Trading psychology

[Hatchy]

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.

I don't have issues with every other part of your post except where you make stop loss look really bad. Stop loss is used by professional traders because it helps you define your risk and takes you out of the market when you are too scared to close out on a losing trade. You can imagine trading a very big position and in draw down that's twice your normal risk simply because you failed to use a stop loss and accept you failure. Be it scalper, swing trader or whatever, using a stop loss is an ideal way to help keep not just your capital but your psychology. No one stops anyone from trading all three styles you method, but over time, I've come to notice that when you define what you want to see in the market and stick to it, you are better off on a long term instead of using different trading styles which distracts you.

[Oshosondy]

I don't have issues with every other part of your post except where you make stop loss look really bad. Stop loss is used by professional traders because it helps you define your risk and takes you out of the market when you are too scared to close out on a losing trade.

If they are truly a professional, why are they not looking for way not to use stop loss. A person that called himself a professional trader that is looking for ways to turn $10000 to $5000 in just one year, is that professional? That is where the greed will start with them thinking of using high amount of money to trade at once and also use high leverage, making them to think that stop loss is good until they get their accounts liquidated at last.

[M47AK16]

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.

Depends on the type of trader. If we are talking about someone who spent 6 months without trading a single time and only spent time on learning about technical analysis, chart reading and indicators, and then spent another 6 months on demo accounts to make sure they learned what they learned and not missing anything, and after that one year, they start small with real trading, those type of people may make mistakes but they will take a look back at their mistake and see what went wrong. Newbies who just YOLO their trades will make mistakes and won't even know what went wrong.

[freedomgo]

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.

I guess no trader can perfectly integrate good psychology into trading because human in nature will always have its negative traits and attitudes that can easily ruin their trades. The thing is, they can study how psychology works in trading, but they can never execute all-out performance into it, that's why there are traders that end up like gamblers in the long run.

And even professionals are never an exception. Yes, they have an edge when trading but we can't really tell that they have completely acquired trading psychology.