Trading is said to be 80% mindset and 20% strategies.
How true this is.
You can know the strategies however if your psychology is not right you will lose or if you manage to profit you will soon donate it to your educational fund (the market).
In applying the correct psychology to your trading you can begin to master the 80% mindset.
I say this as applying the correct psychology to my trading halted my self-sabotage and donations.
Obviously I still have losing trades as the market does what it wants when it wants. I simply reduce the impact of those losses. How to reduce your losses will be revealed in a later lesson.
It is never an easy thing to correct. Plenty of guru`s will sell you a trading system.
Ask them about mindset or psychology and they will tell you trading is 80% mindset.
Well thanks very much, we are getting the message. However no one tells you where to find the information to correct trading psychology. Mainly as it has zero to do with trading. It is all about your state.
Welcome to the methods which work for my trading.
After refilling the trading account on several occasions and generating handy amounts in trading, then donating them back to the market, I made up my mind to investigate and research the 80% mindset.
What chance does a Koala Bear have when psychology is 80% (WOW) and strategies are only 20%. And the majority of us concentrate on the strategies
Any wonder most traders soon give up on trading after continually refinancing their account or going bust.
You figure best to learn 80% first.
However, as is the case with most things, the psychology is presumed correct.
We find things are not that rosy after commencing trading when our trading accounts go from say a healthy $20k down to a desperate $5k or lower.
You see the problem with other people`s trading system`s is they have been built to suit their personalities or at the very least altered to fit their psychology. So when you start trading any system you bring your personality into it which will not work without alterations to the system.
So let`s see what we can do to correct the psychological aspect of our trading before we attempt the 20% strategies.
In the next installment
The NUMBER ONE thing your need to know and apply to improve your trading.
Copyright © 2012
Happy Trading
So very true – Trading the stock market is 80% mindset and only 20% strategies. Its also true that what works for one person will not necessary work for another person!
It is also a good idea to only do trading part-time to start with and keep your normal job so that money is still coming in (taking off the pressure to make money with each trade!)
Great tips you have on the psychology of trading.
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Agree that trading is 80% mindset and 20% strategies. Having good knowledge is not enough when it comes to trading. As a result, some strategies are just not suitable for some traders.
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I think this goes for most things, to succeed you definitely need the right mindset.
I have always wanted to have a go at trading, maybe one day.
Very true that we need to set boundaries around trading so you can actually make a profit. That is the aim after all.
Stay well, Eileen.
I totally agree with you that to make a good trader your mind has to be right. We also have donated quite a bit of money to the markets and it really gets to you. This is when you start making silly decisions which are detrimental to your outcomes. My husband is wanting to be a full time trader but he is very cautious about getting back into the market. He has the strategy he wants to follow worked out, he just has to get his mind in the right place.
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