trade at random times. They’re highly organized, and everything is always recorded in a trading journal that they meticulously maintain for later evaluation and analysis.

Professional traders are often hired by large companies or institutions that entrust their substantial capital to a select few professional traders they trust. So they’re truly different from small traders like us, whose level of discipline is sometimes inconsistent. Behind those institutional traders, we can find many actual professional traders. They truly understand how to read the situation, and sometimes they even work with their teams to create specific scenarios to trigger market sentimen, which is, in fact, an open secret.